Getting going
Air Cargo India, Mumbai – a report. India looks set to meet, and maybe surpass, a government target to handle 10 million t of air cargo by 2030. ITJ correspondent Michael Mackey reports from Mumbai.
Ramesh Mamidala, head of cargo of the national carrier Air India (AI), outlined five principal reasons in favour of India tripling its 3.5 million t of airfreight in six years. They are strong domestic volumes, e-commerce and its cross-border component, the rise of India as a manufacturing power, new capacities and transhipment volumes.
He might have added a sixth reason – government policy and support, as the conference was peppered with references to how the abrasively reformist government of Narendra Modi is overturning decades of India’s statism to let business move.
One striking example of this changed mindset isn’t just the tonnage goals, but also the rivals that are being targeted. “Transhipment activities have really taken off,” Mamidala said, noting that if policy changes happen they’ll make transhipment processes more efficient and India more competitive. “It might enable us to compete with the likes of Dubai, Singapore, Hong Kong or Doha.”
Hubs for growing fleets
Among the places being framed for hub roles are Mumbai, India’s premier business centre, and Bangalore, the country’s high-tech and pharmaceuticals base. New Delhi is still considered the mother hub though, Mamidala added.
The other big change in Air India is its new fleet. Last year it ordered 270 Airbus and 220 Boeing aircraft, including 80 widebodies (see also page 12 of ITJ 11-12 / 2023). Shortly after that AI rival IndiGo placed Airbus’s biggest order ever, for around 500 aeroplanes in the A320 family.
So there’s going to be a lot of cargo capacity coming on stream in the coming years, with the narrowbodies not about to fly empty a lot either. There’s a role for them, especially to and from Southeast Asia, according to Nipun Anand, the founder and CEO of Pradhaan Air Express (PAE). PAE’s basic model is to move Samsung’s goods between India and Southeast Asia. Anand told ACI that “regulations concerning age limits, taxes and duties on leased aircraft have to be eased a lot. At the moment it’s a challenge to bring these freighters into India.”
Cross-border and domestic activities
The other key role for the new units is going to be moving goods domestically. In this era of e-commerce the already substantial segment is expected to generate around 30% of the target of 10 million t, according to Mamidala.
Significant growth in e-commerce volumes in the country will drive up domestic airfreight volumes. In the long term this might be bigger than the growth of cross-border e-commerce. Domestic e-commerce volumes are currently worth USD 450 million, but they could be five or six times more by 2030, and generate 500,000 t of cargo.
Behind all this is India’s emergence as a high-tech manufacturing centre, which by definition needs lots of air cargo capacities. Manoj Singh, Adani Airports’ chief cargo officer, suggested that Indian manufacturing exports may be worth USD 12.1 billion by 2030. Given the product mix, air cargo can benefit.
There’s some concern, however – as elsewhere – over the slow speed at which the industry is digitalising. It sometimes “goes beautifully” in pockets, according to Amar More, co-founder and CEO of Kale Logistics Solutions, but they don’t connect as well as they should. Four areas need more work, he said – efficiency, visibility, security and sustainability.