Indian Air Cargo Poised To Fly High

Indian air cargo has an appealing story to tell. The country’s air cargo segment grew in leaps and bounds in the past seven decades. From small units of shipments in the 1950s, India's air cargo sector has scaled to a level where it attracts more and more international cargo operators.

- Renjini Liza Varghese

Indian aviation segment which was dominated by the national carrier for long has seen whirlwinds in the past 25 years. On one hand, it saw the emergence of private airlines and at the same time it also witnessed bankruptcies, sell-offs and consolidation. Around 30 airlines ceased their operation in the country which includes East West Airlines, Damania Airways, NEPC, Paramount, ModiLuft, Kingfisher, Gujarat Airways to name a few. And airlines like Indian Airlines, Deccan Aviation and Sahara Airlines took the merger route.

The four airlines, national carrier Air India and private carriers like Jet Airways, Indigo and SpiceJet put together command 80 percent of the civil aviation market in the country. The passenger segment in the country had grown substantially over the last decade. According to the data from India Brand Equity Foundation (IBEF), the domestic passenger traffic expanded at a compound annual growth rate (CAGR) of 11.46 percent between financial year (FY) 2006 and FY 2017.

Owing to two major challenges — the crippling infrastructure constraints at major airports, and an uptick in fuel prices — the rating agency Crisil Research predicts a decline in the air passenger growth over the next five years. A latest report from Crisil Research says, “Growth decelerating ~800 basis points (bps) to 13-15 percent annually in the five fiscals through 2022, compared with a blistering 22 percent seen in fiscals 2016 and 2017. This fiscal, it is seen slowing 300-500 bps to 17-19 percent.”

Indian air cargo operations started by folding the seatings in the passenger cabins in the 1950s on airlines. Now the segment has grown to be one of the key and promising markets globally.