The Hindu Business Line : ‘There is need for a dedicated freighter’

We will be a regional cargo freighter. Our operations will be limited to a seven-hour radius from India. We will partner with airlines for long-haul markets.

NATESAN RAMESH, CEO, QUIKJET CARGO

Shubhra Tandon

Despite a boom in airline passenger traffic in India, the air cargo industry continues to get step-motherly treatment. Lack of infrastructure, absence of dedicated cargo facilities at the airports and negligible presence of dedicated freighters in the domestic market are just some of the impediments to its growth. In a country where any amount of capacity addition would be welcome, a Bangalore-based cargo airline QuikJet Cargo will commence operations soon. The airline’s CEO, Mr Natesan Ramesh spoke to Business Line about the freighter’s plans.

Excerpts from the interview:

What is QuikJet? Who are the people behind it?

QuikJet Cargo is primarily a full freighter airline working as an air integrator for the express and courier companies. It will serve the requirements of the Indian express industry as it will operate overnight services starting from around the first week of May. We are not going to be an end-to-end service provider, as we feel there is a more dire need for a dedicated freighter in this market, and a player who comes without any affiliations. We will also carry general cargo but not in a big way initially. However, there are plans for specialised cargo transportation, etc., at a later stage.

Mumbai-based Air Freight Limited (AFL) and Singapore-based aviation company Cardinal Aviation are the promoters of the company.

What are the opportunities you see in the Indian air cargo space?

The Indian market today is served by only one company in the overnight express space. That company is actually part of an integrator — courier express integrator. The bulk of the space that it has now is for own group consumption. This, in turn, has handicapped the serious competition in the overnight delivery express business in India and we would like to bridge that gap.

What are the routes you are looking to fly? How many flights are you planning initially?

As a starting point we are looking at the major metros, where the big cargo volume is. However, we are not restricted to the metros because the infrastructure for aviation is choking and if one looks at the evolution of manufactured goods and services, they are now moving to Tier 2 and Tier 3 cities. We will start off with two flights. As per the plan, one plane will leave Bangalore for Chennai, go to Mumbai, then to Delhi and come back to Bangalore. The second plane will leave Bangalore go to Delhi, then Mumbai and on to Chennai before returning. Our first two planes are Boeing 737-300s.

What are your expansion plans and what type of aircraft do you intend to use?

As we get our third and fourth aircraft, we will increase frequency. The third plane, also a B-737, will come in August-September, three months after commencing operations. Early part of next year, the fourth and fifth planes will come in, subject to aircraft availability and the type we would want to induct. We will probably look into increasing our capacity size, which could mean a B-757 or B-767. Our plan is to have 12 planes in about four years.

Are you looking to fly international as well?

We would eventually look at that but never intend to go global. We will only be a domestic and regional cargo freighter. Our operations will be limited to countries within a seven-hour radius from India. Beyond that, we will partner with airlines for long-haul markets. They can fly to one or two cities and have us move the goods around India.

As air-cargo operations are capital-intensive, how much would you be investing and what is your source of funding?

QuikJet is a private limited company, so I cannot disclose figures. I can only say that we are way above the threshold capital of around $10 million that the Director General of Civil Aviation specifies for a passenger airline. We have three large institutional shareholders — IDFC, IL&FS private equity and Tata Capital. There is a very keen interest from them as they also move a lot of goods around. So, in their minds, capital is not a constraint and, hence, it is the same for us.

What are the current practices in the air cargo space? How different will QuikJet be from them?

As I said, there is only one primary integrator in the country. The rest of the cargo is carried through the belly space of passenger airlines. First, in belly space mode you are going by the passenger aircraft schedule. You fly when you fly the passengers. Also, there is no space for containerised cargo. It can be put in as loose cargo or as pallets. They are restricted by capacity as well.

Now a company like Fedex would not be willing to segregate two tonnes here and two there when sending something like 10 tonnes of cargo. Right now, they are compelled to do that.

While with QuikJet, they will have the ability to load all of it into our planes. We can give them B-737 containers, tell them to pack and bring them to the aircraft. We load them and unload them at the said destination. We give those containers at the arrival point, you go and unload them in your own warehouse. How much more integrity can you get in terms of security of your package? This is absent in passenger airlines. In fact, that value is what they are charging from their customers.