Indian LCCs eye express cargo

Indian budget airlines plan tocarry express cargo as they look atalternative revenue streams to boosttheir financials amid falling passengerfares, Reuters reported. Low-cost airlines such as Air Deccan,SpiceJet and GoAir expect package anddocument shipments to make up at least10 percent of their revenue in their firstfull year of cargo operations. GoAir recently launched cargooperations while SpiceJet […]


Indian budget airlines plan tocarry express cargo as they look atalternative revenue streams to boosttheir financials amid falling passengerfares, Reuters reported.

Low-cost airlines such as Air Deccan,SpiceJet and GoAir expect package anddocument shipments to make up at least10 percent of their revenue in their firstfull year of cargo operations.

GoAir recently launched cargooperations while SpiceJet hopes tostart in the second half of 2007 and AirDeccan plans to lift on-board courierfrom February 2007.

Currently, air cargo within India iscarried primarily by full service carriersJet Airways, state-run Indian and expressdelivery firm Blue Dart Express.

"Cargo revenue will rise substantially from next year, reaching at least a tenth of revenue," GoAir’s chief commercialofficer Raj Halve said.

Deccan Aviation reported a loss ofINR3.4 billion rupees (US$76 million)in the fifteen months ended June 2006,while SpiceJet posted a loss of INR414.2million (US$9.3 million) in 2005/06.

Budget airlines need to turn aroundin 25 minutes to meet costs. But poorinfrastructure at Indian airports meansthe turnaround time extends to at least45 minutes.

The INR22 billion (US$492 million)courier industry and the INR40 billion(US$894 million) express segmentare expected to grow 20-25 percent ayear, according to a research report byEdelweiss Securities.