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In the first such move of its kind, Jet Airways plans a foray into the air cargo business by leasing up to three Airbus A330-200F wide-body freighter aircraft from Etihad, its Abu Dhabi-based partner airline.
The move will help the company tackle Dubai-based Emirates, which carried the highest amount of inbound and outbound air freight in 2013-14. Mumbai-based Jet is making a major bet on air cargo because it expects India’s manufacturing story to see a strong upswing with Prime Minister Narendra Modi’s Make-in-India campaign.
Also, there is a major vacuum in the sector, as no major domestic carrier has its own long-haul cargo fleet. Business Standard learnt the Naresh Goyal-promoted carrier has already trained local personnel for this new business arm.
Last April, it appointed a European Etihad executive, James Gilliard, as manager (cargo) for the Asia-Pacific region, based out of Singapore. The plan is to start with the wet lease (the term for hiring an aircraft with crew and insurance, beside other services) of one A330-200F in the next few months and later expand. As the business grows, the aircraft would be converted into dry leases (of only the airplane).
“A wet lease would make sense while testing the waters, especially with the US Federal Aviation Administration downgrade (of Indian aviation) that prevents addition of new flights to the US. Jet will get the pilots from Etihad, along with the aircraft. James is currently responsible for scouting cargo business opportunities in the Southeast Asian region,” a source said. To detailed email queries, a Jet spokesperson said, “We do not wish to comment on your queries at this stage.”
“India is easily among the biggest opportunities for the air cargo business, where the competition is very limited. And, with the Make-in-India campaign, one can expect a huge growth in export sectors such as pharmaceuticals, automobiles and electronic equipment,” an executive with a global carrier, which offers air cargo services in India, told this newspaper.All airlines offer belly cargo — commercial freight carried in the belly of passenger aircraft — but Directorate-General of Civil Aviation records show only Chennai-based Blue Dart Aviation has a fleet of five dedicated Boeing B757 cargo planes. Government-owned Air India (AI) had stopped freighter aircraft operations in early 2012, due to financial problems. In 2013-14, Emirates was leader in the air freight business by carrying 184,753 tonnes, of which 131,748 tonnes was outbound cargo. Jet trailed with a total air cargo business 120,821 tonnes, of which outbound accounted for 67,186 tonnes.
AI was a distant third, with total business of 95,473 tonnes. In 2013-14, India’s international freight traffic grew two per cent to 1,261,542 tonnes. Worldwide demand for airfreight should expand by 4.5 per cent in 2015, an increase similar to what has been seen in 2014, according to an International Air Transport Association report. The Jet scrip at the BSE on Friday closed 4.7 per cent up, at Rs 460.15.
The move will help the company tackle Dubai-based Emirates, which carried the highest amount of inbound and outbound air freight in 2013-14. Mumbai-based Jet is making a major bet on air cargo because it expects India’s manufacturing story to see a strong upswing with Prime Minister Narendra Modi’s Make-in-India campaign.
Also, there is a major vacuum in the sector, as no major domestic carrier has its own long-haul cargo fleet. Business Standard learnt the Naresh Goyal-promoted carrier has already trained local personnel for this new business arm.
Last April, it appointed a European Etihad executive, James Gilliard, as manager (cargo) for the Asia-Pacific region, based out of Singapore. The plan is to start with the wet lease (the term for hiring an aircraft with crew and insurance, beside other services) of one A330-200F in the next few months and later expand. As the business grows, the aircraft would be converted into dry leases (of only the airplane).
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“A wet lease would make sense while testing the waters, especially with the US Federal Aviation Administration downgrade (of Indian aviation) that prevents addition of new flights to the US. Jet will get the pilots from Etihad, along with the aircraft. James is currently responsible for scouting cargo business opportunities in the Southeast Asian region,” a source said. To detailed email queries, a Jet spokesperson said, “We do not wish to comment on your queries at this stage.”
“India is easily among the biggest opportunities for the air cargo business, where the competition is very limited. And, with the Make-in-India campaign, one can expect a huge growth in export sectors such as pharmaceuticals, automobiles and electronic equipment,” an executive with a global carrier, which offers air cargo services in India, told this newspaper.All airlines offer belly cargo — commercial freight carried in the belly of passenger aircraft — but Directorate-General of Civil Aviation records show only Chennai-based Blue Dart Aviation has a fleet of five dedicated Boeing B757 cargo planes. Government-owned Air India (AI) had stopped freighter aircraft operations in early 2012, due to financial problems. In 2013-14, Emirates was leader in the air freight business by carrying 184,753 tonnes, of which 131,748 tonnes was outbound cargo. Jet trailed with a total air cargo business 120,821 tonnes, of which outbound accounted for 67,186 tonnes.
AI was a distant third, with total business of 95,473 tonnes. In 2013-14, India’s international freight traffic grew two per cent to 1,261,542 tonnes. Worldwide demand for airfreight should expand by 4.5 per cent in 2015, an increase similar to what has been seen in 2014, according to an International Air Transport Association report. The Jet scrip at the BSE on Friday closed 4.7 per cent up, at Rs 460.15.
