Market Research Report : Air Cargo Market in India 2009

Air Cargo ‐
Air Cargo India
July 2009

Executive Summary

 Market valued at INR 64 bn in 2007‐08; Expected to grow at 20% p.a.
 Cargo transported is dominated by pharma, textiles fashion goods, telecom, IT hardware, gems
Market and machinery parts
 50‐60 % of all cargo is transported as belly cargo in domestic airlines
 International operations expected to grow at 12% p.a. while domestic operations expected to
grow at 10% p.a. by 2011‐12

Drivers Challenges
Challenges
– Strong macroeconomic fundamentals – Rising air traffic fuel (ATF) prices
Drivers & – Growth in retail – Growing congestion at airports
Challenges – Development of transportation system – Delays in cargo handling & clearance
– Growth in clearing and forwarding agents

 Changing FDI policy to attract investors
Government  Introduction of the Open Sky policy
Initiatives  Various bi‐lateral agreements
 Large scale investment to develop infrastructural capabilities
Large scale investment to develop infrastructural capabilities

 Many domestic and international players have entered the market in order to capitalize on the
growing opportunities
Competition
Domestic Players Jet Airways Alliance Air Go Air Blue Dart
International Players British Airways World Cargo Cathay Pacific Lufthansa Cargo UPS

AIR CARGO – INDIA .PPT 2

•Introduction
•Market Overview
•Drivers & Challenges
i & Ch ll
•Government Initiatives
•Competition
•Key Developments
Key Developments


Air cargo accounts for a large fraction of goods traded
internationally with India dominating in the sub‐continent

Aviation Industry

Support
Airlines Aerospace
Services

Ground Design and
Design and
Passenger Cargo Training Catering MRO
Handling Manufacture

•International air cargo market is pegged at USD 50 bn (2009)
•Transportation via air accounts for 35% of the value of goods traded India accounts for 1% of
internationally
y an estimated 27 mn
tonnes global air freight
•India has the leading international freight market among countries in market
the sub‐continent


•Introduction
•Market Overview
i & Ch ll
•Competition
•Key Developments
Key Developments


Air cargo traffic in India has been growing due to strong
domestic demand and rising international trade
Overview Market Size and Growth
•Air cargo market is estimated to grow at 20%
p.a. and reach INR 133 bn by 2011‐12 INR bn

•Largely dominated by pharmaceuticals, textiles 150 +20% 133
111
fashion goods, telecom (like mobiles), IT 93
100
hardware, gems and machinery parts which are 64
77
time critical 50
•50‐60 % of all cargo is transported as belly
•50 60 % of all cargo is transported as belly
cargo in domestic airlines 0
2007‐08 08‐09e 09‐10e 10‐11e 11‐12e

Growth Rate of Modes of Transportation Cargo Traffic
‘000 tonnes
Air – Import Cargo 21.5% Domestic
2,000
International 1,736
1,560
Ports (cargo) 12.5% 1,500 1,404
1,280 34%
1,069
1 069 34%
Air cargo observed 979 34%
Railway (freight) 8.2% 1,000 854 36%
the highest growth 34% 35%
34%
Air – Export Cargo 6.7% in the cargo 500 66% 66%
64% 66%
transportation 66% 66% 65%
sector (2007‐08) 0
2001-02 02-03 03-04 04-05 05-06 06-07 07-08


Market is expected to witness growth in the future with large
contributions from the international markets
International Operations Air Trade Partners
•International cargo traffic is expected to grow Others
at a faster rate than the domestic market North America 4%
18% Europe
•Exports outweighed imports by ratio of 1.8:1 33%
in total tonnage
•Europe is the leading international destination
for air cargo
for air cargo 22%
Asia
 Imports: Power generating machinery, 23%
miscellaneous manufactured articles, general West Asia
industry machinery, electrical machinery and
telecommunication equipment Cargo Traffic
 Exports: Apparel, vegetables, fruit, fish, textiles
Domestic
and miscellaneous manufacturing articles
International
 This market is expected to grow at 6% annually till +12%
2025 ‘000 tonnes
+10%
•North American market 2,000 1,822
1,622
1,289 1,445
 Exports substantially outweigh air imports by 3 to 1,151
1 in overall tonnage 1,000 708 780 860
584 643

0
2007‐08 08‐09e 09‐10e 10‐11e 11‐12e


Cargo Terminals: International

Location: Chennai
Overview Cargo Traffic
Established Feb 1, 1978
Feb 1 1978 Export
Area 51877.5 sq. m. Import
‘000 MT
Export Wing 300 +13%
227 218
Covered Area 15257 sq. m. 194
200 146 167
47% 48%
Build up Stations 10 manual 106 119 51%
93 56% 53%
100 59% 57%
59% 53% 52%
3 wide bodied aircrafts with ULD 43% 44% 47% 49%
Cargo Apron Capacity 41% 41%
parking area, hydrant refueling set‐up 0
2001-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09
Import Wing
Import Wing
Covered Area 5684 sq. m. Infrastructure and Developments
Perishable Cargo Facility • 3 airport terminals with one dedicated to cargo
flights; equipped with modern cargo handlers such as
Total Area 445 sq. m. forklifts and power hydraulic pallet trucks.
forklifts and power hydraulic pallet trucks.
o o
Cold Chambers 2, 44 sq. m. each, 0 ‐4 C • A new Integrated Cargo Terminal
o o  This is being planned and is expected to span over 41,655
Examination: 135 sq. m., 12 ‐18 C
sq. m. and Phase 1 has been commissioned
Other Sections Work Station: 89 sq. m.,7 ton capacity
o
Receiving Area: 45 sq. m., 15 18
Receiving Area: 45 sq m 15 ‐18 C
o • Expansion of the airport is expected and is going to
be constructed in Sriperumbudur taluk at an
investment of INR 23.5 bn



Location: Delhi
Established May 1, 1986
May 1, 1986 Export
Area 27 acres Import

Export Wing ‘000 MT
+9%
Covered Area 17, 500 sq. m. 400
272 272 301 297
300 237
Build up Stations 6 mechanized with 24 build up points 197 203
200 167 62% 58% 55% 57%
66% 62%
6 wide bodied aircrafts with ULD 100 69% 70%
Cargo Apron Capacity 45% 43%
parking area and hydrant refueling 31% 30% 34% 38% 38% 42%
0
Import Wing 2001-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09
Covered Area 18,786 sq. m.
Infrastructure and Developments
Disposal Warehouse 12,186 sq. m.
• First semi‐mechanized terminal in India
Import Warehouse 2,700 sq. m.
 Two elevating transfer vehicles (ETV) with 3 level stacker
Perishable Cargo Facility
Perishable Cargo Facility positions (350 slots)
iti (350 l t )
Total Area 1127 sq. m. • Modern cargo handling equipment
o
3, space – 480 cub. m., Temp. – 0 ‐  Cranes, forklifts, high mast stackers, power pallet trucks
Cold Chambers o
4 C , capacity – 12 aircraft pallets • Celebi, a Turkish establishment, has undertaken the
o
Examination Area: 2024 cub. m., 16
Examination Area: 2024 cub m 16 C project for modernization of the airport in order to
project for modernization of the airport in order to
Other Sections o
ETV Corridor: 996 cub. m., 16 C accommodate the growing cargo traffic



Location: Kolkata
Established October 5, 1975
October 5, 1975 Export
Area 9993 sq. m. Import

Export Wing
‘000 MT +7%
Covered Area 2,600 sq. m. 40 39
40 35
30 31
Holding Capacity 258 M.T. 25 26 25 48% 54%
51%
20 63% 61%
Import Wing 64% 65% 64%
49% 53% 46%
36% 35% 36% 37% 39%
Covered Area 7,250 sq. m. 0
2001-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09
Holding Capacity
g p y 725 M.T.
Perishable Cargo Facility Infrastructure and Developments
Total Area 43.8 sq. m. • The facility has an annual holding capacity‐37,120 MT
o o
A – Drug – 1.6 ‐ 2.6 C • 2 parking bays exclusively for freighter fleet
o o
Cold Chambers
Cold Chambers B – Vegetables and fruits – 7.2 8 8
B Vegetables and fruits 7 2 –8.8 C •A t
Automatic loading and unloading of cargo
ti l di d l di f
o o
C – Meat – (‐) 1.5 C – (‐) 11 C  Malaysian, Automated Storage Retrieval System (ASRS) for
Walk‐in‐cooler: space – 62 sq. m. , loading cargo planes
Other Sections o o
temp ‐ 0 ‐ 15 C, capacity – 10 ton  German, Elevated Traffic Vehicle System (ETVS) for
unloading cargo planes
• Modernization of the airport is underway and will
cost INR 16.02 and is to be completed by May 2011



Location: Mumbai
Established 1977 Export
Area 1,08,684.11 sq. m. Import

Export Wing ‘000 MT +10%
Covered Area 25120 sq. m. 373 377
400 327
273 288
Build up Stations 5 300 199 223 233 55% 58%
57%
200 64% 62% 59%
66% 65%
5 wide bodied aircrafts with ULD 100 45% 42%
Cargo Apron Capacity 34% 35% 36% 38% 41% 43%
Parking area & hydrant refueling 0
Import Wing 2001-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09

Covered Area 50,766.87 sq. m.
Infrastructure and Developments
Perishable Cargo Facility
o •Semi‐mechanized terminal in India
1‐4: Capacity 7.2 MT, Temp. 2 C
Cold Chambers
o
5: Capacity 3.6 MT, Temp. (‐)20 C •Divided into 3 modules
o o
6‐9: Capacity 14.4 MT, Temp. 2 ‐10 C  Module 1
Gen. Storage area: Capacity 32.4 MT, – Processing of export general and perishable cargo
Other Sections o o clearance
Temp. 12 ‐18 C
 Module 2 & 3
– Storage & processing of light import cargo and heavy
Storage & processing of light import cargo and heavy
import cargo


Cargo Terminals: Domestic

Owned & operated by AAI

Cold Storage Volume of Cargo (in MT)
Airport Commissioned Area
Facility 2006‐07 2007‐08 2008‐09
Nagpur 1997 1800 sq. m. No 190 371 472
2 rooms for Export / Import
Guwahati September 1999 No 98 20 7
cargo. 2 rooms for customs staff
June 2000
June 2000
Lucknow 4 rooms admeasuring 150 sq. m. Yes 224 242 81

Coimbatore December 2001 878 sq. m. Yes 3198 3476 3280
Amritsar 2007 2304 sq. m. Yes NA 579 1058
Indore 2007 322 sq. m.
322 sq m No NA 884 1566

AAI plans on developing a cargo terminal in Patna, located outside the airport, which will span 1.5 acres through a
joint venture with Bihar Industrial Area Development Authority


Cargo Terminals: Domestic

Owned & Operated by State Government Undertaking Owned & Operated by Others
Airport Area Operator Airport Operator
Ahmedabad 3000 GSEC Goa Central Warehousing Corporation
Rajasthan Small Industries Cochin NA
Jaipur 724
Corporation
Srinagar Indian Airlines
Varanasi 8800 UP State Export Corporation
Jammu Indian Airlines
Maharashtra State
Pune 799 Bangalore International Airport
Bangalore International Airport
Agricultural Marketing Board Bangalore
Limited
JV: Kerala State Industrial
Calicut NA Hyderabad International Airport
Enterprises & Export Trml Hyderabad
Limited
State Warehousing
Kanpur NA Amritsar Central Warehousing Corporation
Central Warehousing Corporation
Corporation
C i
Andhra Pradesh State
Vishakapatnam NA
Trading Corporation
Bhubaneshwar NA Customs
Kerala State Industrial
Trivandrum NA
Enterprises
Port Blair NA NA


•Introduction
•Market Overview
i & Ch ll
•Competition
•Key Developments
Key Developments


Drivers and challenges

Challenges
Drivers
Di Rising Air Traffic Fuel (ATF) Prices

Strong Macroeconomic Fundamentals
Growing Congestion at Airports

Growth in Retail
Delays in Cargo Handling & Clearance
Development of Transportation
System
Growth in Clearing and Forwarding
Agents


Strong macroeconomic fundamentals driving the demand for air
cargo services
Strong macroeconomic fundamentals Impact
• Economic growth has increased purchasing power significantly across all consumer groups,
creating one of the largest consumer groups globally
EXIM trade Industrial Production Index

Base: 1993‐94 = 100
INR bn
400
00 Basic Goods
8,000
Export Capital Goods

Import Consumer Goods
6,000 300 Intermediate Goods
IPI

4,000
200

2,000
100
0
2001 2002 2003 2004 2005 2006 2007 2008 2001 2002 2003 2004 2005 2006 2007 2008


Growth in organized retail coupled with the entry of large
retailers is a major driver for the market
Growth in retail Impact
• In order to support the large scale domestic demand for retail products, the international and
domestic freight market is expected to grow strongly
• A substantial share of organized retail is transported as air freight which is estimated to increase
with the entry of retail giants like Wal‐Mart, Carrefour, Reliance in the organized retail sector is
expected to boost this segment
• The retail sector is expected to grow at 10% p.a. and reach USD 833 bn by 2011
•L l f i
Level of investment, by 2012, is expected to reach USD 22 bn
b 2012 i d h USD 22 b
• Organized retail, which is accounts for ~ 8% of the whole, is expected to grow to USD 64 billion
by 2015

Total Retail Market Share of Organized Retail
USD bn
1,000 +10% % Growth of
833 organized retail is a
800 750 20
680 direct driver for air
620 cargo
600 511 562 15

400 10

200 5

0 0
2008 2009 2010 2011 2012 2013 2004 2005 2006 2007 2008 2009 2010


Improvement in the transportation network will support the
growing air cargo industry
Development of transportation system Impact
Golden Quadrilateral and NSEW Road Corridor Dedicate Freight Corridors ‐ Route Map

• As part of road infrastructure development: • Government has proposed two dedicated rail
 Six‐laning of Golden Quadrilateral and select national freight corridors along the west and east towards
highways
g y which private sector participation is being sought
which private sector participation is being sought
 Four‐laning on North South East West (NSEW) corridors after
 Four‐laning 20, 000 km of National Highways • This is expected to be beneficial for air cargo
• Roads are crucial for the development of air cargo segment as delays at port facilities, custom
industry as it faster transportation of goods to the clearance will be reduced as goods can be
designated airport from where it is exported across transported easily to an ICD/CFS
p y /
the globe or to another domestic destination


Clearing and forwarding agents have made the transportation
process highly efficient and cost effective
Growth in clearing and forwarding agents Impact
• Emergence of clearing agents or freight forwarders has made the process of air transportation
extremely efficient leading to direct costs benefits for players in the industry
• Clearing and forwarding agents fulfill the legal formalities of transportation and as act as a
consolidator of shipments
• The freight forwarders deliver most of air cargo shipments to airlines in consolidated bundles
 A freight forwarder acts as a customer and sales partner of the airlines
 The freight forwarders specialize in routing shipments on scheduled flights even while
organizing chartered flights for shippers
– The freight forwarder organizes all‐cargo charter flights
• The integrators offer door‐to‐door services to shippers
– An integrator controls the sales channels and the transportation processes


Rising prices of fuel, which accounts for a large fraction of the
cost, is a major barrier in the market
Air Traffic Fuel (ATF) prices Impact
• ATF accounts for ~ 45% of the operational costs of carriers
• Rise in fuel prices has led to large scale losses for companies in aviation sector
Volatility in crude oil prices
Fuel prices are
USD/barrel
+10% expected to see an
150 126 surge in 2009
‐52% (Source: Platts,
100
58 64 +97% 60 Bloomberg)
Bl b )
38 50
50
0
2004 2005 2006 2007 2008 2009
• Multiple taxation by the Government leads to escalation in fuel prices
Central Government State Government Total Government Levies
Levies local sales tax
Levies excise duty of 8% Escalates cost by 35%
ranging from 4‐39%
• Price of ATF in India is 60‐70% higher than international benchmark
 Import duty for ATF is 20%
INR/Kl
ATF price comparison – Mar ‘07
40,000 36,100
21,272 20,779 20,874 21,700
20,000

0
Bangkok Singapore Kuala Lumpur Sharjah India


Congestion at airports has made air cargo transportation
inefficient
Growing Congestion at airports Impact
• High growth in passenger traffic is creating a pressure on freight traffic

Domestic Passenger Traffic
International Passenger Traffic
mn
200 +16%
151
150 +20%
126
105
100 87
73
61 54
40 46
50 30 35
26

0
2006‐07 07‐08 08‐09 09‐10 10‐11 11‐12

• Furthermore, this has led to large cost escalations due to the large quantities of fuel wasted as
airplanes are unable to land due to the unavailability of a landing slot
i l bl t l d d t th il bilit f l di l t
 An additional half an hour of hovering can consume between 25‐30% extra fuel which is tantamount to
approximately ~ INR 1,00,000/hr
• Delhi and Mumbai airports are the extremely congested due to high growth in traffic levels


Infrastructural shortcomings have led to delays in cargo handling
and clearance leading to cost escalations
Delays in cargo handling & clearance Impact
• Issues with respect to cargo handling and clearance have direct cost implications for the
companies in the market
• Air Cargo clearance:
 Singapore, Hong Kong and Dubai: 2 hours
 India: Physical check‐up alone takes approximately about 12 hours
• Dwell time for import and export cargo at Indian airports is between 3‐7 days which compares
poorly with respect to foreign markets
poorly with respect to foreign markets
 Singapore: Dwell time for imported cargo in Singapore is 12 hrs
 Sharjah airport: Dwell time for export cargo is 4 hrs
• The government has been playing a role towards curtailing these shortcomings
 Import cargo: Free time has been reduced to 72 hrs from five 5
Import cargo: Free time has been reduced to 72 hrs from five 5


•Introduction
•Market Overview
i & Ch ll
•Competition
•Key Developments
Key Developments


Government has taken various measures towards developing
this segment by introducing major changes in the FDI policy
Sector Policy
Cargo and Non‐
• Hiked to 74% FDI from the initial permissible rate of 49%
scheduled Airlines

Greenfield Airports • FDI up to 100 % is permitted through automatic approvals
FDI Policy • FDI up to 74 % is permitted through automatic approvals and up
Existing Airports
to 100% with special permission from FIPB
• 49% FDI is allowed in domestic airlines under the automatic
route (but not by foreign airline companies)
Domestic Airlines
• 100% equity ownership by Non‐Resident Indians (NRIs) is
permissible
• 100% FDI in maintenance, repair and overhaul (MRO)
organizations, flying training institutes (FTIs) and helicopter
Others services
• 100% tax exemption for airport projects for a period of 10 years
in order to attract investors

In order to develop the air cargo market, major emphasis has fallen on attracting large scale FDI’s which the
Government plans on achieving by implementing policies towards liberalization


Open Sky policy forwarded by the government coupled with the
various bi‐lateral agreements has helped to develop the market

• The Government introduced the “Open Sky” policy for cargo in April 1990
• Under this policy, any foreign airlines or association of exporters can bring freighters to
Open Sky
O Sk the country for cargo shipment
h f hi
Policy • The "Open Sky" policy of the government and rapid air traffic growth had a triple effect
 Several new privately owned airlines have entered the market
 The frequency and flights of international airlines has increased rapidly
 Wider air connectivity
y
• In order to maintain market competition the government has adopted a policy where
market forces determine cargo tariff, with IATA rates as the floor rate

• In order to allow for greater connectivity between India and their trading partners across
the globe, the Government entered into various bi‐lateral agreements
Bi‐lateral • Traffic rights were enhanced with 17 countries in 2008
Agreements • Significant changes came about in Air Services with Japan, China, Chile, Mexico, UAE
• India entering the WTO coupled with the signing of several ASEAN Free Trade Agreement
will increase foreign trade, which in turn will drive demand for logistics industry upwards


Government has planned various projects for the development
of airport infrastructure on a pan‐India basis

• An additional 46 airports are expected to be operational airports by 2020, through large
scale private investment
• Contracted Larsen & Toubro (L&T) to build a new integrated terminal at Mumbai at an
Expansion plans
Expansion plans
investment of USD 1.36 bn expected to be operational by 2012
• Plan on developing Nagpur as a cargo hub through large scale investments in
infrastructure

• Mumbai and Delhi airports, which have been privatized, is expected to be upgraded at an
estimated investment of USD 4 bn over 2006‐16
Up gradation • By 2011, 35 other airports are expected to be upgraded through a public‐private
plans partnership (PPP) at an investment of USD 357 mn
• AAI plans on investing a total sum of USD 3 07 bn towards upgrading airports and
AAI plans on investing a total sum of USD 3.07 bn towards upgrading airports and
modernizing the existing aeronautical facilities across India
• 43% of the amount being reserved for Kolkata, Chennai and Trivandrum

• Government has planned an investment of ~ USD 9 bn inorder to develop 10 greenfield
airports under the 11th Plan period (2007‐12)
airports under the 11th Plan period (2007‐12)
Greenfield • Private sector is expected to contribute ~ USD 5.92 bn
Airports • AAI is expected to invest USD 2.96 bn
• Bangalore facility is operational while the facility at Hyderabad is expected to be
operational soon
• In Navi Mumbai, the second greenfield airport is expected to be developed via PPP at a
total cost of USD 2.5 bn


•Introduction
•Market Overview
i & Ch ll
•Competition
•Key Developments
Key Developments


Domestic Players (1/10)

Company Snapshot: Air Sahara / Jet Lite
Corporate Information Financial Performance
Headquarters New Delhi
New Delhi
Revenue Revenue Profit
Founded 1991 INR mn Profit / Loss INR mn
Fleet Size 25 30,000 0 0
Parent Jet Airways 20,617 20,153
20,000
20 000 ‐2 000
2,000
15,055
15 055
Subsidiaries N.A.
Key People •Mr.Subrata Roy (Founder) 10,000 ‐4,000
•Mr. Naresh Goyal (Owner, Jet Airways)
•Mr. Gary Kingshott (CEO) 0 ‐6,000
2005‐06 06‐07 07‐08
Business Highlights Operational Performance
• It expanded its operations by introducing new daily Average Weight Load Factor
flights between Delhi‐Srinagar via Jammu and Tonnes/day Cargo Carried %
Mumbai‐Srinagar
g 70
61 56
80
60 54 53
• Plans on introducing flights between Dubai‐Nagpur as 50
48 60
Nagpur is expected to become a major logistic hub in 40
27 40
India 30 28

• Cargo carried ranges from carriage of various 20 20
10
perishables, household pets, life saving drugs,
0 0
valuables and general goods 2001‐02 02‐03 03‐04 04‐05 05‐06 06‐07 07‐08



Company Snapshot: Alliance Air
Headquarters Mumbai Revenue Revenue
R Profit
INR mn Profit / Loss INR mn
Founded 1996
8,000 0 0
Fleet Size 20 6,536
6,000 5,533 ‐200
Parent Indian Airlines
3,803
3 803 400
‐400
Subsidiaries N.A. 4,000 3,034
‐600
Key People •Mr. A.K. Goyal (MD) 2,000 ‐800
0 ‐1,000
2004‐05 05‐06 06‐07 07‐08
•Strong focus on the North East region Average Weight Load Factor
Tonnes/day Cargo Carried %
•Expanded its network by encompassing 25 24 25
80
Chennai and Visakhapatnam
Ch i d Vi kh 20
60
15
15
40
10
20
5

0 0
2005‐06 06‐07 07‐08



Company Snapshot: Go Air
R Profit
fi
Founded June 2004 INR mn Profit / Loss INR mn

Fleet Size 7 6,000 5,099 0 0

Parent Wadia Group 4,000 3,483 ‐1,000
Subsidiaries N.A.
2,000 ‐2,000
Key People •Mr. Edgardo Badiali (CEO) 384
•Mr. Jeh Wadia (Managing Director) 0 ‐3,000
•Mr. GP Gupta (CFO) 2005‐06 06‐07 07‐08
• Inducted two A320 (Mar 2009) to their fleet towards Average Weight Load Factor
tapping in to the penetrate the Southern and Tonnes/day Cargo Carried %
Northern Indian market while focussing on major
g j 10 9 80
8
destinations such as Amritsar, Bangalore and 8
60
Chandigarh 6
40
• Expanded its network by initiating flights to 4
Guwahati and Bagdogra from May 2009 20
2 1
• Plans to scale up its fleet by 25 aircrafts in 2009 and
0 0
another 10 by 2011 2005‐06 06‐07 07‐08



Company Snapshot: Jet Airways
Headquarters Mumbai Revenue
R Profit
P fi
Revenue
Founded May 5, 1993 INR mn INR mn
Profit
Fleet Size 87 160,000 10,000
130,779
Parent Tail Winds Limited 120,000
94,815 0 0
Subsidiaries Jetlite and Jet Cargo 80,000 70,578
56,961
‐10,000
Key People •Naresh Goyal (Founder and Chairman) 40,000
•Carl Saldanha (CFO)
•Wolfgang Prock‐Schauer ( CEO) 0 ‐20,000
2005‐06 06‐07 07‐08 08‐09
• Plans on developing an independent air cargo unit at Average Weight Load Factor
an investment of USD 15 mn Tonnes/day Cargo Carried %
400 385 80
• It has interline agreements with 64 carriers for
It has interline agreements with 64 carriers for 318 313
carriage of cargo to their destinations 300 271 60
• Major network expansions in 2009 201
200 154 170 40
• Domestic: Mumbai with Rajkot and Bengaluru; Delhi to
Indore and Bhopal; Kolkata to Jorhat, Agartala,and 100 20
Guwahati; Guwahati – Agartala; New Delhi to Srinagar
0 0
• International: Dubai to Chennai; Mumbai to Kuwait
2001‐02 02‐03 03‐04 04‐05 05‐06 06‐07 07‐08



Company Snapshot: Kingfisher Airlines
Headquarters Bangalore Revenue
R
Revenue Profit
Founded 9 May 2005 INR mn Profit INR mn
Fleet Size 86 30,000 26,875 0 0
Parent United Breweries Group
20,000
15,085
15 085
Subsidiaries Kingfisher Red ‐5,000
Key People •Dr. Vijay Mallya (Chairman & CEO) 10,000
4,250
•Mr. A. Raghunathan (CFO)
•Mr. N. Srivatsa (Company Secretary) 0 ‐10,000
2005‐06 06‐07 07‐08
• Augmented its cargo services with the development Average Weight Load Factor
of a dedicated cargo warehouse facility in Goa Tonnes/day Cargo Carried %
99
• Tied up with IBS to implement its `iCargoNet' solution
Tied up with IBS to implement its iCargoNet solution 100 80

with which to manage its cargo business including 80
60
 Planning and Sales 60 55
40
 Ground handling 40
 Unit load device management as 14 20
20
 Cargo revenue accounting and revenue optimization
0 0
functions
2005‐06 06‐07 07‐08



Company Snapshot: Blue Dart Express Ltd.
R Profit
INR mn INR mn
Founded 1983 Profit / Loss 9,825
10,000 8,118 800
Fleet Size 7
8,000 6,698 600
Parent DHL Group 6,000 4,227
400
Subsidiaries Blue Dart Aviation 4,000
Key People •Mr. Sharad Upasani (Chairman ) 2,000 200
•Mr. Anil Khanna  (MD) 0 0
•Mr. Malcolm Monteiro (Director) 2005 (Apr‐ 2006 2007 2008
Dec)
Business Highlights
• Introduced an innovative packaging solution – Express Pallet – for shipments ranging from  50‐100 kgs
 Express Pallet is a unique, weather‐resistant, safe, secure and affordable door‐to‐door packaging solution
• Invested USD 25 mn in order to develop one‐of‐a‐kind integrated terminal at the Bengaluru International Airport
Invested USD 25 mn in order to develop one‐of‐a‐kind integrated terminal at the Bengaluru International Airport
which has helped the company synergize the domestic and international express operations in South India
• Offers a domestic air payload of 300 tonnes/day
• Introduced  ‐ Dart Apex 1200 ‐ a door‐to‐door delivery service for domestic shipments of 10 kgs and above
• Plans on investing INR 1 bn in 2009 towards developing its infrastructural capabilities
Plans on investing INR 1 bn in 2009 towards developing its infrastructural capabilities
• Plans on developing 58 warehouses across India by 2010 for efficient movement of cargo



Company Snapshot: Indigo Airlines
Headquarters Gurgaon
Founded 2005
Op. Revenue 2,162.8
Fleet Size 20
Parent Interglobe Enterprises Op. Expenses 3,904.2
Subsidiaries N.A.
Profit/ Loss ‐1,741.3
Key People •Mr. Aditya Ghosh (President)
•Mr. Riyaz Peermohammed (CFO)

Business Highlights
• Operates flights out of 17 destinations
• Constantly expanding their frequency of flights across locations
 In Apr 2009 introduced 3 new daily flights from Mumbai to Goa Hyderabad and Kolkata
In Apr 2009, introduced 3 new daily flights from Mumbai to Goa, Hyderabad and Kolkata
 Added an Airbus A320 to its fleet to develop the Kolkata‐Guwahati and Bangalore‐Chennai sector
• Plans on expanding its network route by launching flights from Patna to Bangalore, Mumbai, Lucknow, Kolkata, and
New Delhi
• Carried 3 tonnes of cargo/day in 2006‐07
Carried 3 tonnes of cargo/day in 2006 07



Company Snapshot: Paramount Airways
Headquarters Chennai Revenue Profit
INR mn Revenue INR mn
Founded 2005 Profit / Loss
4,000 400
Fleet Size 5 2,550 2,680
200
Parent Paramount Airways
Paramount Airways
2,000
Subsidiaries N.A. 0 0
Key People Mr. Thiagarajan (CEO) 144
0 ‐200
2005‐06
2005 06 06‐07
06 07 07‐08
07 08
Business Highlights
• Began operations in Feb, 2009 with Chennai as its hub
• Network coverage includes Chennai, Kolkata, Coimbatore, Madurai, Bangalore, Hyderabad, Thiruvananthapuram,
Kochi, Vizag, Tiruchirapalli, Ahmedabad, Goa and Pune
Kochi Vizag Tiruchirapalli Ahmedabad Goa and Pune
• Its freight service has an overall capacity of 100 tonnes/ day and is expected to reach 300 tonnes/day by 2010
• This business venture is expected to contribute 10‐15% of the overall revenue
• It signed an MOU to buy 10 A321 aircraft, as it offers a containerized cargo system, in order to foray into the
international market by providing services from south India
international market by providing services from south India
• Provides door‐to‐door cargo services; Cargo division focussing on medical, horticulture and aqua culture goods



Company Snapshot: Spice Jet
Headquarters New Delhi
New Delhi Revenue Revenue Profit
fi
Founded May 2005 INR mn Profit / Loss INR mn
Fleet Size 19 15,000 12,949 0 0

Parent Spice Jet ‐500
10,000 ,
7,574
Subsidiaries N.A. ‐1,000
5,000 3,419
Key People • Mr. Siddhant Sharma – Chairman and CEO ‐1,500
• Mr Peter Hill (COO) 0 ‐2,000
• Mr Gary Osborne (CFO) 2005‐06 06‐07 07‐08

Business Highlights
• Launched their cargo operations in May 2008; currently operates from 13 stations
• By 2009, they plan on generating 3% of their revenues from the cargo business
• Currently carries an average of 85 tonnes/ day while target capacity stands at 110 tonnes/ day
Currently carries an average of 85 tonnes/ day while target capacity stands at 110 tonnes/ day
• Added Goa to their existing network of domestic cargo operations
• Automated their business by adopting new‐generation cargo management system iCargoLite allowing them to
integrate management of cargo reservations and ground operations including flight planning inbound cargo
operations, billing and shipment tracking
operations billing and shipment tracking
• Plans to set up hanger facility by investing INR 150 mn; Plans to begin cargo operations from Guwahati & Bagdogra



Company Snapshot: Deccan 360
Corporate Information Business Highlights
Headquarters
H d t Bangalore
B l • Service based on a hub‐and‐spoke model with
Service based on a hub and spoke model with
Nagpur, Hyderabad and Delhi serving as hubs
Founded May 8, 2009
• Signed a MOU with the GMR Group for setting up
Fleet Size 11 express cargo operations at Delhi and Hyderabad
Key People • Capt. GR Gopinath (Founder) • Revenues expected to hit USD 450 mn by 2014
• Mr. Jude Fonseka – CEO • Plans to begin international operations connecting
• Mr D.P. Hemanth (COO)
India with the Middle‐East and South‐East Asia
• Mr G.K. Raman (CFO)
Recent Players
Player Business Highlights
• Hyderabad‐based air cargo company invested USD 945 mn in order to purchase four Boeing
Flyington 777‐200 freighter aircraft to expand operations
Freighters
• Plans` to carry out cargo operations to China, the Middle East, the US and Europe
y g p , , p
Aryan Cargo
• New Delhi‐based company plans to enter the market looking at the strong opportunities
Express
• Forayed into the air cargo space with flights to Mumbai, Delhi and Chennai
First Flight Couriers • Invest INR 1 bn in 2008 to set up an integrated logistics services division offering warehousing,
g Invest INR 1 bn in 2008 to set up an integrated logistics services division offering warehousing,
inventory management, supply chain and distribution services


International Players (1/2)

British Airways • Its network encompasses Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai,
World Cargo Pune and Cochin
•FFocusing sector specific cargo handling
i ifi h dli
 New Delhi: Readymade garments, handicrafts and couriers
 Mumbai: Gems and jewellery, light engineering, pharmaceuticals, chemicals, hazardous goods and
heavy project engineering goods
 Kolkata: Light engineering goods, leather products, exotic Kalimpong flowers and mica

Cathay Pacific • It operates through offices in Mumbai, Delhi, Chennai and Bangalore along with group company
Dragonair
• It operates on the Delhi‐Hong Kong sector twice a day, and 10 flights a week from Mumbai to
Hong Kong
Hong Kong
• Partnered with NIIT for IT solutions for cargo ground handling operations in the Bangalore
International Airport
Etihad Crystal • Currently operates in Cochin, Trivandrum, Mumbai and New Delhi
Cargo • Expanding their network by adding daily flights to Chennai and Kozhikode
p g y g y g
• Plans on securing traffic rights to Ahmedebad, Amritsar, Hyderabad and Bangalore


International Players (1/2)

Lufthansa Cargo • Plans on expanding their operations in India through partnerships with leading domestic
players
•BBegan new flights to Hyderabad as it allows the company to enhance their position in India as
fli h H d b d i ll h h h i i i i I di
well as cater to South East Asia and Middle East, Europe and USA. This has made them the first
airline to offer a freighter service to the south Indian metropolis
• Planning to enter a partnership with China’s Jade Airlines to transport cargo from China to India
• Signed a 10 year contract with Deccan to organize their cargo fleet as well as warehousing and
g y g g g
MRO (maintenance, repair and overhaul) services
UPS • Set up an operational facility at the cargo terminal of Indira Gandhi International Airport in New
Delhi
• Launched a special shipping programme, UPS Express Saver Service from India to various
destinations across the world
d ti ti th ld
• Tied up with AFL to provide extensive logistics services including branding and enhancing reach
Other Major Players : Malaysia Airlines Cargo, Alitalia, Atlas Air, Cargolux, Emirates SkyCargo, Great Wall Airlines
(China), Korean Air, Polar Air Cargo, Qatar Airways Cargo, Singapore Airlines Cargo


•Introduction
•Market Overview
i & Ch ll
•Competition
•Key Developments
Key Developments


Key Developments

Date Development
June 2009 Gujarat Agro Industries Corporation plans on commissioning an air cargo complex at Sardar Vallabhbhai
Patel International Airport in Ahmedabad in the next 6 months. This plan has been forwarded in order to
develop exports of perishable agro products to Gulf countries and European markets. An investment of
d l t f i h bl d t t G lf ti dE k t A i t t f
INR 70 mn is expected.
June 2009 The old airport complex in visakhapatnam is expected to be converted into an air cargo complex at an
investment of INR 950 mn.
June 2009
J 2009 Boeing has forecasted that the air cargo business to grow at an average annual rate of 5.4 per cent
B i h f t d th t th i b i t t l t f54 t
between 2009 and 2028.
May 2009 DECCAN 360 plans on hiring 5000 staff by 2012‐13 in order to develop its nascent air cargo operations.
Mar 2009 A Centre for Perishable Cargo (CPC) was developed at the air cargo complex of the Cochin International
Airport Ltd (CIAL) to improve the export of perishable cargo. The centre is equipped with several facilities
Airport Ltd (CIAL) to improve the export of perishable cargo The centre is equipped with several facilities
such as temperature and humidity control, apart from three cold storages with a capacity of 30 tonnages
Dec 2008 The cargo airport in Gwalior has been approved and is expected to be developed at an investment of INR
8‐10 bn.


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Market Research Report : Air Cargo Market in India 2009

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Market Research Report : Air Cargo Market in India 2009