IndiGo joins Air India in a massive fleet expansion to take on Gulf carriers

A tremendous amount of new belly capacity will emerge in India’s air cargo sector, in addition to dedicated cargo aircraft or cargo-only networks already on the cusp of development.

Domestic low-cost airline IndiGo will buy 500 aircraft from Airbus. This is a $50 billion deal that follows Tata Group-owned Air India’s recent order for 470 aircraft from Airbus and Boeing.

And local industry sources said Air India is also close to finalizing a deal to buy five cargo planes, likely from Airbus. The source said: “We expect an official announcement next week.”

According to sources, Tata executives, who run Air India, believe the country’s e-commerce growth will boost demand for express parcel services.

For IndiGo, the latest purchases will add to the 480 aircraft already on order from Airbus – together they comprise a mix of A320/321 Neos and A321XLRs with deliveries stretching into the next decade.

CEO Pieter Elbers, a former KLM veteran, said the latest aircraft order, the largest ever, will solidify IndiGo’s position in the Indian market as the economy expands.

However, some doubt that the Indian freight industry is large enough to have multi-billion dollar stakes in the market.

On the freighter front, IndiGo has taken a differentiated approach owing to India’s subdued growth in air freight imports/exports over the past fiscal year.

And Vineet Malhotra, co-founder and director of Kale Logistics Solutions, also noted that IndiGo has a sustained focus on transportation.

“Although IndiGo had carried the cargo on its network by utilizing belly capacity, the airline made the ambitious decision to introduce passenger-to-cargo (P2F) jets,” said Malhotra. “As the airline’s international network and frequencies grow, there is an opportunity for it to develop world-class cargo products using both its A321 Freighters and extensive belly capacity.

Joy John, director of sea and air freight at Mumbai-based freight forwarder Jet Freight (JFL), said IndiGo’s fleet expansion bodes well for India’s freight trade, while Vaibhav Vohra, MD at Delhi-based freight forwarder Continental Carriers , spoke of airline fleet expansion linked to the Indian government’s policy initiatives and infrastructure development.

“This will provide freight service providers with numerous opportunities to improve customer experience and enhance service solutions on both domestic and international routes.”

Frederic Horst, Managing Director of Trade and Transport Group, said the addition of more A320/321 Neos would particularly help IndiGo expand its leadership in the domestic airfreight market. He said: “On international routes, most of the air cargo traffic is handled by cargo planes and the bellies of wide-body passenger planes. So the Airbus passenger narrowbodies will have a much smaller impact there.”

However, industry reports are generally supportive of India’s growth potential. Boeing’s World Air Cargo Forecast 2022-2041 projects India’s domestic air cargo trade to grow significantly at 6.9% per year over the next two decades, while the latest report from the Trade and Transport Group projects India’s air cargo traffic in 2022 to be 2, Estimated at 2 million tons. and estimates that it will reach 2.5 million tons this year.

While it remains to be seen how the increase in capacity will play out in a market dominated by Gulf airlines, there is no denying that competition for market share will intensify.

Related Articles

Back to top button

Subscribe To Our Newsletter

Don't miss new updates on your email