As the covid pandemic unfolded, businesses across the world suddenly went into limbo. Just like aviation industries across the world, India’s aviation sector too witnessed a sharp fall in traffic and business, leading airlines to divert its attention to air cargo as a beacon of hope to redeem and recover the lost ground. We look at how air cargo has played and continues to play a critical role in enabling the sector to get back on its feet.
For aviation sector, 2020 will be penned in the history pages as the worst year of the century. Battered businesses, fall in airport traffic— the situation was nothing less than an unprecedented blow. The pandemic forced the government to impose strict curbs on air travel, leading to a massive decline in air traffic.
However, a sector that helped redeem the sector its glory and business was the air cargo sector.
Domestic airlines that faced the imminent fate of incurring heavy losses switched to the air cargo sector.
Even today, air cargo sector remains a promising segment which can be given a major impetus if India also builds up cargo transit hubs.
The Indira Gandhi International Airport (IGIA) in New Delhi, which handled 955,000 metric tonnes of freight in fiscal year 2020, surfaced as the country’s leading cargo handling airport; however, the share of domestic airfreight dropped by some 7 percent in 2020 on a year-to-year basis.
Other airports are also now setting their eyes on cargo, to revive business and overturn the passenger traffic downturn.
Ground Handling Services: Set for a boost
With the government on the road to modernising airport operations, the demand for sophisticated ground support equipment (GSE) is also expected to grow, in addition to added efficiency and time saving and cost reduction.
The country’s apex airport managing agency, the Airports Authority of India (AAI), which owns 125 of the nation’s 460 airports, is en route to making significant strides in ground handling and ensuring long-term functioning for at least a decade.
Budget airlines such as Indigo and SpiceJet take care of their own ground handling at a number of Indian airports, using their employees for this purpose.
Additionally, to curb costs, forced by the second, more devastating COVID-19 wave, private airlines are downsizing or even completely outsourcing ground handling work at airports to companies that provide specialized ground handling services.
Building India’s Transit Hubs
The government’s National Air Cargo Policy has set the bar for many Indian freight forwarders, particularly because the policy purports to make India one of the top five air freight markets by 2025 and create air-transport shipment hubs at all major airports.
The policy also aims to leverage India’s geographical location as a transit hub between Europe and Southeast Asia and a gateway to the South Asian region. The policy could encourage code-sharing/interline agreements between foreign and Indian carriers.
India needs transshipment cargo hubs not only because of the country’s potential to grow as one of the world’s largest economies and the huge size of its consumer market but also because the country, after overcoming the current pandemic-precipitated economic downturn, will also play an increasingly important role as one of the Indo-Pacific region’s major economic growth engines, helping to drive Asia’s regional trade and investment flows.
But to achieve this, India needs to undertake investment, and aggressively promote exports to sustain rapid economic growth over the next five years.
After Delhi Airport, the upcoming Noida International Airport Limited (NIAL) in nearby Jewar is primed to be a major air cargo hub for India. It is also expected to be a transshipment hub for the country once it starts operations in 2022-23, though some experts believe it could be delayed due to several reasons, including the pandemic.
GMR Hyderabad International Airport Limited (GHIAL) is also working to transform itself to a major cargo hub given the concentration of pharmaceutical companies in its surrounding region.
It has been adding new infrastructure, transshipment facilities, integrated express terminal, dedicated perishable facilities, pack houses and dense network of international and domestic – air and road – multimodal connectivity.
With India expected to post robust growth in aviation, experts opine that the country has a critical role to play in both passenger and air cargo traffic, provided the pandemic is brought under control soon.