To make up for lost passengers, carriers bet big on cargo business

SpiceJet inducts its 9th freighter, Air India operates cargo-only flights to Seoul and Singapore

SpiceJet is inducting a wide-body Airbus A340 freighter, which will allow it to operate non-stop flights to Africa, Europe and the Commonwealth of Independent States (CIS) countries.
 

While SpiceJet has been the most aggressive in the cargo business (the A340 is its ninth aircraft in the cargo fleet), other carriers, including Air India, IndiGo and Vistara, are growing their freight businesses.
 

The expansion of cargo operations comes on the back of weak passenger demand in the domestic market and limited capacity on international routes. This, coupled with lower fuel prices, has helped Indian carriers to effectively deploy their aircraft for cargo operations. The shortage of international capacity has also pushed up freight rates and these are nearly double compared to the pre-Covid levels.
 

“The induction of our first wide-body cargo aircraft will be a huge gamechanger in our remarkable journey that has seen SpiceJet emerge as the country’s largest cargo operator. Our long-haul cargo flights would further help boost Indian businesses and provide farmers and pharma companies seamless access to newer markets,” SpiceJet Chairman Ajay Singh said. SpiceJet is the only airline in India to have both standalone passenger and freighter planes. It said the A340 can carry 35 tonnes of cargo.
 

An Air India spokesperson said the airline has introduced cargo-only flights on high demand sectors, keeping in view the drop in passenger travel and surplus capacity available for cargo carriage.

Air India carried 63 tonnes of cargo on three flights from Delhi to Seoul earlier this month and is operating cargo-only flights from Bengaluru and Chennai to Singapore. These flights have good loads, comprising perishables largely, said Air India.
 

International freight movement to/from India declined 57 per cent in the June quarter but now both Delhi and Mumbai airports are seeing a pick up in volumes. Cargo reached 65-70 per cent of pre-Covid levels in July, it is learnt. This is due to increase in frequency of freighters, charters and limited scheduled international flights. While pharma and perishables dominated exports in the past few months, there has been a pick up in exports of readymade garments, leather and textiles now.
 

Vistara, which recently inducted its second Boeing 787-9 aircraft, is looking for cargo opportunities from Europe, as it plans new routes. A passenger 787-9 aircraft can carry 8-10 tonnes of cargo on the India-London route. Vistara operated 34 cargo flights within India, transporting 220 tonnes during the lockdown, the said airline.

“Generally, global air cargo demand is down by roughly 50 per cent year-on-year due to various economic factors, and, in India, the trend is broadly the same. However, international flights for passengers have further fallen by over 90 per cent, leaving little room for cargo. Hence, this has stimulated many airlines to convert their passenger aircraft to fly cargo in the main cabin as well as in the belly. IndiGo did this in early April. Now, it has around 10 aircraft which have the necessary equipment to carry “cargo-in-cabin” and operate as “freighters,” said airline’s chief commercial officer Willy Boulter.
 

IndiGo operated over 200 cargo-only charter flights in the last two months to destinations, including Bikshek, Cairo and Chengdu. “Cargo is a good short-term opportunity for Indian airlines. It will help them generate extra cash. However, it cannot compensate for passenger flights until business reaches a significant scale,” said aviation consultant Vishok Mansingh.
 

The return of belly space on passenger flights, fuel and freight rates are factors to watch out for. Some executives believe that there may not be sufficient demand for freighters once passenger flights resume normal operations.