New Delhi: Where Covid-19 lockdowns and travel restrictions made 2020 the worst year for airlines in terms of loss of revenues, a forced leaning towards cargo operations for a steady revenue stream meant growth in the segment exceeding expectations for aviation industry stakeholders. Consider the following points:
* SpiceJet, which has a dedicated freighter fleet, saw revenues from cargo operations more than double to Rs 564.93 crore during April-September, from Rs 224.85 crore in the same period last year.
* India’s largest airline IndiGo, which is operating less than half of the capacity it was operating with last year, is carrying more cargo than it did at 100 per cent capacity last year.
* IndiGo, among some other airlines, carried previous financial year’s equivalent of cargo volumes in just the last five months.
* Air India’s cargo operations witnessed a five-fold growth in volumes during September, when compared with April this year.
Globally, 2019 was the worst year for air cargo industry since 2009 during the global financial crisis. According to the International Air Transport Association (IATA), the 3.3 per cent annual decline in cargo demand was the steepest drop since 2009. As the Covid-19 pandemic hit, the sharpest ever year-on-year decline of 27.7 per cent in air cargo demand was met with a 42 per cent reduction in capacity. The fall in capacity, which was mainly on account of suspension of passenger flights that carry cargo aircraft bellies, created a demand-supply skew that led to a rise in yields.
A recent research report by ICICI Securities noted that the capacity reduction has resulted in air freight rates increasing by 30-60 per cent on some routes globally, and even in India a rate increase of 7-15 per cent was observed. This forced Indian airlines to relook their cargo strategy as a key revenue stream at a time when passenger operations were largely constricted.
16/11/20 Pranav Mukul/Indian Express
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