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Blue Dart veteran looks to Chennai to provide long-haul air carrier

INDIA needs a long-haul freight carrier to enter the market, according to 45-year veteran of air cargo Tulsi Mirchandaney, managing director of Blue Dart Aviation.

Speaking to delegates at Cargo Facts Asia in Hong Kong, she said: "Today, cargo is going through the Middle East for transshipment. We don't have a long-distance carrier, so cargo is being consolidated out of the country.

Ms Mirchandaney said that with a healthy GDP growth rate of 7.9 per cent this year, a steady increase volumes and relaxed air cargo investment rules, India was ripe for foreign players to enter the market.

"If we had an anchor airline, with long-distance connectivity, it would be a huge opportunity," she said.

"For the first time we're seeing a government civil aviation policy with a lot of stimulus for air cargo.

"The industry is now recognised as having infrastructure status with a lot of tax benefits, including 74 per cent foreign direct investment permitted in airlines and ground handling agencies.

"And 100 per cent investment is now permitted in MROs and airports ?so this is a great opportunity for people to invest in India."

Not long ago, Blue Dart was India's only all-cargo domestic airline with 19 per cent market share of air freight volumes. It is a subsidiary of express logistics and parcel delivery courier Blue Dart Express.

The company was 70 per cent owned by DHL since 2004, and this was said to be responsible for its success and its seven per cent annual volume increases.

Ms Mirchandaney said Blue Dart focused on domestic pharma and hi-tech movement and would "leave the international routes to the international players, for now".

She looked to Chennai, with its second highest GDP in India, as a prime candidate to provide such a long-haul carrier a strong transshipment hub.

"It the Detroit of the East, with its many automotive factories," she said. "When you look at neighbouring hubs like Dubai or Singapore, which have long-haul connectivity, there is no domestic distribution, they rely on transshipment. In India the long-haul freight opportunity would include import, export, and value-added re-export."

London's Loadstar noted that total e-commerce retail sales in India hit US$17.5 billion in 2015, up from only $2.3 billion in 2012, with projections of $55 billion in sales by 2018.

Ms Mirchandaney said the major implication for Blue Dart was how its fleet may need to evolve to support the growing express delivery market.

"What we're seeing is a change in our own practice, because these are very high-volume shipments, so will the same aircraft be able to service these in the future?

"Because we're so used to having high-density loads, where we were going light by a single digit, now suddenly you find load factors have come down quite a bit."

Ms Mirchandaney noted that air cargo in India still faced many challenges, including a lack of airport capacity, high fuel prices, state taxes and regulatory constraints.

"There are challenges, but therein lies the opportunity," she said.