Economy

Air cargo sees a steady rise, inches towards pre-Covid levels

Forum Gandhi Mumbai | Updated on August 05, 2021

Third wave may delay complete recovery

Air cargo has seen a steady rise on a year-on-year basis, inching towards pre-Covid level numbers. Between April and June 2021, Indian airlines carried over 738 metric tonnes of freight, a 141 per cent increase compared to the same period last year.

However, it is still 12 per cent lower than pre-Covid levels. Experts expect pre-Covid numbers to be achieved by Q3 of FY23.

According to Airports Authority of India (AAI) data, in June 2021, freight saw a 45 per cent increase compared to June 2020 when carriers carried close to 163.01 tonnes of cargo.

Indian carriers carried more than 487.72 tonne of freight in the first quarter of FY22 compared to 223 tonnes of freight at the same time last year. Meanwhile, domestic freight saw a whopping 200 per cent rise compared to June 2020.

Experts across the aviation sector have unanimously agreed that cargo was the only revenue generator for Indian carriers. So much so that carriers even reconfigured their passenger aircrafts to deliver essentials and medicines during these times.

Also see: Tiruppur textile exporters shift to air transport to meet year-end deadline

However, freight levels are still not at par with pre-Covid levels. Indian carriers are short of by per cent compared to June 2019 levels of cargo. The freight carried in June 2020 was slashed by more than 63 per cent compared to the previous year. The lower freight carried by carriers in 2020 was a clear effect of the nationwide lockdown due to the pandemic that year.

Nripendra Singh, Growth & Strategy Consultant, Frost & Sullivan, said that both “airlines and airports have come to a conclusion that the spike in cargo is short-lived. Though it can be a ripple effect of the e-Commerce boom because of Covid, and it can be an ancillary revenue for airlines, it cannot be the core focus for them.”

When asked when one can expect pre-Covid level of freight, certain other experts said that with e-Commerce opening up in several States, it is likely to reach pre-Covid levels by the third quarter of FY22.

However, Singh said that cargo operations will reach normalcy only by the third quarter of FY23.

He explained that cargo is usually a front indicator of where air passengers are likely to move globally. It is a metric for airlines to measure economic activity in regions while bidding for routes. So when cargo increases, passenger travel will increase too. However, given the looming fear of the third wave, it can be expected that cargo will reach pre-Covid levels only by the end of the calendar year 2023 or early 2024.

Published on August 03, 2021

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