European aviation holding company ASL Aviation Group said today that, through subsidiary carrier Farnair, it would increase its shareholding in India-based all-cargo startup Quikjet from 50.93% to 72.59%.
Is this a sign that India’s time to shine on the air freight stage has finally come? Is ASL’s plan to put one of its newly-converted 737-400Fs into Quikjet livery the first sign of an explosion of the domestic air freight industry?
This is not a rhetorical question. Go back 20 years, and consider the two big Asian giants poised for economic takeoff. China and India both had populations over a billion, and there was a general belief in the world that both had the potential for huge economic growth. India seemed better placed. It was a democracy, it offered the rule of law, and its population was better educated. A bit of economic reform, mostly the cutting of bureaucratic red tape, and the sky was the limit. China? A one-party communist state in which the economic reform needed for serious growth would never be allowed.
And look what happened. China is still a one-party state, but it is communist in name only, and reform unleashed an explosion of economic growth perhaps unequalled in history. And with that economic growth came equally explosive growth in the air freight and express industry.
India? Well, after twenty years, the best one can say is that India is still poised for economic takeoff. Every attempt at reform, however loudly trumpeted, was soon strangled in the same old red tape, and nothing changed – the country’s huge potential was wasted once again.
No better illustration of this strangulation can be found than the air freight industry. When Praful Patel was appointed Civil Aviation Minister in 2004, he promised sweeping change. Money for aviation projects would be available, and freight would be a priority. A huge multimodal cargo hub and airport was announced at Nagpur. New cargo airlines sprang into existence, and existing airlines launched cargo departments. Freighters were ordered.
And then? Nothing. The all-cargo carriers went out of business. Freighters were retired and orders were cancelled. No cargo hub appeared at Nagpur. Cargo fell off the radar of the passenger carriers.
Fast forward another ten years and once again we see that India’s economy, and its air freight and express sector, seems about to explode.
But will it? At this point, the best answer seems to be “Maybe.” Recently elected Prime Minister Narendra Modi based his campaign on economic growth, and one big barrier to growth, stifling caps on foreign investment and foreign ownership, has been lowered. But will this be enough? Will this attempt at reform survive the attempts to smother it that are sure to come? Time will tell, but in the meantime, in the air freight sector at least, there are signs of hope.
- The government allowed Jet Airways to ACMI lease an A330-200F from Etihad (which holds a minority stake in Jet) for a six-month period. This was far from what Jet and Etihad hoped (three A330-200Fs, with two-year ACMI leases morphing into long-term dry leases), but perhaps more than would have been allowed a year ago.
- The Foreign Investment Promotion Board approved Farnair’s application to increase its shareholding in Quikjet to almost 73%.
This latter move comes as ASL, through Farnair, is about to place the first 737-400F in Quikjet and launch scheduled domestic cargo service in India. Which sounds promising, but should be accompanied by a couple of caveats. First, Quikjet tried to launch operations with a Farnair ATR72F, but quickly gave up; and second, Cargo Facts believes (but has not been able to confirm), that the new Quikjet service launch hinges on a contract to operate for one of the major integrators.
Leave a Reply