Indian carriers rue over foreign players’ dominance in int’l air cargo operations

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The Indian international air cargo operations are almost entirely dominated by foreign air operators with 94-95% of the market share, while only 5-6% share is enjoyed by the Indian operators and that too is largely carried by Air India and Vistara’s wide-body planes offering large belly capacity.

Identifying the gap, in recent times, SpiceJet has launched its dedicated cargo arm, SpiceXpress, in an attempt to narrow down its focus on the air cargo business. Although a step in the right direction, this is not enough for the Indian air cargo airlines to fly high and long.

In FY 23, the Indian air cargo traffic volume stood flat over the previous fiscal at 3.14 million MT, much below the 3.5 million tonnes recorded in FY19. Of the FY23 cargo volumes, 1.84 million MT was international cargo (both exports and imports) and the remaining 1.29 million tonnes was domestic. And, a lion’s share of these international shipments was carried out by foreign air operators.

Problems and Solutions

To be able to hold a substantial share in the Indian International air cargo operations, the Indian carriers require a larger fleet of wide-body dedicated freighters.

At present, India has a total dedicated freighter fleet of 14 aircraft (IndiGo CarGo: 2, SpiceXpress: 3, BlueDart: 6, QuikJet: 2, and Pradhaan Air: 1), and none of these are wide-body aeroplanes. While on the other hand, the foreign air operators together have a dedicated wide-body freighter fleet of 943 aeroplanes (FedEx: 400, UPS: 290, DHL: 215, Qatar: 27, and Emirates: 11) giving them an upper hand against the Indian carriers.

The Indian carrier’s lack of wide-body aircraft also stops them from taking long flights to destinations like the United States and Europe.   

Apart from this, the domestic carriers have complained of not being given a level playing field against the foreign carriers. They have alleged that an Indian air cargo operator has to pay a hefty customs duty for leased aircraft registered in India. On top of it, while the Indian cargo airlines are not allowed to operate aircraft that are over 20 years old, foreign airlines are permitted to fly aircraft over 20 years old into India.

The domestic players in addition to being heard on the above issues have also tied their hopes with the government to create a dedicated cargo airport to handle all kinds of cargo and introduce a unified customs policy across airports for faster clearance of shipments.

Also, they want the government to bring a transhipment policy to ease the transport process and make India an international hub for air cargo transport.

India is ambitiously aiming to touch 10 million MT in air cargo volumes by 2030, but to do so, Indian players have to step up and take action to expand their capacity, and the government needs to support the industry with new effective policies to get newer players in the Indian air cargo market.