One or two decades ago India was being hyped as one of the new economic tigers and there was much promotion on the opportunities the country was facing - among others in the air cargo scene. It turned out somewhat differently as far as air cargo is concerned as national carrier Air India lagged behind and never became an interesting or competitive factor in air freight.
Once a proud freighter operator
Interestingly Air India was in the past amongst the few global players who operated their own freighters. And when it did, it had a significant share of the cargo market at the time in and out of India. In the mid-nineties it stopped freighter operations and life has not been the same since for the carrier in the air cargo field. From a very dominant position, today it just has less than 10% of the total market share.
Not competitive enough
The situation at Air India reflects the story of India’s position in the global cargo market. Air India’s loss became the gain for the middle eastern carriers whose phenomenal growth, fueled by wide-body aircraft and freighters acting as a force multiplier, became the new leaders in the Indian air cargo market. Their growth became the factor for the rise of the hubs in the middle east regions. Dubai, Abu Dhabi, Doha and now Istanbul all have gained from the lack of focus on air cargo by the Indian authorities and airlines. Trying to ape these airports as well as others such as Singapore and Hong Kong and trying to focus the policy on creating an International Air Transport Hub was bound to fail. India doesn’t have large international airlines which can compete against the Middle- and Far Eastern carriers and the most recent large player, Turkish Airlines. The fastest growing low-cost carrier, Indigo, is soon going to become the largest Indian airline. Actually, it is already one. But it operates single aisle aircraft not suitable for international cargo movements. Therein lies India’s biggest challenge.
The country undoubtedly has grown its economic position, but air cargo has not reached the potential it could.
Getting back on track
India is a country which has a huge potential and is one of the fastest growing economies worldwide. While over the past few years it has worked on creating a necessary infrastructure for cargo, the infrastructure connecting the airports to the hinterland leaves a lot to be desired. During peak times it is next to impossible to reach most airports in quick time. For example, the Mumbai and Chennai airports are located in congested traffic zones. So there is an urgent need to rearrange airport infrastructures in such a way as to streamline cargo flows in the supply chain and have themselves geared towards markets such as e-commerce, a train which is also gathering speed in this massive country.
Basically, the Indian economy is healthy and doing well. The World Bank has projected that India’s growth alone in 2018 was in the region of almost 7.3%. This growth rate they say will continue at the same level during the coming few years.
China slowing down and India speeding up? It seems that way, although India would have a long way to go in order to catch up with China’s growth and fast decision making. However, the country has an enormous potential with well-educated young people, many of who have made careers in the IT software development area. The demand for their know-how is well known throughout the world.
John Mc Donagh