Kingfisher plans cargo business

UB Group promoted Kingfisher Airlines is planning to float its own dedicated cargo airline through a tie-up with a foreign carrier.

"We are looking at a dedicated cargo service, but a final decision is yet to be taken. We hope to take a final decision in three months," said Hitesh Patel, vice president, Kingfisher.

"An international tie-up would obviously make sense," he added, without disclosing any names. Patel added that the carrier was evaluating used freighter aircraft for its cargo operations.

Full service carrier Jet Airways is also planning to launch its dedicated cargo operations through a tie-up with the German carrier Lufthansa.

Air Deccan supremo G R Gopinath is also believed to be looking at setting up a cargo airlines business.

The government recently allowed the foreign carriers to have a 74 per cent stake in Indian cargo carriers. A total of 49 per cent FDI was earlier allowed in the cargo sector, but no investment by a foreign airline was permitted.

This means that, in order to have a tie-up with a foreign carrier, both Jet and Kingfisher will have to float a separate, subsidiary cargo airline.

"Investment in the cargo sector is set to almost double, with the government's recent decision to allow FDI in cargo carriers from foreign airlines. Several international carriers such as Singapore Airlines and Emirates might look at a tie-up with Indian cargo carriers now," said an analyst.