Air Cargo Means More Revenues

Domestic carriers are no longer averse to picking up cargo – thanks to e-commerce – to boost bottom lines.

India’s domestic carriers seems to have woken up to the fact that cargo brings in more revenues than passengers. Coming as it does on the heels of high air turbine fuel prices and a falling rupee, the move towards cargo augurs well. It is no wonder that SpiceJet’s dedicated air cargo service – it started barely a month ago – has found takers.

While SpiceXpress, SpiceJet’s cargo service has been flying cargo to Indian destinations along with Hong Kong, Kabul, Singapore and Dhaka, reports have been doing the rounds that low-cost rival IndiGo, the country’s largest air-line by market share, has chalked out plans for transport of perishable goods like fish as belly cargo.

Incidentally, all domestic airlines have had losses. IndiGo, for example, reported a loss of $99 mn (652 crore) during the July-September quarter against a profit of $83 mn (551.6 crore) a year ago. The airline management blamed the ‘unmaintainable’ low fares due to competition, rising fuel prices, volatility in foreign exchange as the primary reasons for the losses – it is first since being listed in November 2015.

SpiceJet too, has had losses. After reporting profits for 13 consecutive quarters, SpiceJet reported a loss of $ 6 mn (38 crore) during the first quarter of the current fiscal. Jet Airways has found the going so tough that it has delayed salaries. In fact, there have been unconfirmed reports that Tata Sons, which has stakes in full service carrier Vistara and AirAsia India, could take a majority stake in Jet Airways and save it from extinction.