Carriers look to cargo services to increase revenues

September 2nd, 2008 - 2:01 pm ICT by IANS  

Mumbai, Sep 2 (IANS) To counter heavy losses, cash-strapped Indian carriers are now looking at increasing cargo operations to augment revenues. The Gurgaon-based low cost carrier SpiceJet that started cargo operations in April, says it sees huge growth opportunity in this sector.

“We see a tremendous potential in this business,” SpiceJet chief commercial officer Samyukth Sridharan said. “We are confident of touching the magic figure of Rs.1,000 million annually within the first three years of our cargo operations.”

According to him, the domestic cargo industry is estimated to grow in excess of 15 percent annually.

At present, SpiceJet has flights to nine destinations including the four metros, Bangalore and Hyderabad. The company will soon start cargo operations from Guwahati and Bagdogra in West Bengal.

Echoing a similar sentiment, silk farmer-turned-aviator G.R. Gopinath, who introduced the concept of no-frill carriers in India, feels there is a huge market in the hinterlands of the country.

His new venture, Deccan Express Logistics, will be setting up express cargo operating facilities at Delhi and Hyderabad airports, apart from a cargo hub at Nagpur airport.

“There is a huge market for connecting interiors,” Gopinath told IANS.

“The emergence of new cargo hubs will not only spur sectors such as services, agricultural and manufacturing, but will also decongest Mumbai and Chennai airports, which will save distribution delays and huge amounts of wastage,” he added.

According to an aviation analyst from a leading broking firm in Mumbai, the Indian aviation industry has hit turbulence with cumulative losses amounting to around than $2 billion in 2008-09.

“With fuel costs being so volatile, it’s grim days ahead for carriers. They are pulling out all plugs and now looking at increasing cargo carried in the aircraft’s belly,” he said requesting anonymity

Concurred Air India cargo general manager A.S. Rathod. “In order to check shrinking revenues, Indian carriers are now looking at options like increasing cargo business for ancillary revenues,” he told IANS.

Rathod said Air India is now planning to increase its cargo business by offering incentives.

Kingfisher Airlines, promoted by liquor magnate Vijay Mallya, last month introduced the IBS iCargoNet software solution for airline cargo management system.

Kingfisher’s executive vice president Rajesh Verma said the adoption of iCargoNet would give flexibility of operations.

“It is imperative that our solutions provider gives us a competitive edge. The solutions must be scalable in line with our expansion plans in the cargo business in the domestic market while optimising operation costs,” Verma said.

iCargoNet is designed to manage the entire cargo business of an airline, from planning, sales, operations and ground handling for both inbound and outbound flights.

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