The Hindu Business Line : 7 pc growth in Indian air cargo seen

The fate of the cargo is still closely linked to passenger traffic since almost 60 to 70 per cent of air cargo is currently carried in the belly of the passenger aircraft.

Chennai , Jan. 27

THE air cargo market in India is predicted to grow at an accelerated pace of 7 per cent, while the global air freight market forecasts growth at a rate of 5.3 per cent from 2002 to 2006, Ms Joan Manohar, Deputy Commercial Director- Training, Air India, said.

Ms Manohar said that after the 9/11 crisis, air cargo gained in profile and the International Air Transport Association (IATA) has projected a growth of 5 per cent while passenger recovery to 2000 levels was not expected before 2005.

The value of freight to the overall revenue of the airlines has been going up, she said. For US airlines, freight accounts for 15 per cent of their overall revenue, while the proportions are much higher for European airlines (19 per cent) and Asian airlines (25 per cent).

Ms Manohar said that the fate of the cargo is still closely linked to passenger traffic since almost 60 to 70 per cent of air cargo is currently carried in the belly of the passenger aircraft. The airlines have to balance the different requirements of the passenger and cargo. She said that within the next decade distribution between belly and freight capacity will alter dramatically. Freighters are projected to account for 60 per cent of the air cargo and major cargo airlines will be ramping up their freighter capacity.

One of the important issues at hand was to liberalise the freighters and free them of traffic right restrictions, she said. Considering the growth of cargo within the bilateral regime, there has been increasing need for special treatment for freighters. A plus point for liberalising is that freight is not hemmed in by nationality clauses, which are central to the passenger regulation. Air cargo is also amenable to the use of secondary airports and multi-modal transport, she said

Another issue is that freighters are seen as essential to meet the demand from forwarders for guaranteed capacity. There has also been a recent willingness by forwarders to share asset risk with the airline, she said.

On the flip side, Ms Manohar said, was the concentration of capacity in the hands of few forwarders — on a global level, the top 17 account for 45 per cent of air freight revenue while 10 cargo hubs account for 65 per cent of the market.