Freight network ambitions are fading, but IndiGo remains bullish on air freight

India’s largest private airline, IndiGo, appears to be slow to develop its freighter network as air cargo imports and exports grow at a slow pace and major economies suffer from demand tailwinds.

The addition of a dedicated cargo aircraft – a converted A321 – last September bolstered the airline’s cargo initiative under the CarGo brand, and it launched on the Kolkata-Yangon route in November.

The global air cargo industry is unlikely to see an increase in profitability this year, according to CarGo International CCO Mark Sutch, pointing to an IATA report that predicted a 33% year-over-year drop in cargo revenue.

He said that FY2022-23 air cargo shipments in India were estimated at 3.14 million tons, the same as last year.

“It is therefore imperative that cargo ships are planned and operated on routes that are viable and have a good balance between incoming and outgoing tonnage,” Mr Sutch said.

IndiGo offers regular freight services from Mumbai to the Middle East and is gradually expanding operations from Kolkata with two weekly services to Yangon, Hong Kong and Vietnam.

In addition, IndiGo has been active in handling some project cargoes between India and the Middle East and also on the domestic route, he noted.

“As we bring our two cargo aircraft into full operation, we are creating a flight plan that works for us as an airline and our customers – and complementing our scheduled network by transporting cargo aircraft on more cargo-heavy routes,” added Mr. Sutch.

IndiGo is expected to add a third reconfigured A321 Freighter to its fleet in the fiscal third quarter (October-December).

“Our A320/321 passenger aircraft carry cargo, but payloads are route dependent and affected by range, passenger and baggage demand. As a result, available capacity is dynamic,” said Mr. Sutch, a former managing director of Cathay Cargo who also had a brief stint at container airline CMA CGM Air Cargo before joining IndiGo.

“Given the large number of passenger flights, our increase in scheduled passenger numbers remains significantly higher than the tonnage of our freighters,” he said.

Mr. Sutch also noted that IndiGo now operates two daily B777 services between Delhi/Mumbai and Istanbul in addition to narrowbody passenger and cargo aircraft services, adding: “The B777-300ER will be operated under a wet lease agreement operated and have an average flight speed of 20 -ton capacity, depending on the passenger load.”

Overall, IndiGo operates over 300 aircraft with about 1,800 daily departures, and in the fourth quarter of fiscal 22-23 the airline returned to the black after suffering significant losses in the year-ago quarter.

Vineet Malhotra, co-founder and director of Kale Logistics Solutions, said India’s air freight volume has “stagnated for the past two years” but believes the longer-term market outlook for freighters investing in capacity remains positive. He said, “India’s air cargo policy aims to make the emerging economy one of the top five air cargo markets by 2025.”

Meanwhile, rival carrier SpiceXpress, SpiceJet’s cargo arm, is looking to consolidate its cargo reach and has announced a strategic partnership with domestic express delivery service provider Ekart for first- and last-mile services.

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