Ajay Singh-promoted SpiceJet, which is trying to tap the logistics space that has grown by leaps and bounds thanks to the rise of e-commerce, would be the first scheduled domestic airline to venture into cargo delivery.
The company on Monday announced starting dedicated cargo services from September 18.
The airline may also transport other commodities including medicines, perishable goods, letters, etc.
According to research firm eMarketer, the e-commerce market sales in India may double to $72 billion by 2020. Air cargo traffic in the country is set to grow by around 60 %, show several estimates.
The development comes at a time when almost all the airlines in India are facing financial stress due to rising fuel costs and falling fares. The carriers are now eyeing cargo segment in order to push up the revenue from the ancillary sources. The cargo gets transported in the bellies of the passenger aircraft.
The airline executives said on Monday that SpiceJet would operate the cargo services under the brand name 'SpiceXpress', which would be a separate unit. A Boeing 737-700 plane, having a cargo capacity of 20 tonne, has been taken on operating lease as its first freighter aircraft. "To begin with, the air cargo operations will cover Delhi, Bengaluru, Guwahati, Hong Kong, Kabul and Amritsar," SpiceJet said in a release.
The new aircraft would serve around four to six sectors in a day. The airline would induct a total of four freighter planes this year, and depending on demand, another five or six aircraft can be added next year, the officials added.
According to SpiceJet chairman and managing director Ajay Singh said there is a huge untapped market for air cargo services in India. "Increase in ancillary revenue is important in a scenario where there is a great cost pressure on airlines," Singh said, emphasising that the airline would be a significant player in the logistics space.
The airline honcho said that its belly cargo space will (also) increase as the new (Boeing 737) Max aircraft come into the fleet. SpiceJet's existing fleet has a cargo capacity of about 500 tonne per day. After induction of new freighter planes, the carrier expects to increase its cargo capacity to 27,000 tonne from current 15,000 tonne per month. The airline expects to increase the capacity to around 40,000 tonne per month from next year and eventually take it to 1,00,000 tonne in the next few years.
SpiceJet, which was almost grounded in 2014 due to an intense fare war among the Indian carriers, is diversifying into retail and cargo businesses to cover itself against a similar situation in one of the world's fastest-growing aviation markets.
TONNES OF BUSINESS
- 1,00,000 tonne – Cargo capacity per month SpiceJet is eyeing in the next few years
- 15,000 tonne – Its current capacity per month
- 20 tonne – Cargo capacity of a Boeing 737-700 plane
THE EXPRESS FLIGHT
- To begin with, the air cargo operations will cover Delhi, Bengaluru, Guwahati, Hong Kong, Kabul and Amritsar
- The airline would induct a total of four freighter planes this year and depending on demand, another five or six aircraft can be added next year
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