Podcast: Vaayu Group finds niche in A320P2F

Jeff Lee
Hello and welcome to this episode of cargo facts connect, the podcast of cargo facts, the newsletter of record for the air cargo and freighter aircraft industries for over 40 years. I’m Jeff Lee, editor of cargo facts and it’s Friday, the 31st of January. Last time we heard from a new operator in the UAE that has selected the 737-800BCF. This week, we talk to another new carrier based in the UAE, Fly Vaayu. Fly Vaayu is part of aviation company Vaayu Group and is the first A320P2F operator in the region and the third in the world freighters. As CEO Vijay Arumbakkam explains, the group is gaining traction with its commitment to the Airbus narrowbody.

Jeff Lee
Hi Vijay. Welcome to the show. How are you doing?

Vijay Arumbakkam
I’m doing good. Jeff, how are you today?

Jeff Lee
I’m not too bad either. So it’s very exciting to see, you know you, you’re the UAEs 1st and A320 p to f operator and of course you’ve got your AOC in October 2024 and you started flying your first aircraft shortly after that. How’ve the first couple of months been for you.

Vijay Arumbakkam
Thank you, Jeff. It’s been really exciting. I must say that we are very pleased with our performance thus far. As you rightly said, we just obtained our AOC 3 months ago. We’ve already started commercial operations and at the moment we have ramped up our route network in from the UAE. So I think overall it has been a very successful and good start for flyby.

Jeff Lee
And you have selected Ras Al Khaimah in the UAE as your your hub and base. Just talk us through about you know that choice and what kinds of things you’re doing to to build up that that hub.

Vijay Arumbakkam
So as you know, Jeff RAS al Khaima has been the home to Vaayu Group now for more than 1213 years, I would think. So this is a natural extension of our business into the airport and for us as a group it is very important to contribute to the economic growth of the airport and the ecosystem of aviation. So it’s it’s a very critical. Mission for us, as by group now in terms of developing Ras al Khaima as a base for our operations, we have begun very first with the transportation of live animals as you know. The Iraq Airport has got one of the best quarantine facilities, so this is allowed us to facilitate the movement of livestock between India and the UAE. So that’s where we have begun and hopefully we are soon going to expand that. Commodity to include general cargo, you know within the next six months or so as we begin to build our ecosystem in the airport.

Jeff Lee
And your network as you just said is has mostly been flying uh livestock, uh. Between India and the UAE. But I also see that your aircraft has obviously flown around India, Bangladesh. But you’ve even gone as far as Vietnam.

Vijay Arumbakkam
That’s right. So we do the e-commerce. Programme from the DWC hub of the UAE, and that’s simply because that’s where most of our shippers ship goods and it’s also Vietnam simply because that’s where most of the goods get manufactured and gets distributed between India and the UAE. So you’re absolutely right. So for the e-commerce portion of our business right now, the hub is between Delhi, Vietnam, which is Hanoi and the UAE.

Jeff Lee
There’s been a lot of talk about the growth potential of this particular segment, but you know what, what kinds of customers are you working with?

Vijay Arumbakkam
So primarily our customers for the e-commerce business come from China. Via their operations, both in Vietnam and the other surrounding Southeast Asian regions, and these customers typically send goods that are like toys. It could be components of mobile phones primarily related to electronic products. The fast moving items that typically people order from the from their respective e-commerce websites. That’s been the kind of customers we have, I wouldn’t categorise textiles as e-commerce, but again you know we if you look at our operations from Bangladesh, that’s an actual for textile export. So that’s what we see.

Jeff Lee
Now, how have these customers found the A320P2F. I mean it’s such a new aircraft, there’s, you know, literally a handful around the world. How was that process of of first introducing this aircraft type to them? And then, you know, convincing them of its capabilities and and things like that?

Vijay Arumbakkam
We’ve been really pleasantly surprised, Jeff, on this aspect. You know the 320 compared to its competition has a very high level of reliability which our customers like consistency which they’re like and on an average we tend to carry between 18 to 20 tonnes of cargo. So over A5 year five hour range, this aircraft performs really well. We’ve also been impressed with the fuel burn of this aircraft. We’ve just done our statistical analysis for the last four months and you know we’ve been very surprised, of course pleasantly that their fuel burn between actual and planned has been much lesser. So we are learning to use this aircraft type. So one of the things that we have designated is you know for this aircraft is also how do we be the first green cargo service provider because what we can see is there are a number of aspects related to the the Green programme. So yeah, the the the reception from the market and our customers has been very welcoming. They’re very satisfied with this product and I think the transition has been relatively smooth.

Jeff Lee
Interesting and actually thank you for bringing up that green cargo point. I actually see this green cargo decal, I guess or logo on on your next A320 that I see is already painted. And yeah, I did notice this small green logo, a green cargo logo on the side.

Vijay Arumbakkam
Yeah, I mean, we got that thing going because of our analysis. I think we can seriously contribute at least from our side and our perspective with this aircraft in whatever we can for the overall green programme that we have initiated with ST. You know, ST is being very instrumental about using these freighters, narrow body freighters to demonstrate to the world that we can save, you know, a lot of emissions, because a we can find, we can fly point to point, you know, with the cargo that goes on the belly cargo space, it gets loaded and offloaded in so many destinations. So for the same piece or volume of cargo, a direct flight reduces the carbon emissions significantly. But more than that, I think the product itself, the A320P to F like we have shown with less fuel burn you know is a significant you know overall from our side a very significant achievement in a very short space, so I think we can learn more from this as we work on this green carbon or green programme. And then we are also trying internally to have more KPIs we’ve just started working on this. We want to understand how we can measure this, you know very valuable contribution both the product US and ST are making to this environment. So maybe in six months or eight months I could have more comprehensive and compelling statistics for all.

Jeff Lee
So when is this next aircraft or when are you expecting this that next aircraft to join your to join the Fly Vayu fleet?

Vijay Arumbakkam
So this aircraft would be MSN 2164, so it’s currently ready for delivery. We just had a little bit of a delay because of the Chinese New Year Holidays in China, so I I think I’m optimistic by 15th of February. It’ll join the fleet. It it the aircraft is extremely good, it’s completed its test flight. It’s done all its you know tick marks related to the product acceptance, we are just waiting for the final bureaucrats and regulators to complete the process so we can induct the aircraft.

Jeff Lee
Right, I’m sure you, you know, can’t wait for it to to come because you you sounds like you already have the business waiting for it.

Vijay Arumbakkam
Absolutely. Our customers are excited and I think we are excited. So we can’t get, we can’t wait to get our hands on this aircraft. We have already got the crew, we’ve got the infrastructure ready for it. We were just slightly disappointed that we couldn’t take it before the Chinese New Year, but I think we are, we are really looking forward to get this into our fleet as soon as we can.

Jeff Lee
Right. And so that aircraft will be the 4th to join to, you know your overall vaayu group portfolio, that’ll be the 4th one, the second one to join the fly vaayu fleet.

Vijay Arumbakkam
That’s right. Yeah.

Jeff Lee
You were expecting to lease 5 of these, a 320s.

Vijay Arumbakkam
Yes Jeff, our plan is still the you know it’s still the same. So after this we expect to complete our last aircraft with ST and we will open up that subject with them once this aircraft gets delivered. I think between us and ST, we’ve developed a very good partnership. The induction of these aircrafts now have happened in three jurisdictions now. One as you know is in India the second one. Which has gone to Egypt and then the Aircraft three and four, which we have successfully put in the UAE. So yes, we have one more aircraft and we hope to complete that process with St.

Jeff Lee
Yeah. So you really are, you know, having a a monopoly on this specific aircraft that for now, at least on the A320P2F, so and Speaking of India, you also of course you, you announced back in November 2023. That you were acquiring a majority stake in Pradhan Air Express, the young Indian airline. So for you know, for this year what’s the strategy there and how are you kind of having that airline interplay with fly by you.

Vijay Arumbakkam
So we were extremely happy with that acquisition, Jeff. It offers a lot of synergy between Pradhan and Vaayu. You know, having 2 AOCS means that we can work with our customers across the globe where we can build a network that can be shared. So for us that’s a very important aspect of our programme. We also have Mr Nipun Anand, who is the CEO of Pradhan. He’s very well versed with the Indian and the local domestic market as well as the overseas markets because they’ve looked after this business now for three years and we have a very strong relationship with Pradhan to ensure that we share the resources of Vaayu and Pradhan to serve our customers. So for example, that sharing of expertise and resources has already started happening in the livestock segment of our market. Pradhan does almost thirty flights a month to the UAE, uh on the livestock. Umm. And if you, if you see a example of collaboration that aircraft now goes to C check at the end of this month. But our customers both in India and the UAE can still use the services of Fly Vaayu. That is the scale that we need to develop and that’s why we want to have more aircrafts between the both organisations. And so we see that market growing because India and the UAE have a comprehensive economic partnership. Similar to Singapore and one of those aspects, there of those agreements are items related to food security and a livestock perishables and all these things play a very important role. So for Pradhan, UAE is a very important market and for Vaayu India is an important market vice versa. So there’s a great opportunity for us to harness our synergies. For the local market, Pradhan first right now would like to focus with us and enhance this current business partnership that we have and then the intent over this year coming year is to see how best we can also translate some of those processes into serving more domestic customers. We are still at the business plan stage for it, but we are very excited about our partnership and collaboration with Pradhan.

Jeff Lee
Mm hmm. Yeah, I remember seeing that put on aircraft in Dubai at the Dubai Air Show. And one of the the things that they talked about was and I think it you also mentioned this, but yeah, that’s just how how many, was it goats or was it sheep? It had been flying.

Vijay Arumbakkam
Yeah, goats. It’s goats. We have a lot of enquiries for sheep and other types of cattle as well, but for us, for Pradhan Nashik Airport has become our, let’s say our hub. And also you know between Nashik and Rusalkarma is where most of our traffic is. So you are right, yeah. So this is very, very crucial and important for both organisations to grow this particular segment of the market.

Jeff Lee
Right. It’s really, really interesting. Well, so I guess, by by the end of this year, hopefully you’ll have at least, as a group, as the vaayu group, you’ll have received all five of your A320P2FS. Anything else that we can expect or any other changes or additions?

Vijay Arumbakkam
So we are working on that Jeff. Our customers especially from China and the Far East have been very vocal for us to introduce wide body programmes into the mix of our fleet. It is a challenging environment as you know. It’s not that easy today to add aircrafts or induct aircrafts when the ecosystem is under severe strain from the supply supplier OEM relationship. We are doing our best to find alternatives. But as of now, we haven’t found a product that will help us. We are of course quite interested to look at the 330 P to F programme. But again, the assets are very limited. For us to induct, those aircrafts require a lot of regulatory and also personal preparation, especially if you have to bring them under A6. So at some point in time, we will have no choice to do that because that’s how our customers look at us because they want more consistency in terms of the range and the network as well. Yeah. So that’s gonna be a critical success factor. But for the moment, this year, our focus is to complete our narrow body programme and then hopefully we’ll get a chance to review how we can start our wide body programme.

Jeff Lee
Great, great. Well, look forward to seeing these final two joining the fleet and flying. But in the meantime, yeah, you certainly have a a lot of work, good work to to do ahead of you. But thank you so much for your time, Vijay, and we will talk again soon.

Vijay Arumbakkam
Thank you, Jeff for your time and my appreciation to you and the cargo facts team, I know you guys do a stellar job and you cover this segment very well. As a fellow industry professional, I wanted to share or from us from the Vaayu Group shareholders. And I’m sure from other players in the market, our appreciation to you and the rest of your team for doing such a great job.

Jeff Lee
Thank you. Thank you. That’s very kind. Thank you. Appreciate that.

Vijay Arumbakkam
Take care.

Jeff Lee
That was Vaayu Group CEO Vijay Arumbakkam. And that’s all the time we have today. For more coverage of the freighter aircraft and AAM market, visit cargofacts.com. Thank you very much for tuning in, and join us again next time.