Thursday, June 13, 2019

Air freight demand may touch 1.1 million tonnes by 2025: Report

Mumbai: The domestic air freight demand is expected to touch 1.1 million tonne by the fiscal 2025 at a compounded annual growth rate (CAGR) of 7-9 per cent propelled by rapidly growing e-commerce activity, increasing capacity and improving airline connectivity to smaller cities, according to a research note.

However, cargo capacity of airlines is expected to grow at a higher CAGR of 13-15 per cent, given the impending fleet expansions. This will further shift the market towards airlines, ratings agency Crisil said on Thursday.

The estimated Rs 600-700 crore domestic dedicated air freighter market stood at 0.8 million in 2019, logging a CAGR of 8 per cent in the last five fiscals, it said.

Ironically, the domestic dedicated freighters fleet currently stands at just seven planes compared with about 680 passenger aircraft, including of the grounded carrier Jet Airways, it said.

In comparison, as per Boeing data, the global freighter fleet stood at 1,870 aircraft as of 2017, compared with a commercial fleet of 24,400 aircraft.

According to Crisil, shorter lead distances compared with global freighters, lack of significant niche cargo, and intense competition from airlines which also carry cargo in aircraft belly are expected to continue restricting growth of domestic dedicated freighters.

In terms of revenue per tonne kilometre, dedicated freighters have just about 15 per cent share of the domestic air freight market, compared with 50-55 per cent globally.

This is because while their global peers move cargo across countries/ continents, those in India operate on shorter distances and lead times, leading to competition from other modes of transport, it added.
13/06/19 PTI/Business Line
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