With only five converted freighters comprising its entire fleet at the moment, the expansion 40-plane plan is clearly an ambitious one. Although not new to the cargo business, the carrier had previously relied solely on the belly capacity of its passenger side.
PK Gupta, executive director, sales and marketing (cargo) Air India told Payload in an interview that the cargo unit is currently carrying out market surveys to assess various markets for possible route expansion.
Teams already gone out to Hong Kong and Guangzhou, Tokyo and Osaka with teams preparing to head to New York, Chicago, Los Angeles, Toronto, London, Perth, Sydney, Johannesburg and Durban. Gupta said the carrier is hoping to complete the surveys by end-March.
The cargo carrier aims to be operating to the US within the next 3-4 years, Gupta said.
In the meantime the carrier is discontinuing its Paris route because of pricing issues. Charges by rival carriers like Air France-KLM and Lufthansa are up to 25 per cent lower than what AIC is charging.
Gupta said the A310 freighter used on that route would be shifted to Hong Kong and Singapore effective 5 February pending slot clearance. The other A310 will remain on the current Frankfurt service.
Lofty cargo plans
Ultimately the cargo division aims to boost its current (2007) turnover of INR8.5 billion (US$215.7 million) ¨C of which INR5.6 billion stems from Air India business and the remainder comes from theIndian Airline business ¨C to INR10 billion this financial year.
The cargo division now accounts for about 10 per cent of Air India’s total revenue, something Gupta said the division is aiming to increase to 20-30 per cent over the next decade.
The cargo carrier is also aiming to capture 30 per cent of the Indian (import/ export) air cargo market within the next 4-5 years, with Gupta optimistic this is possible because "we are the only carrier that can off er seamless cargo transfer between international and domestic city pairs.
The carrier will also continue to tap the belly hold of its parent’s passenger aircraft fleet . The cargo division recently won over some additional capacity following the carrier’s decision to lower passenger baggage allotment to the US from 32 to 23 kilograms, in line with most international carriers.
"This results in less baggage onboard and the ability to carry more cargo to the US – roughly 10 per cent more, but this depends on the type of cargo,"he said. On a payload of 34 tonnes AIC is getting about 24-26 tonnes, Gupta said.
With a typical B777 to New York Gupta said AIC was getting about 10 tonnes of cargo capacity and overall, AIC is uplifting about 2,000 tonnes per day in total.
The cargo division is also looking at a web based tracking system and call centre. "All these facilities will, overall, form a package which will result in customers coming to us,"according to Gupta.
Domestic expansion
On the domestic front, AIC has converted three 737-200s to freighters with one operating for the Department of Post and Telegraph between Kolkata, Guwahati, Imphal and Agartala in the northeast.
Gupta said the company plans to operate five B737-200s of which two have already commenced operation on the Delhi-Mumbai-Bangalore-Delhi route following its recent JV ¨C the first public-private partnership in India’s aviation industry – with Indian logistics provider Gati to operate a dedicated freighter service based out of the centrally located Nagpur.
Eventually the five aircraft will operate daily service from Bombay, Calcutta, Chennai and Delhi into Nagpur where there will be an exchange of pallets.
Gupta said Cabinent approval had been given for the transfer of the Nagpur airport to a joint venture between the Airports Authority of India (AAI) and the Maharashtra Airport Development Corporation (MADC) to develop a Multimodal International Passenger and Cargo Hub (MIHAN) in Nagpur.
Air India will refocus its cargo flights to utilise Nagpur as its hub with its ground handling division likely to form a JV with another domestic or international player to handle cargo at Nagpur.
Already Air India Cargo has a joint venture with Singapore Airport Terminal Services (SATS) to do handling at Hyderabad and Bangalore. In Bombay AIC’s ground handling division is also involved in a consortium headed by Delhi International Airport Ltd (DIAL) to handle cargo at the Delhi airport.
Ultimately Air India’s international expansion will be based out of Nagpur. "That is the long term plan,"said Gupta.
Nagpur will gradually be developed into a sorting hub, a process that is expected to take 3 to 4 years and until then it will be used for pallet transfers.
"In the next five years we hope to develop it as a full-fl edged product, there’s 4,000 hectares of land which has been developed there. Then we hope not only Air India will use it, as the national carrier we are there, but its open to everybody and we hope other carriers will come to Nagpur to discharge cargo, which will be sorted for final destinations."
Fleet expansion
Meanwhile, Air India’s fleet expansion will see a mix of converted Air India passenger planes and newbuild freighters.
A total of seven B737-200s will be converted (three converted to date), eight A310-300 (two converted to date) and six B747s will be converted between 2012 and 2015. Gupta said the conversion dates of the next two A310 will likely be deferred because of delays to the B787 programme, of which Air India was planning to use to replace the A310s.
The new builds will number roughly 22, but Gupta said it was too early to say what the composition would be as this will depend on the market assessments currently being carried out.
He did say, however, that the new aircraft would be a combination of small capacity, short range for domestic operations; medium capacity, short range for the Gulf countries and large capacity, long range for North American, European and Far East markets. This would likely mean 10 freighters in the 20-40 tonne range and another 10 in the 80+ tonnes category.