Spicejet is about to launch freighter operations… sort of.
The India-based low-cost carrier said that, as part of an increased focus on cargo, it would put one or two of its passenger Q400s into overnight all-cargo service. The carrier’s cargo boss Manjiv Singh was quoted in The Financial Express as saying “The aircraft that will be used for this operation would be those sitting dead at night. They would be utilized to fly ‘cargo on seat’ between Bangalore and Delhi.” He added that Spicejet’s cargo revenue was currently about 3-4% of passenger revenue, but that, “if our plans work out, these revenues should stand at 8-10% of our passenger revenue by the end of the current fiscal.”
Spicejet may be starting small – a Q400 with some packages on the seats is a long way from a real freighter fleet – but its increased cargo focus is not surprising, considering that domestic cargo traffic in India has been growing at between 10% and 25% for the last fourteen months, driven by a dramatic surge in e-commerce.
Yes, the online shopping mania that hit China early this decade – and drove an almost unbelievable explosion of demand for express package delivery – appears to have spread to India, and is beginning drive similar growth in India’s express industry.
According to data published by The Economic Times, The turning point for domestic air cargo traffic, which had begun logging intermittent double-digit monthly growth by the end of 2013, was in May 2014. Overall growth in air freight traffic doubled to 24.8% that month, compared with about 12% in April 2014. This growth has been strongest in Bengaluru, Hyderabad, and New Delhi, where the big e-commerce companies have their major distribution centers. Delhi’s Indira Gandhi International Airport has been the leader, beginning in May 2014 when it reported cargo volume up 42.2% y-o-y, followed by a 41% in June.
India should have seen an air freight boom well over a decade ago. The country is geographically big and had poor road and rail infrastructure, the population was huge, people were relatively well educated… in short, all the factors that would normally lead to a surge in air freight traffic. But airline after airline tried and failed to start main-deck freight operations. The government broke promise after promise about massive new infrastructure projects to support the domestic air freight industry. Foreign investors, eyeing a big prize, came away empty-handed. In short, business as usual in India.
The only successful air cargo operation we are aware of since the beginning of this century is Blue Dart Aviation, which started out as the air arm of Blue Dart Express, and now serves a similar function for DHL, which bought Blue Dart.
With that kind of history, we are cautious about predicting that the Indian air cargo industry is finally going to take off. But if anything can make it happen, it will be snowballing numbers of ordinary people demanding that the shoes they purchased online today be in their hands (well, on their feet) by tomorrow.