From the Magazine – Why are Indian Freighters Still Missing?

As one of the fastest-growing economies in the world, with a rapidly expanding market for goods and services, India is experiencing a significant increase in the demand for transportation of goods and commodities. And air freight is becoming an increasingly popular mode of transportation. However, despite the growing demand, India has been struggling with the dearth of a domestic freighter fleet. In this special feature, we try to find out why.

Freighter aircrafts are specifically designed for the transportation of goods and commodities, and are equipped with specialized cargo compartments and loading equipment, allowing for the efficient and safe transport of goods. And the demand for air freight in India has grown exponentially in the last few years. In the long term, is expected to follow an ascending trajectory. However, freighters are still not the popular choice in comparison to belly capacity.

Even though the civil aviation industry is exhibiting rapid growth trends, air cargo still receives a lesser focus, translating into a lack of investment in freighters. On the other hand, Air India’s huge passenger airplane order proves that passenger transportation is still bullish amid the sector. All this while, it’s been reiterated time and again that freighters are ideal for transporting highvalue items due to highly controlled transit, direct routing, dependability, and special capacity considerations – volume, weight, hazardous nature and dimensions.

Conventionally, the government has been slow to invest in the development of air cargo infrastructure, and private investors have been hesitant to enter the market due to regulatory barriers and other challenges. Another challenge facing the air cargo industry in India is the lack of a strong and wide network of air cargo terminals, especially at smaller regional airports.

Reminiscing of the past, Balasubramanian P. (Founder and CEO, Air Cargo Consultancy International Services) shares the evolution of freighters in India. “Back in 1977 in a relatively small station Madras (now Chennai), Air India used to operate DC8-73 freighters with capacity of 18 pallet positions plus bulk space multiple times a week. Those freighters used to come in from the West, US and Europe into Bombay (now Mumbai) onto Madras bringing on equipment, machinery, components and so on. Those freighters used to get back to Europe/US through the same route carrying finished leather, garments, handicrafts and so on. In addition, chartered freighter capacity was common – Cargolux B747 freighter, other carriers and operators bringing in B707, CL44, IL76 and the list is long. Somewhere, India lost the thread for multiple reasons, more excuses than reasons.”

Subramanian says that despite economic reforms in the early 90s, the golden opportunity to recapture the lost territory was not attempted for “reasons best known to those who could/should have done it and yet chose not to do so.” It was back then that foreign operators leveraged India’s slumber on its air freight segment and brought in freighter capacity.

In the present times, however, the importance of freighters has been realised, even though it is still at a somewhat nascent stage. But aspirations are flying high and bigger than ever bets being placed on the sector. Taking the annual cargo handled volume to 10 million MT by 2030 is not an easy task, and can certainly not be achieved while depending on only foreign air cargo fleet and belly capacity available.

In that context, Glyn Hughes (Director General, TIACA) says, “The vast majority of Indian air cargo exports, approximately 2.4 million MT, is transported by international carriers, and predominantly utilizing belly cargo capacity. The widebody freighter capacity is mostly provided by nonIndian registered carriers. The government has an ambitious economic growth strategy which includes growing air cargo exports to 10 million tonnes annually. In order to achieve this the freighter fleet will need to expand significantly.”

However, there’s a positive sentiment around the usage of freighters in the Indian air cargo market on the back of the need for specialized freighter planes to meet increasing demand. When asked about the significantly lower number of freighters in India’s domestic fleet, Frederick Horst (Managing Director, Trade and Transport Group) said, “Due to an abundance of high frequency belly capacity, freighter operations have traditionally struggled in the Indian domestic market. Around 80% of cargo traffic is carried on passenger aircraft. Blue Dart and Quikjet are different because they are inhouse networks for Blue Dart and Amazon, respectively.”

“Indian carriers operate exclusively narrow-body freighters. A lion’s share of the shipments in and out of India was taken by the foreign air operators, who command around 94-95 percent of the market, while the remaining 5-6 percent is cornered by the Indian air operators, and that too is carried out through mainstream airlines that have wide-body planes, which offer larger belly space,” adds Ketan Kulkarni (Chief Commercial Officer, Blue Dart).

India’s air cargo segment has a limited number of dedicated freighter airplanes, with most of the air cargo being carried in the belly of passenger planes. While there are a number of freighters being run by international carriers, the domestic fleet consists of only 15 narrow-body freighters, which include aircraft such as Airbus A320, Boeing 737, and ATR 72. There are no widebody freighters operated by Indian carriers. Considering that in other countries, freighters are commonly used for movement of cargo, it is surprising that we’ve not been able to cash in the domestic potential for air cargo transportation.

Richard Theknath (Chairman and Managing Director, Jet Freight Logistics) cites the possible reasons leading to this situation. “There are several reasons for this, including the lack of investment in cargo infrastructure, limited demand for air cargo services, and high operating costs associated with wide-body freighters. Additionally, Indian carriers have historically focused on passenger operations rather than air cargo, which has also contributed to the limited number of freighters in their fleets. To address this, there needs to be a concerted effort to invest in cargo infrastructure, increase demand for air cargo services, and incentivize carriers to invest in widebody freighters for air cargo transport.”

This is an abridged version of the article was published in the May 2023 issue of Logistics Insider magazine. To read the full article, click here.

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