Logistics

Can the Tatas fly a full circle into cargo business?

TE Raja Simhan Chennai | Updated on October 16, 2021

JRD Tata, Chairman of Air India, photographed at Bombay’s Juhu Aerodrome on October 15, 1962, with a De Havilland Leopard Moth aircraft, after re-enacting the first scheduled air service in India on its 30th anniversary   -  The Hindu

Trade wants end to foreign airlines’ dominance; opportunity for domestic carrier

On October 15, 1932, JRD Tata inaugurated civil aviation in India with his epoch-making Karachi-Ahmedabad-Bombay flight in a single-engine aircraft carrying a cargo of mail. On its 89th anniversary, there is now hope that the Tata Group, which is set to take over Air India, will enter the air cargo business also and create a ‘Desi’ air cargo behemoth — a long-pending demand of the trade to counter the dominance of foreign players.

“India is totally dependent on foreign airlines for air cargo. We must create our capacities. For the Tatas, the treasure is unexploited opportunities in air cargo. They can use one of its many Air Operators Permits (AOPs) and start a dedicated cargo airline by converting required aircraft from its stable,” said B Govindarajan, a former employee of Air India and now COO of Chennai-based Tirwin Management Services, a cargo consultation and training firm.

Secondary income

Historically, passenger-driven airlines have looked at cargo as a secondary source of income. SpiceJet, which recently launched its cargo business, is still in its infancy. BlueDart Express provides only domestic capacity but not measurable international cargo capacity, he said.

“Tatas have AOPs to use and aircraft to convert for an exclusive air cargo operation of scale that will certainly help Indian trade and provide a new meaning to the ‘Make In India' movement,” Govindarajan added.

“We need a strong cargo airline because we have open skies in cargo but don’t have much of an Indian presence. It is a golden opportunity and Tatas can start a desi cargo carrier and generate volumes to take on the foreign players,” said V Thulasidas, former chairman and managing director of Air India.

A few years back, Indian Airlines had considered a cargo set up by converting some of the old 737-200s and operating mostly on behalf of the Postal Department, and mainly in the North-East. That was one attempt they made, he added.

Afzal Malbarwala, President, Air Cargo Agents Association of India, said today foreign players are dominating the market by bringing in their own freighters. India’s exports are booming. The Tatas have got so many wide-body aircraft of Air India and others, converting some of them into freighters will be much better. The dominance of foreign carriers will come down, he added.

A better position for bargain

One can bring import shipments from Europe to India at 15-20 pence per kg. But from India they want a minimum of ₹300 a kg, said Malbarwala. “They are trying to cover the cost from India by fleecing our market. We have no choice. With a desi carrier, trade will be in a better position to bargain for both space and freight and work out the costing accordingly for both routes,” he added.

Published on October 15, 2021

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