India’s air cargo market is proving a lucrative bet for freighter operators and other supply chain stakeholders as volumes rebound after COVID-19. According to new data from the Airport Authority of India (AAI), shipments in and out of Indian airports were up 7% year on year, to 3.4m tons in the fiscal year 2023-24 which was completed in March. Countrywide volumes hit an all-time high in March, to some 330,000 tons, up from 293,000 tons in February.
Even more significantly, international loads at Indian airports spiked 10%, year on year, the e-commerce boom driving the expansion alongside export/import gains from new digital manufacturing verticals. Data shows a steady turnaround for the Indian air cargo industry, recovering from the downturn in fiscal 2020-21 when cargo volumes slumped to 2.47m tons from a pre-Covid high of 3.56m tons reported for 2018-19.
Industry optimism has also been increased by the government embarking on a program to expand air cargo volumes to 10m tons by 2030, powered by large-scale infrastructure development and export policy reforms. Airlines out of India have positioned themselves to capitalize on the opportunity, and the largest domestic carrier, IndiGo, is devising new business strategies for its Cargo arm.
Recently the low-cost airline inked a deal to obtain 30 wide-body A350s, which it claimed would significantly enhance its ability to handle palletized cargo. Cargo International CCO Mark Sutch says that, since they Have successfully built a 350,000-tonne-a-year business on an essentially all-narrowbody fleet, will presently enter a new stage of cargo development and growth. He also added that the cargo-handling prowess boost would help India develop as a transshipment hub, as volumes grew.
According to Mr. Sutch, the growth in international volumes out of India was, in some part, driven by the Red Sea crisis and the resulting shift from ocean to air, which, he noted, brought more benefits to carriers with a reach to Europe and the US. IndiGo already has three dedicated freighters, with a fourth expected to join its cargo fleet this year. The latest order sees deliveries scheduled to begin from 2027 and builds on the fleet expansion which was revealed last June covering 500 Airbus aircraft.
Vineet Malhotra, co-founder and director of Mumbai-based Kale Logistics Solutions, said that the air cargo spike had been more pronounced on the India-Europe corridor, which he said had witnessed an amazing 40% increase this year.Tata Group-owned Air India is also in the midst of a massive makeover, increasing competition in the buoyant aviation market. In addition to fleet upgrades, recently Air India set up a code-share arrangement with the largest Japanese carrier, which is known as All Nippon Airways.
Additionally, Tata’s recent diversification into electronics manufacturing for Apple iPhones and semiconductor chips adds another layer of potential cargo opportunities for the carrier in the long term. In the meantime, Indian apparel exporters are voicing growing concern over air freight capacity problems at Delhi Air Cargo, a consequence of Bangladesh transshipment flows through the airport via a government-to-government cross-border trade arrangement.
In the year since this bilateral deal kicked in, Delhi Airport has handled some 8,000 tons of Bangladesh ready-made garment (RMG) cargo. Given the consequences at the expense of local trade growth, Indian industry groups are stressing the government to reconsider this proactive trade facilitation.
