Cargo boom to fuel domestic freighter plane demand

Thanks to the leapfrogging Indian economy, the country will need 125 freighter aircraft in next 20 years. At present, India has only seven bigger freighters, owned by Blue Dart Express.

European aircraft manufacturer Airbus Head of Cargo Forecasts Jean Luc Bersat told Business Standard: "India will require at least 125 dedicated cargo planes to supplement in economic growth. It will also require nearly 90 dedicated freighters to cater to international air cargo traffic requirements."

Bersat said, "Rather than acquiring new planes, India will be opting converting its passenger airplanes to freighters. India will require more direct freighter flights following the growth in retail sector coupled with boom in exports."

The forecast of 125 freighters are in addition to passenger planes, which have huge belly space to carry cargo.

Earlier, US-based aircraft manufacturer, The Boeing Company, has doubled its long-term forecast for sales in India to 856 planes worth $72 million by 2026 while Airbus has set a target of 935 planes.

Air-India Chairman and Managing Director Vasudevan Thulasidas, said, at the sidelines of Air Cargo India 2006 here, the carrier has already initiated the process of converting its two Airbus A310 aircraft into freighter. "The national flag carrier will be starting its dedicated freighter operations by middle of 2007," Thulasidas said.

EFM, a subsidiary of international aerospace major EADS, has secured the contract of converting A310 aircraft into freighters.

The estimated cost for converting two airplanes into cargo carriers is little over $20 million.

"We actively looking at more business opportunities in India for conversion of passenger airplanes into dedicated freighters," said Anreas Mayer, Director-Sales (Aircraft Conversion), EADS EFW.

Airbus' Bersat said the demand for these freighters are propelled by the growth in Indian express industry.

Express Industry Council of India (EICI) Chairman R K Saboo said, over 1.25 billion shipments were handled in 2005. "The growth rate for express air cargo is between 20 and 25 per cent per annum," Saboo said. Blue Dart Express Senior Vice President Tulsi Mirchandaney said of the total tonnage handled by airports, 64 per cent is air express cargo. Moreover, top five airports is handling 85 per cent of the air cargo traffic of the country.

US-based aircraft manufacturer, The Boeing Company, has also predicted strong domestic cargo traffic for India at 9.1 per cent per cent per year. Scheduled international Indian air cargo traffic was expanding at 7.7 per cent per year from 2000 to 2005. However, the company declined to give specific freighter projections for India.

Boeing Regional Director (Airline Revenue Analysis- Cargo Marketing) Thomas B Crabtree said: "We have no specific numbers for India as it depends upon several other factors. The domestic cargo traffic size could be 265000 tonne. Going by estimates, Asian region will see a growth in wide-bodied freighter fleet." He added that the world freighter fleet will nearly double to 3,563 aircraft by 2025, led by primarily by widebodies, against 1,789 in 2005.

However, industry captains signal a caution note. Emirates Airlines Divisional Senior Vice President (Cargo) Ram Menen said growth in air freight is roughly twice the growth in the GDP of a country. "At the current GDP growth of 8 - 10 per cent air cargo should be growing at 16 - 20 per cent. If facilities are not provided to cater to this growth, India's economic growth will be stunted," Menen said.