Indian Airlines to hive off cargo arm
Hive-off to take place after the merger between Indian Airlines and Air-India.
The proposed cargo operations of state-run Indian Airlines will be hived off into a separate company after the merger between Indian Airlines and Air-India.
The cargo operations, which are being finalised, will operate as a division of Indian Airlines in the interim.
“We are finalising the cargo plans. They will be taken to the board soon,” said an Indian Airlines executive. The government had approved in principle Indian Airlines’ plans to set up the cargo operations.
As a start, Indian Airlines will convert five Boeing 737 aircraft into freighter aircraft. The five aircraft are now flown by Indian Airlines’ subsidiary, Alliance Air. Indian Airlines executives said the process of converting the passenger aircraft into freighters would start soon and it had floated an international tender for this.
Cargo carriers are handling goods worth about Rs 25,000 crore in India now and the market is growing at about 20 per cent a year. Seeing the huge potential, a number of carriers like Jet Airways, Kingfisher and non-airline companies are also planing to start cargo airlines.
The cargo market in India is expected to see huge growth due to the boom in the retail sector, since retail companies are expected to use cargo airlines for faster transport of goods across the country.
Indian Airlines has been seeing a significant growth in its cargo operations over the last few years. For example, in 2003-04 and 2004-05 the airline saw its cargo revenues growing at about 18 per cent a year.
Similarly Air-India is also expanding its cargo operations in phases over the next two years. It is planning to dry-lease up to three Airbus A310 dedicated freighters and one Boeing 747-400 dedicated freight aircraft.
Besides, Air-India was also planing to convert its older A310 passenger aircraft into aircraft for freight services, a civil aviation ministry official said.
It has also been decided that Air-India will operate dedicated freighters on key cargo routes to Europe, the US, Japan, Singapore and China.
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