India's GATI Dumps Freighters

Not too long ago, GATI was part of of India’s top few logistics majors. Now while the company is still a respected major force here, as the global downturn also affects the Indian economy, GATI has started shedding weight. In what could be termed as a dramatic turn of events, GATI recently said in a rather cut-and-dry memo that it had terminated its wet lease of five Boeing 737-200 cargo freighters from Air India.
Consequently, those same freighters leased by Air India have also been withdrawn with immediate effect.
“Our strategic alliance with Air India is being continued as usual without affecting air cargo movement business,” GATI said in a statement. For background, GATI had signed a joint venture pact with Air India Cargo to take on domestic aviation cargo major Blue Dart Express, owned by DHL India, a unit of the German postal services giant Deutsche Post. The GATI-Air India first flight took off on November 14, 2007 on the Delhi-Mumbai-Bangalore-Delhi sector. The agreement with Air India barely lasted for a year. Industry experts told Air Cargo News FlyingTypers that GATI had been finding it very tough to maintain loads.
GATI’s last financial results, released in December 2008, showed that its air freighter business was bleeding the company. In the half year that ended in December 2008 results showed that the logistics major had lost Rs 16 crore on the air freighter business.
“It was all due to the load factor coupled with the recessionary trend,” a source said.
“The company sought to take preventive action by shifting surface cargo to air.
“That, however, did not contribute to the organic growth of the air cargo business.
“At that time, the management had said that it was taking “remedial action”—in other words, they were getting out of the business.”
Industry pundits maintain that GATI’s decision to enter the air cargo business was ill-timed.
06/04/09 Air Cargo News

To Read the News in full at Source, Click the Headline

Categories: Cargo Apr 2009