DELHI- Tata-owned Air India Group (AI) is streamlining its cargo operations across its four airlines, potentially leading to the creation of a separate entity with dedicated freighters.
This strategic move aims to capitalize on India’s expanding air cargo market, driven by economic growth and increased trade activity.
Air India Cargo Plans
A senior Air India official, speaking anonymously with ET, revealed, “We have been consolidating and streamlining the entire network from all four airlines, to bring it to one function.” This consolidation is part of a broader restructuring effort within the Tata-owned carrier group.
Currently, IndiGo (6E), runs a dedicated CarGo fleet comprised of three Airbus A321-200F aircraft under its roof. While SpiceJet runs a SpiceXpress with three Boeing 737-700F aircraft. Both IndiGo and SpiceJet also utilize belly space available on their passenger aircraft.
The Tata-owned carrier is developing comprehensive software to manage cargo requests, revenue, and commercial aspects.
The airline is expanding its global distribution network and onboarding new customers. This restructuring is part of Tata Group’s broader strategy to consolidate its airline business following the 2022 acquisition of Air India.
Air India plans to add dedicated freighters to meet growing cargo demand. An official revealed, “We may hive off the cargo segment into a subsidiary to unlock its full potential,” though no specific timeline was provided. The company declined to comment officially on these plans.
The airline confirmed the development of new software and network optimization with ET. An Air India spokesperson stated, “We developed a global KAM program to onboard, engage and expand with regional, national and global customers. We have also strengthened our distribution network globally with road feeder service and interline partnerships.”
Air India aims to partner with more sales agents, freight forwarders, and last-mile delivery partners to enhance its cargo capabilities.
Before ceasing its operation in 2012, Air India Cargo used to operate a dedicated freighter fleet. Further, it had a ground truck transportation to provide door-to-door services. It had primary hubs in Delhi (DEL), Mumbai (BOM) and Chennai (MAA). Air India used to operate a fleet of 737-200F aircraft.
Indian Air Cargo Industry
As of 2024, India has three dedicated all-cargo operation airlines, they are:
- Blue Dart Aviation
- Pradhaan Air Express
- Quikjet Airlines
India’s air cargo market is witnessing a robust recovery, with shipments increasing 7% year-on-year to 3.4 million tonnes in fiscal year 2023-24, according to Airport Authority of India data.
International cargo loads surged 10% year-on-year, driven by e-commerce growth and increased exports from new digital manufacturing sectors. This rebound follows a Covid-induced slump in 2020-21 when volumes dropped to 2.47 million tonnes from a pre-pandemic high of 3.56 million tonnes in 2018-19.
The Indian government aims to expand air cargo volumes to 10 million tonnes by 2030 through infrastructure development and export policy reforms. Airlines are capitalizing on this growth, with IndiGo planning to acquire 30 wide-body A350s to enhance its cargo-handling capabilities.
Mark Sutch, CarGo International CCO, stated that IndiGo’s cargo business has reached 350,000 tonnes annually with a narrowbody fleet and is now poised for further growth.
Surge in eBookings
Also, the Freightos data from 2020 to 2023 reveals unprecedented growth in India’s air cargo sector, positioning the country as a major global exporting hub. The data highlights four key trends:
eBookings surged by 6168% by the end of Q4 2023, indicating a significant shift towards digital processes. Participating airlines increased by 1100%, demonstrating widespread industry adoption.
Active IATA numbers grew by 2356%, reflecting expanded market participation. Active users increased by 2608%, signalling broader engagement across the sector.
These trends mark a pivotal moment in digitalization adoption by freight forwarders and airlines in India. The industry’s transformation, previously hindered by complexity, misaligned data, and cultural reluctance, now shows clear signs of progress.
What are your thoughts on the Indian Air Cargo Industry and Air India’s decision to create a separate Cargo Airlines, Will it succeed? Let us know your thoughts in the comments.
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