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Why are Kerala exporters in disharmony over the changes to the Open Sky Policy?

IATA
Reading Time: 4 minutes

In a recent move made by the DGCA, the aviation regulator announced that foreign carriers can operate their non-scheduled cargo flights to and from six Indian cities — Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Hyderabad — only. While the move has triggered a mixed response from the industry, we bring to light how exporters and freight forwarders in Kerala are in discord over the lack of suitable alternatives for the transport of perishables, with weekly export of goods like vegetable and marine products spiralling down to around 250 tonne from 1000 tonne, and why they want the government to hear their plea.

Despite having four international airports within a vicinity of 580 kms with Cochin being the fifth revenue making airport in the country, Kerala was not included in the list of the 6 airports that have been approved by the DGCA for the operations of non-scheduled foreign cargo flights.

While responding to a plea made by ACAAI (Air Cargo Agents Association of India), the Centre said that the decision was taken to protect the interest of the national carriers. However, K Suresh Kumar, Chairman of ACAAI(Kerala) lays out the consequences that the policy has had on the state, especially in the export of perishables and why it should be considered as a special case.

Due to unavailability of direct flights from Kerala to Europe, there has been a major impact on the perishables and the present alternatives are only leading to insurmountable logistics costs, as Mr Kumar shares.

We are dealing with perishables, marine products etc that have a particular shelf life: they have to reach the destination at the earliest. We have been using the capacities of Emirates and Qatar Airways- they have a very good network, good connectivity via Dubai or via Doha, so in 14 hours our product will reach Europe’s market. But this is not possible at the moment, since the recent amendment directs that we take our cargo either to Bangalore or to Chennai. So, if we transport to Chennai via trucks, it will itself take 14 hours. So consequently, our logistics costs will go up, our clients won’t be able to deliver the products on time, so for perishables, this move will not work.”

Nosedive in Demand and Foreign Exchange

Mr Kumar further sheds light on the impact of the change in policy on the livelihoods of the people and the economy.

“We are struggling now; our demand was 1000 tonnes in a week, from both Cochin and Trivandrum, whereas now, we are only able to export only 250 tonnes. So, loss of 750 tonnes in a week means a loss of almost 3000 tonnes in a month that the government is losing on forex. The people over here are losing their employment. So they don’t realise the cascading effect of this notification, something they are still holding on to. If the government gives us an alternative, say, by putting AirIndia into service, then we will wholeheartedly support this move. But right now, they are protecting something which is not there. We want our carriers to survive.”

The government is aiming to protect the national carriers, which we support. But in Kerala, none of our carriers be it Air India, IndiGo or JetAirways are operating direct flights to Europe, or places like Montreal, Toronto, etc. So the government is trying to protect something which is not there. We want our carriers to survive.”

Are domestic carriers equipped when it comes to cargo capacities?

While talking about the difference in passenger levels to cargo levels, Mr Kumar says, “At the passenger level, we understand but at the cargo level, do we have a carrier with the capacity of AirIndia or Qatar Airways? This move will not only lead to losses in our businesses but also losses for the country as a whole”, he reiterates.

Can Scheduled Flights alleviate the problem of transporting perishables?

While underlining the reason why having scheduled flights in operation will not be feasible for perishables, Mr Kumar highlights the impact of the move and how having scheduled flights in operations does not alleviate the problem at all.

“Scheduled flight means that for the next 6 months, carriers like Emirates have to apply for the operations, let’s say, as an example,they will operate 100 tons for every week on Wednesday or say, Friday. But since our products are perishables, it is not possible to ascertain the quantity beforehand, since fishes depend upon the catch, climatic conditions, etc as it is not a factory product. Thus, scheduled flights are not viable. If Emirates does not get a 100 tonnes, they will not operate.  Say, we manage only 50 tonnes of cargo and the flight doesn’t come. Then what will we do with our cargo?”

He adds,“I cannot tell you in advance that we will get fish next month. Such an all India policy will not work because you are dealing with something that needs special attention.”

Ramifications on business, livelihoods and the issue of defaulting

The ACAAI chairman, while talking about the impact of the move on the business, brings to light the consequences that will prevail in the longer run. “All our marine products going to restaurants in Europe, where they take orders and supply to their clients. So if we don’t supply, they will go to other sources in Indonesia or Africa, Colombo. If this happens, our customers won’t get the clients back. It’s a credit business, and crores of money is involved. When they lose money, I will also lose money because the shippers don’t pay me. So I will become a defaulter, since I will not be able to pay to the airlines. So it is a serious problem. Our buyers are already moving to Colombo and other places, which only means that our shippers will lose”, Mr Kumar stresses.

Knocking on the right doors

When asked if the authorities have taken cognisance of the same, Mr Kumar responds, “We have taken up the matter with our MP, Mr Shashi Tharoor and have even written to the PM and are still knocking on other doors. We appreciate the Grievance redressal portal that has been put in place (CP GRAMS) but it is not yielding much since the complaints are sent back to the DGCA for approval. We are pro-government but this issue is of grave importance that needs serious attention since everybody will suffer if the cargo doesn’t move.

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