The New Delhi-headquartered Indian national carrier has been in the news during the past months because of its financial woes and the government’s plans to sell off the carrier. These have again been put on ice by India’s government, mainly due to the lack of interest by other carriers or financial institutions.
Are own freighters the key to the future?
That’s what Air India’s commercial managers seem to think as recent information shows that there is a serious consideration to re-introduce own freighters into the fleet. Air India operates just over 120 aircraft and inside sources say that despite the size of the fleet that they do not have enough belly space on hand to meet capacity demands from their clients.
Hence, the move to look at having own freighters again.
They even state that there is a need for regular Air India freighter services from India to Europe and the USA.
AI has lost its international role
Once Air India with its then renowned Maharajah Service, was a much sought-after carrier. However, success has dropped considerably during the past decade.
Founded in the early 1940’s as Tata Air Services, Air India Limited as it is known today is 100% government owned and controlled.
The carrier has been making considerable losses since 2006 and it is said that potential investors are scared off by what they see as an indiscernible maze of internal problems.
Currently, the airline has only around a 20% share of the Indian market on both the passenger and cargo segments. There were moves already in 2000 to try and privatise the airline. There was much internal political protest and these plans fell apart. Another move was made in 2013 and then again in July 2017.
Too many political cooks in the kitchen?
Cargo in India continues to grow
The Indian air cargo market was once seen as being the new Asian Tiger as among others, the pharmaceutical business started to boom. There have been new distribution centres set up at other airports besides Mumbai and Delhi, but Air India’s share of these markets has not been satisfactory as other European and Asian international carriers have managed to siphon off most of the traffic. Air India’s cargo terminal at their main hub in Delhi remains under utilised. It is not run by themselves but is outsourced to Cargo Service Center India and the Delhi Airport.
At the moment, it is hard to believe that an investment in freighter aircraft could pay off considering that Air India’s share of the cargo market with around one fifth or 250,000 tonnes per year, is rather small. So, the question is how the carrier could come out cost-even on such a service?
The only viable solution would possibly be that Air India makes a deal with another international freight operator who would operate on their behalf or consider leasing in one or two B747Fs for a limited period.
Will these plans end up on the shelf the same as the privatisation ones have?
John Mc Donagh