Last year, around this time, the Minister of Civil Aviation – Jyotiraditya Scindia – while speaking at an ACFI Conference made a power-packed speech to the audience, stressing on the limitless potential of India’s air cargo sector.
He enumerated a tripod strategy to achieve the 2030 goal of reaching 10 million MT cargo movement:
- The need to develop a hub and spoke model to achieve aggregation, transporting cargo from Tier-2 & Tier-3 cities to Tier-1 cities, not just from Tier-1 to international locations.
- Feeder services and wide-bodied aircraft to transition India as a transhipment hub
- Improving infrastructure, including the ease of doing business, paperless/faceless processing of cargo and inducing digitisation.
A notable statement he made was that the Indian air cargo has turned from an underdog to a superdog.
Coming back to the present day, the sector has come far away and much on the positive side. The growth has been steady – but in light of the dipping demand and better prices that other modes of transport offer – a little slow.
The Ministry of Civil Aviation (MoCA) is not only working towards creating a better infrastructural framework but is also simultaneously working on addressing the challenges that may act as obstacles to the 10 million MT journey.
‘When you have a government that’s engaged, it’s positive. When you have a government with a plan, even better. When you have a government that goes into writing with that plan, it creates the right (growth) environment,” said Glyn Hughes (Director General, TIACA) as he spoke recently to Logistics Insider.
It is surprising that with the current manufacturing capacity, India’s exports are only 10% and 20% of the US and China, respectively, which are the world’s biggest economies. And for this output, the air cargo capacity and infra currently available is appropriate.
We have 7 years until 2030 (our target year). If we take an average date of 15th June 2030, we have only 7 years, 2 months and 4 days. While this duration may not seem too short, however, when you factor in the increase in the volume of freight that is handled by air cargo each year, it may not be enough. We need to be able to stand the test of expansion and growth – the ultimate challenge.
“You may have very efficient systems. But they also need to be scalable,” said Hughes.
He points out a few things that need to be taken care of.
It starts with capacity. India is developing its narrow-body freighter network. An increasing number of airlines have now added narrow-body freighters to their fleets, apart from those running freighter-only operations. These freighters are great for augmenting domestic connectivity (with a network of Tier-2 and Tier-3 airports) and also transporting goods to neighbouring countries. Another added advantage is that they are easily deployed and have a quicker turn-around time.
Another notable development is the upgradation of road infrastructure. Since the majority of India’s freight movement takes place via road, the transportation costs are considerably lower than other modes of transportation, which means it can support air cargo in the domestic movement of freight.
Domestic connectivity – CHECK..!
The Indian carriers, as mentioned above, are increasingly investing in freighters. However, wide-body freighters are still a major missing from the industry. According to a study by the Transport and Trade Group, about 90% of India’s international air cargo exports are transported by non-Indian carriers.
“While there is Make in India, Fed by India and Saved by India on one hand, but on the other hand, all of it is flown by someone else,” Hughes remarked.
He correctly highlights that though it is a good sign that foreign carriers wish to operate in India and support Indian exports, however, when it comes to catering the more than quadrupled volume of cargo, a robust domestic air cargo fleet that includes wide-body freighters, will be necessary. Because ultimately, for international carriers operating here, India is just one of the markets they cater to. Such an air cargo fleet, along with the infra development, is a prerequisite for India becoming a USD 5 trillion economy.
This gives me mixed feelings. Why? I can’t seem to stop thinking of how Air India’s massive order for aeroplanes does not include a single freighter. They created a record by ordering the largest number of aeroplanes at a single time from both Airbus and Boeing – including narrow as well as wide-body passenger aircrafts.
Another point is that with passenger aircrafts comes belly capacity, which ultimately proves complementary to the freighters operating in the Indian market. However, as Glyn also points out, belly capacity for cargo has to move to the passengers’ destination(s). In that sense, there are limitations, to some extent, to freight movement – after all, India produces for the world and the cargo may not be going where belly capacity is destined to.
Therefore, there is a strong need to develop domestic fleets that consist of narrow as well as wide-body aeroplanes for both passenger and freight.
Connecting India to the world – CHECK..!
In conclusion, India’s air cargo sector has come a long way since the government’s tripod strategy was introduced in 2022. While the growth has been steady, there are still challenges to be addressed to achieve the 2030 target of 10 million MT cargo movement. The development of a robust air cargo fleet that includes both narrow and wide-body aeroplanes for both passenger and freight is crucial. The need for such a fleet is not only to cater to the increasing demand but also to make India a transhipment hub and boost its economy. With the government’s engagement, a plan in place, and the right infrastructure, India’s air cargo sector has the potential to become a global leader in the coming years.
Check out the full interview below: