Cargo Connect ACAAI 2019

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VOLCONVENTION X ISSUE IX august ACAAI ISSUE2019 2019`20 38 Robust

airport infrastructure will stand the test of time

44 Ground

Handling needs fast-track policy implementation

48 Air

Connectivity crucial to enhancing India’s global participation

Potentialising India’s dream as a

Transit

Cargo Hub

Be the change that you want to see in the world

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contents

ACAAI Convention Issue 2019 Publisher & Editor-in-Chief Smiti Suri Principal Correspondent Ritika Arora Bhola Special Correspondent / Sub-editor Upamanyu Borah

20 COVER STORY

Potentialising India’s dream as a Transit Cargo Hub

38 SPECIAL FEATURE

Robust airport infrastructure will stand the test of time

focus

feature

Correspondent Saurabh Sharma Reporter Pallavi Jain Director Ajeet Kumar Marketing Manager Rahul Arora Marketing Executive Akash Gupta Rahul Jain Uday Arora

End-to-End : The survival for Air Cargo .................................................10 feature

Leveraging the potential of ‘Emerging Air Trade Partners’ .................................54

Accounts & Administration Lavish Thakur

Guillaume Halleux, Chief Officer Cargo,

Designer & Visualiser Ashok Saxena

Qatar Airways Cargo .........................................64

Jessica Tyler, Vice President- Strategy &

INTERVIEW

Development, American Airlines Cargo ...........66

Ground Handling needs fast-track policy implementation ...........................44 feature

Air Connectivity crucial to enhancing India’s global participation ....................48

Wally Devereaux, Managing Director,

Cargo and Charters, Southwest Airlines ..........68 Rajesh Menon, Regional Head - Cargo, South Asia, Middle East & Africa, Cathay Pacific Airways .....................................70 Glyn Hughes, Global Head- Cargo, IATA ..........72 Sunil Arora, President, ACAAI ........................74 Afzal Malbarwala, Vice President, ACAAI .....76

FRONTLINE ............................................06 BUZZ .....................................................08 technology .........................................60 UPDATES .........................................78-79 UPCOMING EVENTS ...............................80 APPOINTMENTS ....................................81 REPORT .................................................82

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All materials printed in this publication is the sole property of CargoConnect. The printed matter contained in the magazine is based on research and analysis and information provided by the spokespersons featured.

The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily reflect the same.

CargoConnect is owned and published by Smiti Suri, and is printed at Compudata Services, 42, DSIDC Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014

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frontline ATITHI will create a tech-savvy image of India Customs and would encourage tourism and business travel to India while ICEDASH as an Ease of Doing Business monitoring dashboard of the Indian customs will help the public see the daily customs clearance times of import cargo at various ports and airports.

Nirmala Sitharaman, Finance Minister

1,48,000 tonnes of cargo was handled by

Hyderabad International Airport in FY 19 With more number of people making air travel, India was one of the fastest growing domestic aviation markets in the world for nearly five years continuously.

India is planning to open 100 additional airports by 2024, as part of a plan to revive economic growth in Asia’s third-largest economy.

Domestic cargo haulage is set to see a jump as airlines such as SpiceJet have launched operations through dedicated freighter aircraft, while IndiGo has decided to ferry perishable cargo.

India will allow the delivery of goods by drones by the year 2023. The country will prepare drone corridors by 2021.

The domestic air freight demand is expected to touch 1.1 million tonne by the fiscal 2025 at a compounded annual growth rate (CAGR) of 7-9 per cent.

6

CargoConnect - ACAAI 2019

Taxes can be lowered, competition on fuel supply can be improved and more efforts be taken on regulating airports.

The previous government lowered some taxes...It is going in the right direction.

Apparently, there is a strong push to extend airport capacity. Our concerns are taken into account.

Alexandre de Juniac, Chief, IATA

India is expected to have the largest number of aircraft flying by its scheduled airlines by December 2019, surpassing the previous record of 616 aircraft in January this year. Domestic air passenger traffic is expected to clock up between seven and nine per cent in 2019 — benefiting from the induction of aircraft by airlines.

Arun Kumar, Director General, Directorate General of Civil Aviation (DGCA)

The newly-launched first-of-its-kind Transshipment Excellence Centre (TEC) facility, will contribute significantly in promoting Bangladesh’s textile and retail industry leveraging to carry and connect voluminous air cargo across the world.

TEC will contribute significantly in promoting Delhi airport as air cargo hub of the South Asian region and an air cargo gateway to the world.

Sanjiv Edward, CCO, Delhi International Airport Limited (DIAL)

SpiceJet is committed to investing in the growth of Indian trade and commerce.

We have received a positive response from the market and we are confident that this move will add value to our customer’s supply chains. The SpiceJet freighter aircraft, capable of carrying 20 metric tons of cargo – will operate six days a week between Hyderabad, Delhi, Mumbai, Bangalore and Chennai.

Manjiv Singh, Chief Project Officer, SpiceJet

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t will not be an understatement to say that it is the most opportune time for India’s air cargo industry when both industry leaders and government are working hand in hand towards the growth of aviation sector with the objective of increasing share of air trade in the country’s GDP.

down the time to 4 - 5 hou rs; short lead time is likely to favour the transport of perishables and temperat u r e s e n s it ive

anistan, For Afagrh, India was last yergest foreign. the la t destination d expor tan exporte th Afghanl is ods woorit s tota gmoil t lion $740 sian neighbor South A India.

Silver Linings awaited in Open Air Freight Routes

Ever since the inauguration of India and Afghanistan air freight corridor passing over the air space of Pakistan, exchange of myriads of cargo between the two countries have started which is actually beneficial on three accounts- economic, strategic and cultural relationship. Afghanistan exported total goods worth $740 million to its South Asian neighbour India, with which it does not share a common boundary and has India’s traditional arch-rival Pakistan in between. For Afghanistan, last year, India was the largest foreign export destination. Direct connectivity between India and Afghanistan will indubitably usher the bilateral air cargo growth in the new dawn of prosperity.

Vandana Aggarwal, Economic Adviser, Ministry of Civil Aviation has recently been vocal about the opportunities thrown by this new trade route in air cargo market. “The route will cut

8

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able items, efficiently a nd sw i f t ly. Apa r t from this the participat ion of global

Various West Asian and European destinations are suggesting Indian government the establishment of more open air corridors that would boost trade through air cargo.

The pa c ipation of global frretiig ease in reghters and con ainutslatory enshrinsetr s d Naa tional Air Cargin (NACP) ilo Policy l gain the confidenwce of global carrie alike torcsoand investors menc the operatiom ir ns in Inedia .

goods,” Aggarwal informed. Then she went on adding that she has been receiving calls f rom var ious ot her West Asian and European destinations suggesting establishment of more such open air corridors.

T he Afgha n ista n Chamber of Commerce and Industries (ACCI) recently asserted that Afghanistan’s economic dependency on Pakistan has gone down following the establishment of new alternative trade and transit routes with a number of countries including an air corridor with India.

Dialogue on air corridors with active the participation of civil aviation authorities, air freight and aviation companies of India will bring new prospects with regard to transportation of air shipped goods, including perish-

f r eig hter s and ease in reg ulator y constraints as enshrined i n Nat ional Air Cargo Policy (NACP) will gain the confidence of global carriers and investors alike to commence their operations in India and pump in the money in emerging air freight markets. There is a potential scope to increase the traffic flow between India and ASEAN countries. When the ASEAN countries demand for more slots, it itself shows a rising potential of traffic flow between India and Southeast Asian countries.

Therefore, airlines based in India have the potential to grow with the growing demand of air traffic between India and Southeast Asian countries. CC

focus

10 CargoConnect - ACAAI 2019

focus

End-to-End

The survival for Air Cargo On-time and safe delivery of high-valued cargo is what the air cargo industry strives for. As such, The Air Cargo Agents Association of India (ACAAI) has decided ‘End-to-End Logistics - The Way Forward’ as the theme for their 45th convention because it aptly explains that efficient end-to-end logistics is the most critical component of the supply chain and ultimate goal of the entire logistics management process.

Ritika Arora Bhola

ACAAI 2019 - CargoConnect

11

focus

oreword

On-time transportation of time-sensitive products, temperature-sensitive cargo and high-value commodities rely on the unique capabilities and competencies that air cargo offers. And to make that happen what is required is end-to-end, well-organised, and efficient logistics management process.

Unfortunately, this is actually what the Indian air cargo industry strives for, today. And globally, the future of air cargo business depends on it. Logistics management is a very important component of any business activity – the processes of moving consignments from origin to the destination are often complex and subject to a range of regulatory requirements, especially when they include international cargo transportation by air. Therefore, carrying out smooth and efficient logistics operations turns extremely challenging.

'End-to-End Logistics' is an important and appropriate theme, remarks Sunil Arora, President, ACAAI. “It involves the various stakeholdersfreight forwarders, airports, airlines, custom clearance agents, logistics service providers, transporters, warehouse operators, as well as air freight stations for facilitating a seamless air cargo delivery model. First mile and last mile connectivity holds supreme importance

12 CargoConnect - ACAAI 2019

First mile and last mile connectivity holds supreme importance in this sector. Today, the logistics scenario has altogether changed, and it’s not easy to move air freight to and from the country, an affair that needs to be stressed upon.

Therefore, together, we must work on providing efficient first mile and last mile services to the exporters.

Sunil Arora

President, ACAAI

in this sector. Today, the logistics scenario has altogether changed, and it’s not easy to move air freight to and from the country, an affair that needs to be stressed upon. Therefore, together, we must work on providing efficient first mile and last mile services to the exporters,” says Arora.

Expressing similar sentiments, Afzal Malbar wala, Vice President, ACAAI says, “In the present market, the need is to cut down total lead time and multiple communications with the aim to offer cost-effective solutions to customers. To bring awareness of the changes happening from the tradition-

e-AWB helps the industry get one step closer to eliminating inefficiencies, shipment delays and costly errors resulting from paper- and manual-based processes, it also introduces bigger challenges that cannot be solved overnight. Supply chain stakeholders need to be able to effectively communicate electronically, they also require access to timely and accurate information The biggest challenge related to security filings is knowing which information customs agencies internationally will require from one month to the next. While customs may be communicating to companies within their own countries, supply chain partners and their providers are often left scrambling to fulfil new or upcoming requirements.

The SAFE Framework of Standards as well as ICS-2 have eliminated the exempt status previously given to mail. Today, these changes require postal organisations and air express carriers to report information on the mail shipments they carry to customs agents. As of 2023 (and the expectation is that this will move forward), air carriers will also need to report postal shipments.

The requirement of everyone involved in the air logistics chain—shippers, brokers, forwarders, air carriers and truckers—to execute flawlessly to accelerate the movement of goods, achieve quick clearances from customs and provide new levels of visibility to customers throughout the shipment lifecycle.

focus

In the present market, the need is to cut down total lead time and multiple communications with the aim to offer cost-effective solutions to customers.

To bring awareness of the changes happening from the traditional (mukadam module), the theme has been selected and eminent personalities will throw open their views and opinions.

End-to-End logistics will give advantage to customers to focus on their core business activities while logistics service providers handle operations for them. This will enable both to grow together.

Afzal Malbarwala Vice President, ACAAI

al (mukadam module) the theme has been selected and eminent personalities will throw open their views and opinions. End-to-End logistics will give advantage to customers to focus on their core business activities while logistics service providers handle operations for them. This will enable both to grow together.�

Need of the hour

Industry experts believe air cargo is highly diverse in its value and physical characteristics. It may originate from and be delivered to, almost anywhere in the world, most commonly as goods being sent from a consignor to a consignee or from a seller to a buyer. The variety of cargo can range from pharmaceutical products, perishables, luxury items, wines and liquor, personal belongings, gifts and donations, automobile equipment and even live animals. The number of entities involved increases when it comes to handling of

14 CargoConnect - ACAAI 2019

variety cargo with varying responsibilities except for the routine ones such as consignors, consignees, Logistics Service Providers, Ground Handlers, Haulers, Regular Agents, Custom Agents, Aircraft Operators, Express Carriers, Postal Operators, etc.

As a further complication, these entities will often be known by different names according to the state or region in which they are located. The cargo may transfer between several different flights before it reaches its

destination and consignments will be subjected to a variety of procedures and documentary requirements in accordance with legal and commercial frameworks.

Authorities responsible for the safety of cargo, for the prevention of crime and protection of fiscal revenues, will all have an interest and their own rules.

All those involved in these often complicated movements share the responsibility for ensuring the safety and security of the cargo and for operating

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Industry experts believe air cargo is highly diverse in its value and physical characteristics. It may originate from and be delivered to, almost anywhere in the world, most commonly as goods being sent from a consignor to a consignee or from a seller to a buyer. within the law. In particular, they are responsible for ensuring that nothing contained in the cargo will endanger an aircraft and the lives of those travelling.

Rueing on the impediments, Samir J Shah, Partner, JBS Group of Companies says, “The need for an enhanced solution is without a doubt. We have multiple service providers; multiple processes and related formalities. The efforts to reduce the same and streamline into a quick simple solution are on but will take some time to settle down. The intention and efforts of the service providers and the Government are aligned.”

T A Varghese, Immediate PastPresident, ACAAI couldn’t agree more.

Varghese explains, “The logistics supply chain encompasses the entire spectrum of producers and service providers from the factory or manufacturing unit to the doorstep of the ultimate consumer. The air cargo sector is one of the key links in the end-to-end logistics chain. At present, the linkage between the various players who are involved in this chain is not cohesive and is somewhat fragmented. As of now, there is no coordinated approach for a unified and interlinked logistics supply chain system solution to evolve, wherein the various players will be able to seamlessly discharge their activities without loss of time and other slippages.”

However, Varghese is counting on the National Draft Logistics Policy which is being formulated by Ministry

16 CargoConnect - ACAAI 2019

The need for an enhanced solution is without a doubt. We have multiple service providers; multiple processes and related formalities. The efforts to reduce the same and streamline into a quick simple solution are on but will take some time to settle down. The intention and efforts of the service providers and the Government are aligned.

Samir J Shah

Partner, JBS Group of Companies

of Commerce & Industry, to shape an integrated and seamless logistics supply chain system pan-India.

Anil Mantri, Director Sales & Marketing, Seal Air Freighters International also feels the same. “We have been striving towards this concept for years and making sure that customers be given the privilege of choosing the service provider who offers complete end-to-end solutions,” says Mantri.

“No doubt, the biggest game chang-

er in the trade has been GST, development of National Highways, but the pace has to be increased to boost our trade; otherwise smaller countries will take advantage and grow much faster than India,” further says Mantri.

Afzal Malbarwala, Vice President, ACAAI informs, “In the past, our industry worked on the basis of specialisation in each segment of logistics. Forwarders/transporters/customs brokers/ warehouse operators all were offering services to the same customer but individually. This was increasing costing and total lead time with multiple chains of communications.”

Convoy of hope

Efficient and effectual end-to-end logistics is the only way forward for the air cargo industry. It includes supply chain design, order management, inbound to manufacturing, transportation management and reverse logistics. Apart from these, airlines, custom agents, ground handling agents, air cargo forwarders/logistics service providers, brokers, domestic transportation/transporters, air cargo terminals/terminal operators, distribution centers/warehouse operators and integrated international express services are also important part of the supply chain. Amongst these, air cargo terminals are critical in the air cargo supply chain. A typical air cargo terminal has three main users – airlines, air cargo terminal operators

focus and forwarders/cargo-agents who are the principal contributors to the revenue of air cargo terminals. To carry out the superior operations, the industry needs to have adequate infrastructure, technology and funds. Acknowledging the same, Varghese states, “Infrastructure is the weakest link in the end-toend logistics chain in India. The infrastructure deficiencies and limitations in the road, sea and air transportation sectors have been a cause of concern for many years. The development of the required infrastructure requires a vast amount of capital and other resources.

The government has taken up infrastructure development as a very high priority programme and is vigorously pursuing this agenda. While India possesses world class technology, trained and skilled manpower is not available to the required extent. The availability of funds is inadequate at times due the conservative lending policies of financial institutions, besides the current scenario of sluggish economic growth in India and across the world.” Here, Shah suggests that the same has to be funded by the ‘users’ indirectly through usage. The service providers should understand the need and are using technology to create software backbone. Ingenuity has been the hallmark of the Indian forwarder. Today, the industry is witnessing many startups arising and working in this space.

Nonetheless, Shah informs that bringing transparency, clarity of roles, cost rationalisation, up skilling and manpower availability remain some of the other major issues within the industry.

According to Mantri, “At this juncture, the industry has a fragmented approach. Specialised players are coming forward to fill the gaps and to some extent the idea is that we go with full integration of all the processes required to carry out end-to-end logistics and supply chain solutions. Industry has the potential; both in human capital and talent-wise to leverage the advantage of offering the best solutions; however funds and technology may be required to strengthen the base. Ultimately, these things will take all of us forward.”

Mantri believes funding from in-

18 CargoConnect - ACAAI 2019

The air cargo sector is one of the key links in the end-to-end logistics chain.

As of now, there is no coordinated approach for a unified and interlinked logistics supply chain system solution to evolve, wherein the various players will be able to seamlessly discharge their activities without loss of time and other slippages.

No doubt, the biggest game changer in the trade has been GST, development of National Highways, but the pace has to be increased to boost our trade; otherwise smaller countries will take advantage and grow much faster than India.

T A Varghese

Director Sales & Marketing, Seal Air Freighters International

Immediate Past-President, ACAAI

Anil Mantri

To increase process transparency while decreasing shipment delays, a fully automated paperless trade environment with minimum face-to-face interactions needs to be implemented. vestors is not a major challenge unless the best and most effective cost saving model is available. In the last decade, most of the startups seeded from this Industry, with major funding being offered because of the potential and future that lies ahead for the industry.

Mantri hails “One should not forget that this Industry facilitates maximum employment generation.”

Mantri continues, “Many of the founders are not even from the Industry but they have capitalised the opportunity which is available to them and en cashing it. Most of the developmental work is happening towards automation which is making customers life easier, but we have a long way to conquer and I am quite optimistic that this industry will grow much faster and

will contribute increased GDP to the growth the of the country.”

The way forward

To increase process transparency while decreasing shipment delays, a fully automated paperless trade environment with minimum face-to-face interactions needs to be implemented.

Besides, it is anticipated that the recent robust initiatives like formation of National Air Cargo Policy (NACP) by the Ministry of Civil Aviation (MoCA), enormous investments in infrastructure at the airports, digitalisation and earnest efforts to reduce dwell time and logistics costs will help the country to explore the potential in the new markets and sustain cargo growth in the next 5-10 years at least. CC

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cover story

Potentialising India’s dream as a

Transit

Cargo Hub The unveiling of the much-awaited National Air Cargo Policy, earlier this year, has definitely heightened the expectations of Indian freight forwarders, as the policy seeks to make India among the top five air freight markets by 2025, besides creating air transport shipment hubs at all major airports over the next six years. The policy also aims to leverage India's geographical location as a transit hub between Europe and Southeast Asia and a gateway to the South Asian region, and will encourage code sharing/inter-line agreements between foreign and Indian carriers.

Ritika Arora Bhola

20 CargoConnect - ACAAI 2019

T

ansshipment cargo hubs at airports segregates cargo brought in by airlines for onward dispatch, facilitating its movement across the globe as per requirement. EXIM shippers and the airlines get the opportunity to carry more volume of air cargo across the world by leveraging the transshipment facilities. A successful transshipment and consolidation hub not just boost tonnages at the airport but also contributes to the growth of various ancillary industries linked to the airport.

In India, transshipment cargo hubs are the need of the hour, not just as the country continues to ascend in the rankings of the world's largest economies with the size of its consumer market continuing to grow at a rapid pace but because the country will also play an increasingly important role as one of the Asia-Pacific region's major economic growth engines, helping to drive Asian regional trade and investment flows. To achieve this, the country's new economic roadmap has to prioritise the importance of creating a virtuous cycle of investment, savings and exports in order to sustain rapid economic growth over the next five years.

ACAAI 2019 - CargoConnect

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cover story

In a first, Indira Gandhi International Airport (IGIA) – Can India become a Transit Cargo Hub? Progress & Headway Delhi has launched a dedicated transshipment centre exclusively for cargo services. The facility named as ‘Transshipment Analysing the above, Videh Kumar Jaipuriar, CEO, Delhi Excellence Centre’ is spread in an area of around 70,000 sq ft International Airport Ltd (DIAL) remarks, “India’s air cargo and can handle estimated 20,000 tons of cargo in a month. sector has witnessed robust growth in the last couple of years.

Delhi International Airport Limited (DIAL), which runs National Air Cargo Policy Outline 2019 has focussed on many Delhi airport, is the first to take up the initiative under the initiatives aimed at making India among the top air freight National Civil Aviation Policy 2016 which aims to develop air markets in the world.” cargo transshipment hubs at major airports.

Besides establishment of the Transshipment Excellence After Delhi Airport, the upcoming Noida International Centre (TEC) on air side for seamless and efficient movement Airport Limited (NIAL) at Jewar is expected to be major air of transshipment cargo, Jaipuriar jots down the various initiacargo hub for India. According to the development plan of tives Delhi Airport has undertaken, and which are in line the Techno Economic Feasibility Report (TEFR), NIAL will with the focus areas including the government’s vision to be a transshipment hub for the country once it starts operations in 2022-23. As per the report, the airport is expected to strengthen bilateral trade relationship with the neighbouring cater to 2.5 million tons of cargo in the countries: next two decades. The primary hinter Delhi Airport is India’s first AEO (Authorised land for NIAL would include Mathura, Economic Operator) certified airport by Indian Agra, Aligarh, Palwal, Greater Noida, Customs.

Noida, Meerut and Ghaziabad. Like In terms of availability of air cargo infrastructure wise, Rajiv Gandhi International airto cater to growth, Delhi Airport has two air port that serves Hyderabad, located at cargo terminals with 1.8 million MT cargo the center of India’s production thehandling capacity per annum and scalable atre with a strong regional connecto 2.3 million MT. Delhi Airport has also tivity, is speeding along to become developed on-Airport warehousing IGIA – Delhi has launched a the country’s first full-fledged air facilities with 30,000 sqm area to dedicated transshipment centre cargo hub. Its advantage — more facilitate freight forwarders and other than 20 key Indian and other logistics companies at the airport. exclusively for cargo services. The South Asian cities are less than  In FY 2018-19, the Delhi Airport facility named as ‘Transshipment handled 1.04 million MT cargo, the two hours of flying time away Excellence Centre’ is spread in an highest ever cargo handled by an and South-East Asian cities, such area of around 70,000 sq ft and airport in India. as Singapore, Kuala Lumpur and can handle estimated 20,000  With focus on pharma and perishable Bangkok, and Middle-East cities tons of cargo in a month. products, Delhi Airport has developed are just four hours away.

Videh Kumar Jaipuriar, CEO, Delhi International Airport Ltd (DIAL)

India’s air cargo sector has witnessed robust growth in the last couple of years.

National Air Cargo Policy Outline 2019 has focussed on many initiatives aimed at making India among the top air freight markets in the world.

22 CargoConnect - ACAAI 2019

cover story

SGK Kishore, CEO, GMR Hyderabad International Airport Ltd (GHIAL)

The new National Air Cargo Policy supporting industry policies such as National Integrated Logistic Policy (NILP), EXIM Policy, Free Trade Agreements and Air Service Agreements have been paving way for the progress of air cargo business in India. Because of factors such as stable growth, geographic locations, increased industrial production, multimodal integration, and well-networked logistic connectivity by air and road, India is all set to register growth by leaps and bounds where air trade is concerned.

temperature-controlled facilities with 1.5 lakhs MT ficer, Bangalore International Airport Ltd (BIAL) too opines, handling capacity comprising of multiple temperature “Currently at BIAL, about one per cent of the total cargo volume is airside transshipment, including domestic-domestic range chambers. It is the first airport in India to have cool (D-D), international-domestic (I-D), and domestic-internationdollies to carry cargo to maintain cool chain from al (D-I); (I-I is NIL). On the landside, transshipment through terminals to the aircraft. bonded trucking accounts for five per cent of BIAL’s interna Delhi Airport is India’s first ‘e-AWB360 Certified tional cargo volumes.” Raghunath says that they intend to Airport’ by International Air Transport Association develop a D-D transshipment zone on the airside in the me(IATA) for paperless cargo processing. dium to long-term. “Additionally, in the long-term, our aim is Meanwhile, highlighting the developments at Hyderabad to have transshipment comprising between 15-18 per cent of airport, SGK Kishore, CEO, GMR Hyderabad International our total cargo volumes. In order to facilitate transshipment Airport Ltd (GHIAL), states that the airportis progressively from the hinterland/manufacturing zones, BIAL has introworking towards making Hyderabad a strong cargo hub. duced LOGI-Connect, a road-feeder service to transport Kishore says, “India’s air cargo business has been witnessing a CAGR growth of 11 per cent for the last few years. There bonded cargo from these catchment areas to the are strong indicators for a robust market airport. The zones currently covered under this growth in India which are backed by busiinitiative are Tirupur, Coimbatore and Ambur. ness friendly policies and ease of doing busiOver time, we aim to extend this service to include ness. The new National Air Cargo Policy Erode, Salem, Mysuru and the North Karnataka region,” informs Raghunath. supporting industry policies such as National Integrated Logistic Policy (NILP), BIAL is also working towards developing a dedicated International Express EXIM Policy, Free Trade Agreements and Cargo Terminal. The terminal will be Air Service Agreements have been paving way for the progress of air cargo India’s first dedicated express cargo BIAL is also working business in India. Because of factors terminal and will be spread across a towards developing a dedicated such as stable growth, geographic land parcel of nine acres. The facility International Express Cargo locations, increased industrial prois expected to be functional by April duction, multimodal integration, 2020.

Terminal. The terminal will be and well-networked logistic conIndia’s first dedicated express cargo nectivity by air and road, India is all Tackling the impediments terminal and will be spread across a set to register growth by leaps and land parcel of nine acres.

India has the potential to play a much bounds where air trade is concerned.”

The facility is expected larger role in the air cargo market, esKishore emphasises on GHIAL’s to be functional by pecially with international carriers lookcontinuous endeavour to create requiApril 2020. site infrastructure facilities to rally toing at Asia as a major growth driver for wards this goal. Growing at the pace of their air cargo business. However, the double digit cargo growth year on year, GHIAL major airports in India, even after enjoying the has been taking steps towards expanding the existing geographical advantage and suitable location to serve facilities, adding new infrastructure, transshipment facilities, as a transshipment hub, have not been explored to its full integrated express terminal, dedicated perishable facilities, potential. According to Keku Bomi Gazder, CEO, AAI Cargo pack houses and strong network- International and Domestic Logistics and Allied Services (AAICLAS), the reasons are (Air and Road), multimodal connectivity and ease of operacustoms and security policies and the absence of uniform tions in the air cargo terminals. transshipment handling procedures at major airports. Another roadblock is the absence of a full -fledged air cargo hub Satyaki Raghunath, Chief Strategy & Development Of-

24 CargoConnect - ACAAI 2019

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CDG, LIL, NTE, DUS, FRA, HAM, MUC, BRU, STR, HAJ, PRG, WAW, BUD, MAD, MAN, CPH, MRS, LYS, BCN, BLL

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cover story

Satyaki Raghunath, Chief Strategy & Development Officer, Bangalore International Airport Ltd (BIAL)

In the long-term, our aim is to have transshipment comprising between 15-18 per cent of our total cargo volumes. In order to facilitate transshipment from the hinterland/manufacturing zones, BIAL has introduced LOGI-Connect, a road-feeder service to transport bonded cargo from these catchment areas to the airport.

backed by strong regional connectivity and road network for the last mile transportation. Gazder says, “Transshipment cargo, which constitutes as much as 60-70 per cent of the total volumes handled by some of leading airports, is almost negligible for Indian airports. Therefore, adhering to the guidelines of the National Air Cargo Policy, the government has decided to mandatorily earmark the land for air cargo operations at the existing and upcoming airports. The infrastructure, connectivity and ancillary facilities at major airports are being looked into for a much-needed air cargo hub.”

Vipin Vohra, Vice Chairman, Continental Carriers believes collective efforts are being made by the respective authorities and institutions to take India among the top five air f reight markets by 2025. “Standard operat i ng procedures Noida International Airport (SOPs) are being developed to Limited (NIAL) at Jewar is streamline proexpected to be major air cargo cesses. The govhub for India. According to the ernment is workdevelopment plan of the Techno ing on this vision Economic Feasibility Report (TEFR), by removing all NIAL will be a transshipment hub bottlenecks to profor the country once it starts mote the developoperations in 2022-23. ment of a last mile/first mile connectivity program at international/ regional gateways, thereby reducing the time taken to promote faster movement of the goods through India,” informs Vohra.

Counting on the prospects of the National Air Cargo Policy, Ram Menen, Independent Director, Expofreight remarks, “The intent of the policy is good and has the right thinking behind it to achieve what the objective has set out in the document. Key to success will be to have uniform application of rules, processes and procedures pan-India. It should not be subjected to any local state influences. Infrastructure in and around the airports/industrial parks along with interconnectivity will be critical to success. Any bottlenecks and congestions

26 CargoConnect - ACAAI 2019

around airports will be a major hurdle in transportation logistics. Uninterrupted road transport infrastructure is also quite important. Air capacity in domestic operations is still a challenge because of the high cost of operation of freighters. The government should seriously reconsider the taxation applied on aviation fuel which is a very large portion of the operating cost for an airline and challenges the viability of route profitability as domestic yields are very low.”

Further, Menen says, “Digitisation is key; human intervention, especially when it comes to border control and other regulatory processes should be kept to minimum. It is very important that all airports and related authorities work with one common system which is for all players to access and interact with. Paranoia of data security can be overcome through application of blockchain technology. Besides, E-commerce folks should be given preferential real estate around the airports to build their facilitation centers considering the fact that E-commerce is the highest growth segment of the air cargo industry.”

Meanwhile, focussing on the progress and headway, industry veteran Bharat Thakkar, also Joint Managing Director of Zeus Air Services, believes that promotion of domestic and international air cargo including express delivery services is a key objective of the Indian government. “Over 160 airports currently fall into this category and following-through on this initiative will improve regional connectivity across the nation,” feels Thakkar.

“It is difficult to say exactly what scale of impact this will have on the logistics sector since most goods are still transported by road or rail. But, we can be assured that it would only be an improvement on the existing state of things. The reach of companies operating in the logistics sphere would increase if the logistics sector sees transport by air as a viable option,” says Thakkar.

cover story

Keku Bomi Gazder, CEO, AAI Cargo Logistics and Allied Services (AAICLAS)

AAICLAS is in the process of creating an exclusive infrastructure for handling of Transhipment Cargo at Air Cargo Complex, Chennai. Secondly, Vizag Airport has also a huge potential to become a transshipment hub, given its geographically advantageous location. The Domestic Air Cargo Operation at present is being managed by AAICLAS departmentally, and there is an active plan in offing to establish transshipment cargo infrastructure at the airport.

Thakkar also underlines the fact that air cargo amounts to above ten per cent of airline revenues and E-commerce boom will boost the domestic air logistics.

“Air cargo is suffering from a prolonged slump that has seen falls in yields, revenues and market share. Since 2010, world trade has grown by 12 per cent whereas, air cargo demand growth has been basically flat with only a two per cent increase. A divergent trend in the passenger demand, with growth continuing in the historical five to six per cent range, has complicated the situation. As airlines fleet capacity grow to meet rising passenger demand, capacity has been introduced into weak cargo markets. Sensitive cargo also prefers air. As the importance of air cargo industry increases, so does the need for skilled freight forwarders to be able to cope with the pressure of delivering goods in a customer-oriented or customised manner. Freight forwarders thrive at skillfully answering their clients’ needs and consistently delivering the best combination of price and quality. Finally, E-commerce boom will boost the domestic air logistics,” Thakkar adds.

Airports becoming transshipment hubsUntapped Potential There is a significant untapped potential for air cargo in India.

One can get the indication of this from the very fact that the total volume of about 2.5 MMTA cargo handled by all Indian airports is less than that handled by airports such as Memphis, Hong Kong, Shanghai, Incheon, Anchorage and Paris.

A recent KPMG report has shown that the average weight load factor of air cargo during the last five years was about 62

28 CargoConnect - ACAAI 2019

per cent, reflecting significant unused capacity. In addition, the transshipment cargo, which constitutes as much as 60-70 per cent of total volumes handled by some of the wleading airports, is almost negligible for Indian airports.

Thus, a significant potential lies for the Indian airports to become transshipment hubs.

Hyderabad airport, which is currently handling cargo of about one lakh tonnes per annum (TPA), is favorably placed to take this spot. Lufthansa has already nominated Hyderabad airport as its pharma hub and Cathay Pacific recently added twice-a-week Boeing 747 freighter service. Also, Thai Airways and Blue Dart are offering main-deck through their Boeing 747-400F MD-11F and Boeing 757F freighters.

In addition, about 18 scheduled airlines, including 13 international, have cargo bases at Hyderabad airport, operating close to 2,000 flights a week, thus, offering ample belly space for Pune airport’s transshipment air cargo. The belly facility, which became operational space ranges from in March 2018, allows exporting two to three tonnes in a 737-type aircargo to Dubai and other international c ra f t a nd 20 -25 destinations. However, the tonnes in the larger international cargo quantity at 747-type aircraft. the airport has slumped mainly “We are taking due to drop in international several initiatives to connections. become a hub, taking advantage of our location, infrastructure and connectivity. Our terminal capacity can be modularly scaled up to 1.5 lakh TPA, while our apron is being upgraded to Code F, capable of accommodating even A380s,” says Kishore, adding that developing a cargo hub at Hyderabad can save both money as well as time for airlines and the trade.

BIAL too aims to develop a D-D transshipment zone on the airside in the medium to long-term. In the longer term, BIAL intends to manage about 15-18 per cent of volumes

cover story

Bharat Thakkar, Joint Managing Director, Zeus Air Services

It is difficult to say exactly what scale of impact this will have on the logistics sector since most goods are still transported by road or rail. But, we can be assured that it would only be an improvement on the existing state of things. The reach of companies operating in the logistics sphere would increase if the logistics sector sees transport by air as a viable option.

through transshipment. step and that it will add to the service bucket of Pune airport’s transshipment facility, which many Indian Logistics Companies, Yashpal Sharma, Managing Director, Skyways Group says, “The became operational in March 2018, allows exporting cargo to Dubai and other internapolicy shift from the Government and at the same time tional destinations. However, the internaits drive to optimise capacity utilisation tional cargo quantity at the airport has through big ticket privatised airports is slumped mainly due to drop in internaheartening. The opportunity is there for tional connections. Factors like lack of all airports in India to explore this, and basic infrastructure are also at play.

I am confident that most of the private India’s air cargo business has Most exporters are ready to spend exairports will do so. Creating a sepatra money and transport goods to rate facility to cater to transshipbeen witnessing a CAGR growth of ments at each airport will surely Mumbai rather than opt for Pune.

11 per cent for the last few years. boost the confidence of customers AAICLAS is in the process of creThere are strong indicators for a ating an exclusive infrastructure for and industry stake holders includrobust market growth in India which ing us.” handling of Transhipment Cargo at are backed by business friendly Meanwhile CK Govil, Owner, Air Cargo Complex, Chennai. Secpolicies and ease of doing ondly, Vizag airport has also a huge Activair Airfreight India stresses business. potential to become a transshipment that the work of this magnitude requires lot of planning both in terms of hub, given its geographically advantageous location. The Domestic Air Cargo work and people. “While the mandate Operation at present is being managed by AAis absolutely clear on the development, there have ICLAS departmentally, and there is an active plan in to be efforts to work around the complexities of the multiple offing to establish transshipment cargo infrastructure at the parties involved in the setup. It will obviously take some time airport. Gazder informs, “There are three International airto feel the work on the ground, however, I am reasonably lines namely – Air Asia, Silk Air and Air India connecting comfortable that the impact will be across all the sectors and Vizag with Singapore, Dubai and Kuala Lumpur. There is not just restricted to Delhi,” says Govil. certainly a demand in the pharma and seafood sector, and Complementing Govil, Vohra says that there are other once the transshipment facility is made operative, the demand airports focussing on developing transshipment hubs at their for air connectivity will increase too. The geographical advanproperties. Kolkata, Mumbai, Pune, Hyderabad along with tage of Chennai and Vizag is certainly an opportunity to be other metro cities are already in the process of becoming capitalised by AAICLAS.” transshipment hubs. The upcoming Noida International Airport (NIAL) at Jewar will be a transshipment hub for the Expressing that the new transshipment rulesare a good

30 CargoConnect - ACAAI 2019

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cover story

Yashpal Sharma, Managing Director, Skyways Group

The policy shift from the Government and at the same time its drive to optimise capacity utilisation through big ticket privatised airports is heartening. The opportunity is there for all airports in India to explore this, and I am confident that most of the private airports will do so. Creating a separate facility to cater to transshipments at each airport will surely boost the confidence of customers and industry stake holders including us.

country once it starts operations in 2022-23. As per sources, have also worked out plans to build few new airports. The the airport is expected to cater to 2.5 million tonnes of cargo UDAN scheme is turning out to be a big boost for regional connectivity and thus making way for improvement of airport in the next two decades. infrastructure at various regional locations of India. The govOutlining a practically significant perspective in a realernment has already privatised six more airports in India and world sense of importance, Jayaram Krishnan, Partner, Natesa Iyer & Co states, “The transshipment concept focusses they will soon see world-class infrastructure for passenger and only on infrastructural facilitation. Using the country’s aircargo. The private airports are enhancing capacities too. Expanports for International transshipment is dependent of freedom sion of terminals and airports will create possibilities for more rights being granted by other nations, We need to remember aircrafts which will mean greater cargo capacity. The cargo side ‘Open Skies’ policy that India has adopted for cargo is not a improvements at various private airports are visible and very universal facilitation and the right way is to conceive and heartening. General cargo as well as special cargo like temperature-controlled, etc. are all under the purview of the infra push implement regional cargo hubs of SAARC region before this at the airports, this will surely boost EXIM for India. can be scaled up. Kolkata and Chennai/Hyderabad can emerge At Hyderabad airport, the regional frequencies as regional hubs.” from Hyderabad increased from 212 a week in Krishnan continues, “The airports should March 2018 to 347 a week in August 2019. The airbe considered as free zones and, barring security aspects, the movement of cargo should not port already has a 33,000-tonne capacity dedicated be in anyway affected by border control protemperature-controlled pharma zone operated by cesses for an effective transshipment activity.

GMR and Menzies Aviation of the UK, Average A lot can be learnt from the cargo hubs like and a 20-acre Free Trade Zone with wareweight load factor housing and distribution.

Dubai, Singapore, Hong Kong, Doha, Other initiatives include cool conFrankfurt, and Amsterdam, etc. Processes of air cargo during the last tainer links for pharma products, genhave to be simple and part of the normal five years was about 62 per operations.” cent, reflecting significant unused eral and temperat ure-controlled within the cargo village, capacity. In addition, transshipment warehouses Strengthening Initiatives promotion of road feeder services cargo, which constitutes as much and 24x7 customs clearance of caras 60-70 per cent of total volumes goes. The latter was particularly reThe government has taken various initiahandled by leading airports, tives to improve the existing infrastrucquired for a full-fledged cargo hub as ture at AAI run airports across India. They both Delhi and Mumbai airports have is almost negligible for

Indian airports.

Vipin Vohra, Vice Chairman, Continental Carriers

Collective efforts are being made by the respective authorities and institutions to make India among the top five air freight markets by 2025. Standard operating procedures (SOPs) are being developed to streamline processes. The government is working on this vision by removing all bottlenecks to promote the development of a last mile/first mile connectivity program at international/regional gateways, thereby reducing the time taken to promote faster movement of the goods through India.

32 CargoConnect - ACAAI 2019

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cover story

CK Govil, Owner, Activair Airfreight India

The work of this magnitude requires lot of planning both in terms of work and people. While the mandate is absolutely clear on the development, there have to be efforts to work around the complexities of the multiple parties involved in the setup. It will obviously take some time to feel the work on the ground, however, I am reasonably comfortable that the impact will be across all the sectors and not just restricted to Delhi.

Ram Menen, Independent Director, Expofreight

The intent of the policy is good and has the right thinking behind it to achieve what the objective has set out in the document. Key to success will be to have uniform application of rules, processes and procedures pan-India. It should not be subjected to any local state influences.

one-shift of customs operating hours, while airports such as geoning traffic of cargo and to bring the country's logistics at Hong Kong, Dubai and Shanghai have 24x7 customs clearpar with global standards. In this regard the decision to reduce ance. international air cargo dwell time from 72 hours to about 48 According to Kishore, “What the airport needs now is a hours is worth mentioning.” domestic carrier to turn it into its cargo hub. And for this, the Also, complementing the government’s efforts, Vohra expresses that with a region-wise focus, the government is leaving airport operator is in talks with a few airlines and hopes to no stone unturned in improving infrastructure in some of Inseal a deal soon. The infrastructure, connectivity and ancillary dia’s key, yet undeveloped regions. Vohra maintains, “It’s not facilities are ready. Once we get a carrier, the airport will soon just the government, the private sector also has extended its serve as India’s much-needed air cargo hub.” support in this regard. The government is actively developing The establishment of a air cargo hub in India would require multimodal logistics parks in the country. The dedicated a dedicated core group of decision making officials from the freighter service of SpiceXpress between Guwahati and Hong government and the players of the cargo industry, feels Gazder.

Kong will provide huge opportunities to the Northeast and Besides, it is important that Indian carrier should use wideallow the region to expand its reach to international markets.” body freight aircrafts to create air cargo capacity by two way transportation of tourist to the Indian subcontinent.

Achieving the dream by 2025?

Gazder says, “In this regard, the concerned ministry has been extending all kind Various developments such as technology set-up are of encouragements to establish agreegoing on in varied sectors related to air cargo inframents between national and international structure at a very fast pace to achieve the carriers/freighters and other airline opgoal of becoming a transit cargo hub. erators to provide access to key global The National Air Cargo Policy also cargo hubs. Regulating policies and marks the government’s aims to do away streamlining of transshipment procewith paper transactions and implement dure to support seamless transshipdigital transactions wherever possible In order to promote India ment of air cargo from domestic to which will reduce the holding time of as a transit hub, the establishment international flights and vice-versa cargo at air cargo terminals. The usof Special Economic Zones (SEZs) in age of new technology like Internet on a tail-to-tail basis for quick and of Things (IoT), etc. shall be further cost-effective turnaround is being the vicinity of the major international useful in eliminating revenue leakage considered and worked upon. Furairports is being planned and the ther, the government has taken sevin the logistics chain. availability of land is being eral initiatives to cope with the bur“This is a very ambitious target set

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34 CargoConnect - ACAAI 2019

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cover story by the Government and will be dependent on various alignAccording to Menen, “Given the existing mindset and ments within and outside the government agencies, port authe way things have been happening, purging the existing thorities, terminal operators and the Freight Forwarding mentality and the number of agencies involved in the trade, community,” says Sharma adding that India will need to make transportation and logistics industry, I will say it is an ambitious target. There are too many agencies involved in the many more changes and ease the processes to facilitate transshipments at airports and ports. The markets of South East process today. These agencies have to step back and create Asia plagued with capacity constraints, India can one entity which is fully empowered, tasked to surely add a great value in offering its shores make it happen. This entity will have to be fully and skies for being the choicest transit hub in funded and insulated from any and all political the region. influences.”

“The government is adopting a systematic Thakkar concludes saying, “India has a geographical advantage to operate as a sucand inclusive approach with due exchange of Regulating cessful hub initially serving the emerging thoughts with all the stakeholders in general markets of South Asian Association for and Domestic and International Airlines/ policies and Regional Cooperation (SAARC) and freighter operators through a digital platstreamlining of form to ensure transparency. The governcountries such as Myanmar, Vietnam transshipment procedure to ment is also planning to associate with and Cambodia. The vision statement support seamless transshipment the international trading partners to ‘Whole of the trade value chain’ views of air cargo from domestic to develop the Trade-Corridor for speedy while implementing reforms across international flights and vice-versa multi-logistics, trade and other institumovement of high-value air cargo. In on a tail-to-tail basis for quick order to promote India as a transit hub, tions/departments. The policy shall be the establishment of Special Economic fair to all supply chain participants, enand cost-effective turnaround suring each stakeholder group's concerns Zones (SEZs) in the is being considered and and issues are addressed wherever possivicinity of the major worker upon. ble. The Nainternational airports

Jayaram Krishnan, Partner, Natesa Iyer& Co

The transshipment concept focusses only on infrastructural facilitation. Using the country’s airports for International transshipment is dependent of freedom rights being granted by other nations, We need to remember ‘Open Skies’ policy that India has adopted for cargo is not a universal facilitation and the right way is to conceive and implement regional cargo hubs of SAARC region before this can be scaled up.

Kolkata and Chennai/Hyderabad can emerge as regional hubs. is being planned and the availability of land is being explored,” enlightens Gazder.

The future of industry is good provided all the steps mentioned in National Air Cargo Policy are taken care of properly, feels Vohra. “India has the potential to play a much larger role in the air cargo market, especially with international carriers looking at Asia as a major growth driver for their air cargo business. With the right policy in hand, we are in the process of removing obstructions like absence of a fullfledged air cargo hub, regional air connectivity and good road infrastructure. Personally I feel that to make this a success, airlines should bring in their freighters in India to make enough capacity available otherwise transshipment from other countries won’t be cost-effective and will leave a negative impact,” suggests Vohra.

The most crucial aspect, Krishnan says, unless and otherwise there is a home grown freighter operator with an international footprint the reality will always elude us. SpiceJet’s SpiceXpress rolling out operations to Kabul, Dubai, Hong Kong should be an encouragement to others.

36 CargoConnect - ACAAI 2019

tional Air Cargo Policy aims to make air cargo logistics operations in India the most efficient and seamless – cost and time effective – over a foreseeable period of time. The policy details out clear metrics based on which the efficiencies will be measured, and creating key performance indices that monitor policy execution. These have been developed by bringing all stakeholders in creating this ecosystem, namely, transport carriers for air, road and sea, regulatory and financial organisations. All organisations in the air cargo ecosystem come under the auspices of an overall strategic organisation that has been formed to realise these objectives.”

Well, this cautious start will provide the requisite knowledge and expertise to take on the other existing major Middle Eastern/Asian hubs and expand its hinterland up to Japan in the east and Africa in the west. Besides, India offers a stable political environment, skilled workforce. The existing airport infrastructure and user charge which is likely to act as a major disincentive to attract customers to use the hub, is being aligned and worked upon as part of the ongoing reformation evolution. CC

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Robust airport infrastructure will stand the test of time

38 CargoConnect - ACAAI 2019

A

s Indian economy braces to integrate itself up with the global economy, upgradation and overhauling of aviation infrastructure is of utmost importance to further facilitate global trade. In this context, it is vital that airport infrastructure grows in anticipation of the escalating needs of the air transport industry. But as this is a capital-intensive sector, the distinc-

Airports are the purveyors of seamless air cargo services contributing immensely to a country’s international competitiveness and flow of foreign investments. With the emergence of new business destinations, increased scope of connectivity, government initiatives and new airline operating models triggering the growth of airport infrastructure in India and elsewhere, the quality of infrastructure at airports will have direct repercussions on the infallibility of cargo operations.

Saurabh Sharma

tions in infrastructure of various airports are always determined by the factors like terrestrial diversities, available space in a certain region and perspective planning with a vision to muster the combined resources of the public and private sectors.

Ground report

There are over 450 airports and airfields in India out of which 101 are operational as in December 2018. The staterun airport operator Airports Authority of India (AAI) owns 125 airports. It is one of the largest airports companies of the world. AAI is also responsible for providing Air Navigation Services (ANS) over the India airspace.

According to a vision document released by Ministry of Civil Aviation (MoCA), India may have around 190200 operational airports by 2040. The country’s top 31 cities may have two

special feature airports and the cities of Delhi and Mumbai, three each. The incremental land requirement is expected to be around 150,000 acres and the capital investment (not including cost of acquiring land) is expected to be around US$ 40-50 billion.

Air cargo throughput in India increased by 12.7 per cent to 3.35 million MT in FY17-18. International cargo contributes to 60 per cent of the total air cargo volumes in India and grew at 15.6 per cent over FY 16-17. While the domestic cargo grew by only 8 per cent due to stiff competition from the other mode of express industry and various infrastructure challenges at Indian airports.

The demand for air transport in the coming years is expected to grow multifold in a growing economy like India.

But many economy analysts and experts are apprehensive over the possibility of widening gap between the acceleration in demand and the expansion of airport infrastructure. Currently, there are only 10 airports in India which contribute chiefly to air cargo operations, rest still require upgradation in order to manage hassle-free cargo operations. A report by aviation consultancy group Centre for Aviation (CAPA) in 2018 estimated that India’s airports would exceed structural capacity by 2022.

Government’s involvement

According to Jayant Sinha, Minister of state, Civil Aviation, the government has been working towards improving airport capacity by reviving defunct airports and thereby boosting regional connectivity under the much-lauded UDAN scheme. He has earlier been quoted as saying that India will require 150-200 airports by 2035.

Sinha says that the government is looking at a six-year plan to upgrade airport infrastructure, given that India’s metro airports are bursting at their seams, and are struggling to cope with the crush of passengers and choked runways. The upgrade is almost imperative as Indian airports are expected to cater to a billion footfalls over a decade from now, and airlines have announced mega aircraft induction plans that stretch up to a decade, the minister informed.

ACAAI 2019 - CargoConnect

39

special feature Looking at the passenger growth, the size of the Indian aviation market is expected to grow to about 600 million air passengers annually over 10 to 12 years from now. This would mean a billion footfalls at the airports. The government needs to work with a strategy spread over a period of up to six years to ensure that capacity does not become an impediment to the growth in aviation in India.

Sinha says, “We are looking at Juhu as an alternative and shift out general aviation traffic from the current airport in Mumbai. Between the second and fourth year, we will be carrying out upgrades at airports like Delhi, airports in the northeast and others. Even as we do this, we will keep awarding new airport projects, which will be available post the fourth year onwards.�

According to Sinha, the government has already awarded Goa while Navi Mumbai airport is likely to be awarded soon. The ministry’s plan has come as a respite for airlines in India, which have plans to induct over 500 aircraft in their fleet through a 10-year period, and have started complaining about saturating airport capacity across the country.

Public-private Partnership (PPP) model has brought significant upside for investors and government alike, the Mumbai and Delhi airports have cumulatively till date paid about staggering INR 30,000 crore to AAI as revenue share.

Some airlines, however, expressed fears that saturating airport capacity may impact their plans. New private airports came up and state-owned AAI also improved its infrastructure and things improved and airlines grew.

40 CargoConnect - ACAAI 2019

According to a vision document released by Ministry of Civil Aviation India (MoCA), India

may have around 190-200 operational airports by 2040.

The airport sector has seen an investment in excess of US$ 6 billion over the last 15 years.

The development of PPP airports was funded by shareholder's equity, commercial banks borrowings, FDI and refundable deposits from commercial partners.

Expansion plans might get impacted if airport infrastructure does not catch up with growth

Investments and Financing

Given the shoddy nature of airport projects and the long payback period, engaging the private players was perceived as the only prudent solution. The PPP experiment used for both Greenfield and Brownfield airports has yielded rich dividends to the government

and the country at large.

The airport sector has seen an investment in excess of US$ 6 billion over the last 15 years. The development of PPP airports was funded by shareholder's equity, commercial banks borrowings, FDI and refundable deposits from commercial partners. Capital investments by AAI have been primarily through own sources and government support.

The AAI is looking to create separate profit centers for all individual airports and hive them off as subsidiary companies on a case-to-case basis, for the purpose of entering into commercial arrangements or joint ventures with private parties. Where airport operators desire private participation in their existing airports, all patterns of ownership and management would be open to them as elucidated in the preceding section. No Government approval would, however, be required.

Funding through external assistance, external commercial borrowings, loans and equity has been negligible. The allocation of budgetary grants is limited to certain airports in remote and inaccessible areas. Considering the astronomical sums which seem to be required for modernisation and upgradation of existing airports and for the new airports at Mumbai (`10,000 crores), Bangalore (`1,600 crores), there has to be a clear privatisation of projects so as to utilise state resources in the most optimal manner. Further, the financing strategies will have to be looked at from a thoroughly novel standpoint.

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Steps towards a consolidated future Public-Private Partnership (PPP) model has brought significant upside for investors and government alike,

the Mumbai and Delhi airports have cumulatively till date paid about staggering INR 30,000 crore to Airport Authority of India (AAI) as revenue share.

An Airport Restructuring Committee within the MoCA is identifying existing airports, in respect of which private sector involvement for development and upgradation of infrastructure is desired. It is also preparing a shelf of projects in respect of Greenfield airports.

Taking the leap ahead

Both the reasons of bridging the yawning gap in resources as also to bring in greater efficiency in management of airports, the participation of private parties (including foreign ones) is a must, and the government is expected take all possible steps to encourage such participation.

While an Airport Restructuring Committee within MoCA is identifying existing airports, in respect of which private sector involvement for development and upgradation of infrastructure is desired. It is also preparing a shelf of projects in respect of Greenfield airports. The pre-feasibility reports are being made available to private investors.

According to vision document 2040 released at Global Aviation Summit 2019, India will undertake significant reforms to place itself among

42 CargoConnect - ACAAI 2019

There are only a very few airports with the adequate provisions and facilities to enable the seamless movement of cargo across the border. Deficiencies with regard to various operations like ground handling facilities, air navigation system, cargo security, night landing systems, cargo handlings, etc. are yet to be overcome to provide a favourable space for air freight players. All these cargo operations demand a consolidated infrastructure in place.

Air Traffic Services

AAI will provide Air Traffic Services over the Indian airspace and adjoining oceanic areas in accordance with the International Civil Aviation Organisation (ICAO) standards and recommended practices. New CNS/ATM systems will be introduced on a priority basis in terms of AAI's plan as well as ICAO's regional plan. These will ensure a total coverage of the airspace in India.

Airport Security

Aviation security is now increasingly relying on biometrics, big data, artificial intelligence (AI) and behavioral analysis, etc.

This helps them reduce the workload of individual security staff and focus on high risk passengers and cargo.

Ground Facilities

Speed is the essence of air transport. AAI will set standards of performance in various areas of passenger and cargo handling, so that both

ICAO standards as well as comparable standards at similar airports around the world, are achieved.

Cargo Facilities

Infrastructure relating to cargo handling like satellite freight cities with multi-modal transport, cargo terminals, cold storage, automatic storage and retrieval systems, mechanised transportation of cargo, computerisation and automation, etc. will be set up on top priority basis. Such facilities have to come up at smaller places too.

Commercial Facilities

Across the world, the trend is towards a very high percentage, ranging from 60 to 70 per cent, of the total revenue of airport operators being generated from nonaeronautical sources at major airports. In India, although these services are even now provided by private agencies, the comparable figure for AAI at international airports is just 22 per cent. There

the top 10 nations. Over the next two decades, around 80-90 new airports are likely to come up under the Nabh Nirman initiative.

A few airports which are already under construction are Rajkot Greenfield International airport, Gujarat; Noida International Airport at Jewar, Noida; Mopa International Airport, Goa; Orvakal Airport in Kurnool of Andhra Pradesh; Chhatrapati Sambhaji Raje Airport, Pune; and Hollongi

will be a major thrust towards increasing the share of commercial revenue emerging from non-aeronautical sources.

This will help in optimal exploitation of the full commercial potential of airports and make many airports not only viable but capable of generating surpluses for further expansion and development.

In keeping with the ICAO standards and recommended practices and the requirements of upgrading airports to the level of international and regional hubs, detailed master plans for the development of all selected airports will be prepared or revised by the operating agency. All future upgradation and modernisation will have to be normally done in accordance with the master plans. If there is a deviation from the master plan, it will be approved by the Board of Directors of the operating agency and the statutory government agency designated for the purpose.

Airport in Arunachal Pradesh.

Government is ensuring that legislative and administrative mechanisms for speedy acquisition of land are devised. MoCA should also coordinate with the state governments in order to ensure provision of all these essential services and basic facilities. The state civil aviation secretaries will act as coordinating officers for single-point liaison with all the state-level departments and authorities. CC

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A new dawn in airport infrastructure

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feature

Favourable government schemes such as UDAN and 100 per cent FDI in ground handling has encouraged and enabled foreign investors to enter the Indian market. Besides, as E-commerce industry in India grows, transportation of cargo, especially by air, will swell in the future. These factors together will lead to growth in demand for ground handling services. In this feature, we talk about the present scenario of India’s ground handling industry, analyse its past and potential future.

CC Bureau

Ground Handling Needs fast-track

policy implementation

44 CargoConnect - ACAAI 2019

E

fficient loading, unloading and handling of cargo at the airports and cargo terminals ensuring smooth supply chain operations and further resulting in shorter turnaround time at the airports, is definitely what the air cargo sector strives for. Ground handling – a core component of the air cargo sector, is considered critical for the success of air cargo operations.

With the Indian air cargo industry experiencing a strong growth over the past few years, professional and specialised ground handling services have become significant and has witnessed positive outlook by the airlines and airports across India. Even the Ministry of Civil Aviation indicating the importance of ground handling in the air cargo sector, revised the ground handling policy last year mandating that airports

feature should have at least three certified agencies providing proficient ground handling services. According to the reports, ground handling in India is expected to grow at a positive double digit CAGR during FY’2019 - FY’2025.

It predicts that the future catalysts will be the entry of new domestic and foreign stakeholders in the airport ground handling services market and airlines increasing their fleet sizes and completion of construction of new airports.

Talking about the ground handling business in India which is on a good growth path although fragmented with lesser number of players, Yogendra Tomer, President, Aroon Aviation Services says, “Key factors determining the growth of ground handling in India will be the entry of new domestic and foreign stakeholders in the airport ground handling services market, airlines increasing their fleet sizes and upgrading of Brownfield and construction of Greenfield airports in the country. The Indian ground handling services market is fragmented with limited number of stakeholders. Because of that, in my view, the government should proactively allow the entry of more stakeholders in the ground handling sector depending upon the passenger and cargo handling capacity at airports and number of flights operated via those airports, to create a competitive scenario in the market.”

According to Tomer, revenue from passenger and ramp handling services has accounted for a higher share in the market due to the large number and higher frequency of passenger flights in India.

Murali Ramachandran, CEO- India, Celebi Aviation, stresses on the other crucial yet neglected side of the s ec tor. Ra mac ha nd ra n ex pa l i n s, “Ground handling is a capital-intensive business and requires a highly-trained and skilled-workforce due to the sensitive nature of this business. Ground handlers bring in a one-stop service proposition to the airlines and implements best practices from service and safety perspective which is very critical to reduce cost exposures in this sector.

This also allows airlines to focus on

their core business of flying. With the new policy in place at most gateway airports, the use of contract manpower has substantially reduced. Unfortunately, due to various reasons, the policy is yet to be implemented at many airports. At such airports, the domestic airlines continue to use outsourced manpower companies. Apart from being cost averse, this is also a model of concern from the safety, security and service quality perspective.”

Challenges in India’s ground handling sector Scattered and inefficient ground handling operations at the airports are the reason why airports are unable to better manage the utility of the premium spaces within the airport premises.

Ramachandran stresses that a major challenge faced by the industry is the lack of interest of the domestic airlines in outsourcing ground handling services to certified service providers. This is resulting in the shortage of trained staff on the ground and also inhibits the few companies serving the Indian market to present a strong business case in their favour. Additionally, Ram-

ground handling policy in India prohibits airlines from using outsourced manpower taken from non-bonafied and non-certified contractors. The airlines have been given a choice to either self-handle operations through its employees who are assigned such roles or engage with certified firms like us.”

Some of the domestic airlines in India choose to self-handle their flights. Domestic airlines need to realise the cost benefits and other value propositions/ benefits of outsourcing ground handling services to certified players. Although, in the present scenario, some major players do outsource.

According to Tomer, "As per new ground handling policy, the third party manpower support to airlines for ground handling services has been withdrawn which has resulted in shortage of trained manpower and consequently reduced job opportunities in the related field. Therefore, the new ground handling policy, in my view, should be reviewed and allow third party to provide trained and skilled manpower to support ground handling and airlines operation at the airports.

This will generate additional revenue for airport operators and help in intro-

Scattered and inefficient ground handling operations at the airports are the reason why airports are unable to better manage the utility of the premium spaces within the airport premises. achandran says that the sudden rise in air traffic coupled with increasing demands and expectations of passengers from their travel experience is posing serious challenges like apron congestion, pressure to provide automated terminals, hassle-free security checkins, along with efficient passenger, cargo and luggage management transportation systems. These challenges are making the ground handlers continuously re-structure their business models and adapt to the requirements of the changing market.

Further, Ramachandran adds, “The

ducing competitive rates for ground handlers and airlines which eventually will reduce the cost of operation. It is also suggested that Micro Small & Medium Enterprises (MSME) should be given fair opportunities to work with ground handling agencies for their growth perspectives and the government should also support these players so that it is a win-win situation for all."

While ground handling companies are quite hopeful that domestic airlines in India will gradually understand the need to partner with certified ground handling players, Ramachandran feels ACAAI 2019 - CargoConnect

45

feature the implementation of a dedicated policy will make it mandatory for the airlines to either partner with ground handling companies or expose themselves to high levels of investment and large workforce requirements.

Ground handling business in India- 2019 - 2025 Based on market reports, the Ground Support Equipment (GSE) business is expected to grow from US$ 7.5 billion in 2019 to US$ 9.7 billion by 2025, at a CAGR of 4.45 per cent from 2019 to 2025. Some of the factors that are expected to fuel the growth of the ground support equipment market is rising demand for electric ground support equipment, increasing warehouse operations at airports, and ongoing expansions of airports to cater to the rising global air passenger traffic. Increasing demands of warehousing at airports in the form of Air Cargo Logistics Centers (ACLC) or as a Cargo City are also expected to fuel growth of the market. Other growth factors of the ground handling business are due to increasing number of tourists in India and consolidation of air cargo capacity at airports. All of these are supported by technological improvements in GSE. The GSE market is expected to be led by the mobile segment from 2019 to 2025.

Mobile GSE can be moved around airports without any restriction and can be used to service aircraft parked at remote bays. The rise in capacity expansions of

Yogendra Tomer

President, Aroon Aviation Services

The Indian ground handling services market is fragmented with limited number of stakeholders.

Because of that, in my view, the government should proactively allow the entry of more stakeholders in the ground handling sector depending upon the passenger and cargo handling capacity at airports and number of flights operated via those airports, to create a competitive scenario in the market.

Murali Ramachandran CEO- India, Celebi Aviation

A major challenge faced by the industry is the lack of interest of the domestic airlines in outsourcing ground handling services to certified service providers. This is resulting in the shortage of trained staff on the ground and also inhibits the few companies serving the Indian market to present a strong business case in their favour. existing airports and adoption of automation technology has led to increased aircrafts and cargo movements which eventually have contributed to increased demand for mobile GSE. GSE operators prefer to operate cost-effective autonomous equipment such as semi-autonomous pushbacks, autonomous passenger boarding bridges, autonomous aircraft taxiing, and driverless bus and baggage tractors in the aviation sector.

Similarly, Taxibots are being used worldwide to save precious fuel. 40 TaxiBots are slated to be operational at Indian airports in 4 years. Mumbai airport is next in line after New Delhi airport with Bengaluru airport to follow. Introduced

by KSU Aviation, TaxiBots were deployed at Delhi airport in October 2018.

The runway 2019 will witness Indian aviation scale new peaks with the government aiming to take UDAN international and planning to construct over 100 new airports.

In a rapidly evolving aviation landscape, the importance of efficient and profes-

46 CargoConnect - ACAAI 2019

sional ground handling shall only grow as citizens will demand better managed airports that offer a safe and secure flying experience. Therefore, it is imperative upon the centre to create an enabling ecosystem that nurtures the evolution of a professional and responsible ground handling industry in India.

Analysts at Ken Research in their latest publication ‘India Ground Handling Services Market Outlook to 2026’ believe that new ground handling companies should target airports in tier II cities of India and increase their focus on security and customer centricity in service provision to gain larger ground in the market.

Besides, in a laudable move towards ensuring better and safer airports in the country, Airports Authority of India (AAI) in 2018 invited bids for issuing licenses to agencies to provide ground handling services at 93 airports under its control. As per the bidding process, the service provider that quotes the highest royalty that it can pay AAI in lieu of carrying out ground handling services at an airport will be the awarded the Ground Handling (GH) license. CC

SURECOM MEDIA

feature

Air Connectivity

crucial to enhancing India’s global participation 48 CargoConnect - ACAAI 2019

feature

Today, there is a growing understanding amongst governments worldwide that air connectivity is an asset improving the global competitiveness of cities, regions and countries. Similarly, the importance of air connectivity to India’s economic prosperity is emerging as a subject of paramount importance to the country’s government and stakeholders who are working together towards ensuring that efficient policies are implemented and right steps taken, which are critical factors to create a wide potential and place the country as a cargo hotspot within the air trade galaxy.

Upamanyu Borah

D

rive Insight

In January 2019, India and Asean countries decided to deepen cooperation in the area of aviation and enhance air-links for better connectivity within the region.

The tie-up will work towards convening of air services consultations by the Asean-India Working Group on Regional Air Services Arrangements and the establishment of air transport cooperation on technical, economic, and regulatory matters between Asean and India. Well, this is not the start.

Budget carrier – IndiGo whose international operations are confined to the Gulf and Southeast Asia, has finally, started direct flights to China starting September 15. Air China, China Southern, China Eastern, China Airlines and Shangdong Airlines currently flies to India with the China Southern operating the maximum 14 flights per week of the total 42 seats a-week allocated to them. Apart from the state-owned Air India, SpiceJet, and Jet Airways, which is now grounded, was the other carrier flying to China from India through its code-share partner, China Eastern Airlines.

Besides, as part of expansion plans, AirAsia India is likely to launch international services later this year with flights to destinations in South East Asia, including Malaysia and Thailand. Air India has also announced that will begin

services on Mumbai-Nairobi, AmritsarDelhi-Toronto, and Delhi-Chennai-Bali routes starting September 2019. Meanwhile, GoAir is also expanding its operations with five new international services to the Gulf region, two to Bangkok and eight new domestic services. All of these developments will strive to establish and promote tourism, trade, and enhance greater connectivity.

According to global airlines’ body IATA, India’s air connectivity has grown the fastest in the last five years and there is ‘strong growth’ ahead though there are infrastructure challenges. An analysis by IATA showed that air connectivity grew the fastest at 114 per cent in India during the fiveyear period from 2013-2018.

Airlines/Freighters attitude towards India

Lured by the fast-growing cargo operations, leading freighter companies have joined the race to enter India in a big way. Existing cargo airlines are also busy augmenting their capacities seeing the growth in international air cargo over the last few years. The domestic air freight demand which is expected to touch 1.1 million tonne by the fiscal 2025 at a compounded annual growth rate (CAGR) of 7-9 per cent propelled by rapidly growing E-commerce activity, increasing capacity and improving airline connectivity to smaller cities, is also a major attraction for them.

Freighter majors such as Lufthansa, ACAAI 2019 - CargoConnect

49

feature

We have had a strong revenue market share in India since 2016 with a total of 10 per cent. We believe, that with this growth Lufthansa Cargo would be the first choice in India when it comes to air freight. We have even contributed to the automobile industry of India which is the fastest growing. Additionally, we have and will provide flexible services in freight and cargo.

Peter Gerber

CEO, Lufthansa Group

India is still the major source of export products to Africa, and the volume is expected to grow in the years ahead.

Ethiopian Airlines is offering its dedicated freighter flights and belly capacity of its passenger aircrafts for accommodating adequate air cargo shipments from India.

Ethiopian Cargo’s current annual uplift from India is around 23K tonnes.

Fitsum AbadI

Managing Director, Ethiopian Cargo & Logistics Services

50 CargoConnect - ACAAI 2019

Emirates SkyCargo, Cathay Pacific, Gulf Air Cargo and SriLankan Cargo are scaling up capacity in India.

Peter Gerber, CEO of Lufthansa Group describes the Indian freight market demand saying, “We have had a strong revenue market share in India since 2016 with a total of 10 per cent. We believe, that with this growth Lufthansa Cargo would be the first choice in India when it comes to air freight. We have even contributed to the automobile industry of India which is the fastest growing. Additionally, we have and will provide flexible services in freight and cargo.”

In October, 2018, Turkish Cargo initiated cargo flights to Bangalore, the capital of the state of Karnataka and the third largest and crowded city in India.

Besides, Saudi Airlines Cargo Company (SACC) has offered additional cargo capacity of 60 tonnes a week in belly hold on the daily operation of Saudi Arabian Airlines passenger Airbus A330 flights to Calicut International Airport (CCJ) in the Indian state of Kerala, starting December 2018. The company also resumed its freighter flights to Mumbai with a weekly freighter flight effective first of April 2019, aiming to meet the growing demand for cargo operations and stimulate trade movement to/from India. British Airways World Cargo (BAWC) has increased its belly capacity to India in its direct B777 flights between London Heathrow and Hyderabad. Ethiopian Airlines has added cargo and passenger service to Ahmedabad and Chennai and increased its capacity to Delhi as a part of its expansion in India.

India’s domestic airlines are quite behind in the air cargo space space.

Although, GoAir and IndiGo have announced plans to launch dedicated cargo operations, SpiceJet’s cargo division, SpiceXpress became the first airline to operate freighter services between Guwahati and Hong Kong on 19 January 2019. Ironically, the domestic dedicated freighters fleet currently stands at just seven planes compared with about 680 passenger aircraft. In the domestic air cargo space, besides Blue Dart Aviation which flies to seven Indian cities, Quikjet Airlines operates with flights to Bangalore, Hyderabad Chennai and Kolkata.

Market Forecast

The estimated `600-700 crore domestic dedicated air freighter market stood at 0.8 million in 2019, logging a CAGR of 8 per cent in the last five fiscals. Shorter lead distances compared with global freighters, lack of significant niche cargo, and intense competition from airlines which also carry cargo in aircraft belly are expected to continue restricting growth of domestic dedicated freighters.

In terms of revenue per tonne kilometre, dedicated freighters have just about 15 per cent share of the domestic air freight market, compared with 50-55 per cent globally. This is because while their global peers move cargo across countries/ continents, those in India operate on shorter distances and lead times, leading to competition from other modes of transport.

However, cargo capacity of airlines which is expected to grow at a higher CAGR of 13-15 per cent, given the impending fleet expansions, will further shift the market towards airlines.

feature

Talking about their expansion of operations in India, Fitsum Abadi, Managing Director, Ethiopian Cargo & Logistics Services says, “India is still the major source of export products to Africa, and the volume is expected to grow in the years ahead. Ethiopian Airlines is offering its dedicated freighter flights and belly capacity of its passenger aircrafts for accommodating adequate air cargo shipments from India.” Ethiopian Cargo’s current annual uplift from India is around 23K tonnes, and the products vary from a wide range of temperature sensitive such as pharmaceuticals and perishables to general cargo such as chemicals, textiles, garments, engineering goods, auto spare parts, etc. “For 2019, with keeping India in the overall scheme of things, we have planned to commence new freighter destinations to Bandaranaike International Airport (CMB) in Sri Lanka, Incheon International Airport (ICN) in South Korea, and Hazrat Shahjalal International Airport (DAC) in Bangladesh,” says Abadi.

As one of the fastest growing economies, India is definitely a market we have focussed on, says Alaina Shum, General Manager- Aviation Logistics, Airport Authority Hong Kong. According to Shum, “Currently, there are over 170 flights operating weekly between HKIA and various destinations in India. HKIA will continue to enhance its capacity and capability in handling high-value added, temperature controlled cargo as a key business development strategy and support China-India route development.”

“India is Changi’s fifth largest cargo market, and was our fastest growing

market with an 8 percent growth yearon-year,” says Lim Ching Kiat, Managing Director for Air Hub Development, Changi Airport. Singapore is currently connected to 18 cities across India, including three new links - Pune, Vijayawada, and Guwahati – that were established in 2018. Looking ahead, Kiat says, there is high growth potential for India due to its expansion of production activities. “With the boom in E-commerce and the rise of pharmaceuticals, India is regarded to be an emerging logistics hub. Due to our strategic geographical location and extensive air connectivity, Singapore is well positioned to be a conduit of South Asia-Southwest Pacific and South Asia-Southeast Asia cargo flows,” further, says Kiat.

Liege Airport of Belgium has made a lot of efforts to establish itself as a gateway airport to India, says Steven Verhasselt, VP- Commercial, Liege Airport. “We believe in the Indian market; and the ‘Make in India’ policy, combined with the E-commerce boom, will definitely require more freighter capacity into this belly-hold dominated airfreight market. We are looking forward to direct connections between India and Liege.

Until then, we know a lot of Indian cargo is already arriving and departing from Liege through our partners such as Qatar Cargo,” expresses Verhasselt.

As one of the fastest growing economies, India is definitely a market we have focussed on. Currently, there are over 170 flights operating weekly between HKIA and various destinations in India.

HKIA will continue to enhance its capacity and capability in handling high-value added, temperature controlled cargo as a key business development strategy and support China-India route development Alaina Shum

General Manager- Aviation Logistics, Airport Authority Hong Kong

How can India facilitate connectivity growth?

With the exception of external factors such as geography that are beyond control, stakeholders have the ability to influence many of the factors that enable achievement of greater air connectivity.

India can achieve greater air connectivity by focussing on the development of aviation infrastructure (such as airports) – attracting new investors and ensuring that enough capacity is created to accommodate the demand. Airlines need to continue establishing and building up their network to support linkages with the rest of the world.

Besides, stakeholders should develop regulatory and economic frameworks which reflect the characteristics and needs of India, whilst at the same time, fosters air transport growth.

In January 2019, the centre unveiled

India is Changi’s fifth largest cargo market, and was our fastest growing market with an 8 percent growth year-onyear. Singapore is currently connected to 18 cities across India, including three new links - Pune, Vijayawada, and Guwahati – that were established in 2018. Looking ahead, there is high growth potential for India due to its expansion of production activities. lim Ching Kiat

Managing Director- Air Hub Development, Changi Airport

ACAAI 2019 - CargoConnect

51

feature

We believe in the Indian market; and the ‘Make in India’ policy, combined with the E-commerce boom, will definitely require more freighter capacity into this bellyhold dominated airfreight market. We are looking forward to direct connections between India and Liege. Until then, we know a lot of Indian cargo is already arriving and departing from Liege through our partners such as Qatar Cargo.

Steven Verhasselt

VP- Commercial, Liege Airport

The vision of making air cargo transportation available to the masses at an affordable cost, and connecting every village to the national and global supply chain will provide an opportunity to all stakeholders to collaborate and innovate and to make a quantum leap to propel India’s air cargo sector to the next level and beyond.

Tulsi Nowlakha Mirchandaney

Managing Director, Blue Dart Aviation

52 CargoConnect - ACAAI 2019

its much-awaited draft National Air Cargo Policy, which seeks to make India among the top five air freight markets by 2025, besides creating air transport shipment hubs at all major airports over the next six years. The policy will encourage code sharing/inter-line agreements between foreign and Indian carriers. As per the document, the potential in the new markets needs to be explored with long-term infrastructure creation in order to sustain cargo growth in the next 10-15 years at least.

The cargo policy also seeks to establish agreements between national carriers/ freighters and integrators to improve domestic connectivity as well as encourage the establishment of agreements between national and international carriers/freighters and other airline operators to provide access to key global cargo hubs.

Tulsi Nowlakha Mirchandaney, Managing Director, Blue Dart Aviation says that the vision of making air cargo transportation available to the masses at an affordable cost and connecting every village to the national and global supply chain will provide an opportunity to all stakeholders to collaborate and innovate and to make a quantum leap to propel India’s air cargo sector to the next level and beyond.

“There would be opportunities in infrastructure, inter-modal transportation across various modes, service innovation, and development of human resources and systems required for cutting-edge service delivery. The policies need to be fleshed out and executed by a steering body within given timelines,” further says Mirchandaney.

The underlying message, Mirchandaney observes, is that, air cargo must

be available at an affordable cost with a high standard of service quality, and to make this possible, all stakeholders need to be committed to the larger vision beyond their individual interests, as it would benefit us all. While there are lessons to be learned from successful low-cost passenger airlines, air cargo need to innovate its own model in India, given our advantage of size, geography and demographics.

Future Forward

India became the world’s fastest growing domestic travel market for the 22nd time in a row recording a 26.6 per cent year-on-year growth in January 2017, according to IATA. India is witnessing a high-growth trajectory and set to become the third-largest aviation market in the world in terms of passengers by 2026. IATA also expects air passengers to double from 3.8 billion in 2016 to 7.2 billion by 2035.

All this augurs well for India and its growing domestic passengers. In fact, India replaced Japan to become the largest domestic aviation market globally.

India recorded a total of 100 million domestic flyers in 2016 as compared to 97 million people who travelled by air in Japan during the same period.

Recognising the growing importance of the aviation sector, the Government has taken all possible measures to improve infrastructure and regional air connectivity in the country. The UDAN scheme seeks to promote regional connectivity by serving the un-served and under-served airports. Connecting Tier-II cities, pilgrim towns and historic places with the wider air routes is important for boosting tourism and business travel.

While developing no frills and Greenfield

feature airports, augmenting existing capacities, creating synergy between scheduled and non-scheduled airlines for better penetration and connectivity through collaborative efforts of the State and Central Governments is needed.

India’s air cargo industry has been growing steadily over the past few decades. The domestic cargo traffic registered a compound annual growth rate (CAGR) of 6.6 per cent over the period from 2007 to 2018 while international cargo traffic grew at 5.4 per cent during the same period. IATA expects the country’s air cargo to grow at 9 per cent over the next few years. Huned Gandhi, Managing Director, Dachser India says, “The country’s air freight growth has been the fastest in the intra-Asian lanes. Today, there are many freighter operators serving the Indian market without being swayed by temporary headwinds, rather focussed on the long term growth potential of India.”

Globally, the air transport industry is highly dynamic and the story is no different in India. As markets evolve

and customer demand changes, air cargo operators across the industry need to constantly review and update their operations and product offering to ensure that they continue to meet the market needs. Mirchandaney says, “Simplification, affordability and automation of the end-to-end supply chain processes will drive the undercurrents of the air cargo market in India.”

In the next five years, Gandhi believes, India will achieve top rank for global air freight growth, driven by higher efficiency resulting from improved processes backed by IT, greater reforms to promote exports and improved infrastructure providing the much needed tail wind for growth.

With above, a clear economic vision and a great system in place to tap into the huge potential that the Indian market offers, the country will emerge as an aviation hub not only in terms of increased air connectivity but also in terms of Maintenance, Repair and Overhaul (MRO) facilities and setting up of ancillary units. CC

India’s air freight growth has been the fastest in the intra-Asian lanes. In the next five years, the country will achieve top rank for global air freight growth, driven by higher efficiency resulting from improved processes backed by IT, greater reforms to promote exports and improved infrastructure providing the much needed tail wind for growth.

Huned Gandhi

Managing Director, Dachser India

ACAAI 2019 - CargoConnect

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feature

Leveraging the ‘Emerging Air Of late, alliance between some of the major foreign airlines and national flag carriers has catapulted the growth prospects of the country’s air freight sector. Despite the misgivings related to infrastructure, the industry continues to remain the world’s leading marketplace for domestic and international players.

With a growing fleet of airlines flying into the Indian market, it ought to be in the interest of all the players to make the best of the opportunities close at hand.

Saurabh Sharma

54 CargoConnect - ACAAI 2019

feature

potential of trade Partners’

A

s air transport has a vital role to play in cross-border trade, the share of domestic carriers in air cargo movement has direct bearing on the growth of the country’s economy. The ever-evolving nature of India’s export and import throws the opportunity for air freight market to call the shots in international trade as air trade contributes about US$ 35 billion annually to India’s GDP. For almost a decade, Asian market has been witnessing a dominating share of exports from India but it has fallen from 48.52 per cent in 2014-15 to 47.62 per cent in FY201819. While North America’s share of exports to the Asia market increased from 18.16 per cent to 19.49 per cent and Europe’s from 15.31 per cent to 17.9 during the same period. Monitoring

the trends of international trade is the only way out to find the vista in global air freight market.

Amidst growing concerns about the trends in India’s export growth over the coming months due to perceptible signs of a cooling global economy is an unexpected area of cheer. Dynamics of India’s trade with its largest trade partner — China — are showing surprisingly good results in the current fiscal.

Current Scenario

Boeing’s 20-Year Forecast heralded good omens for the Asian air freight market, foreseeing global air cargo at 509 billion Revenue Tonne Kilometers (RTKs) by 2035 which is twice of what was seen in 2015. At an annual average rate of 4.2 per cent, Asia will lead the growth, with domestic China, intraAsia, and Indian market expanding at the highest rates of 6.2, 5.5 and 6.7 per cent per annum respectively.

ACAAI 2019 - CargoConnect

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feature Cargo handled at Indian airports has grown discernibly during the period 2013-14 to 2017-18. According to the report by Ministry of Civil Aviation (MoCA), it has accelerated sharply and ascended with a CAGR of 10.0 per cent.

International cargo comprises of 60 per cent of total air cargo tonnes handled in India and grew at 15.6 per cent during 2017-18. Domestic express industry, a key constituent of the Indian express industry, is estimated to be worth INR 17,000 crore. International express is estimated to contribute INR 5,000 crore (23 per cent by value) to the Indian express industry. Transshipment cargo which constitutes about 60-70 per cent of total volumes handled by some of the leading global airports is still quite low in India. of domest ic carriers in international freight business, which up t i l l now shows a very bleak figure as chief portion of cargo is still carried by global freighters owing to the high fuel cost and infra-

The ever evolving nature of India’s export and import throws the opportunity for air freight market to call the shots in international trade as air trade contributes about US$35 billion annually to India’s GDP. Trade Talks

As United States (US) followed by United Arab Emirates (UAE) has surpassed China in the total cost of cargo transported by India in FY2018-2019, it makes a compelling case of business for air carriers operating across the country beyond the subcontinent. Applying a continental lens, almost half (49.3 per cent) of Indian exports by value were delivered to fellow Asian countries.

Another 19.3 per cent was sold to European importers while 18 per cent went to North America, a smaller percentage went to Africa, Latin America excluding Mexico but including the Caribbean and then Oceania led by Australia.

The collaboration of a bevy of foreign airlines, keen to commence their operations in India has lifted the hopes

56 CargoConnect - ACAAI 2019

Actually four 777 freighters will come during the year (2019); that will allow us to add frequencies to destinations we already serve, such as India, Japan and the US - routes where customers really seek more capacities. That’s good news for our customers, I guess.

Dorothea von Boxberg CCO, Lufthansa Cargo

structure constraints in India.

Talking about the global network spread Rajesh Menon, Regional Head of Cargo – South Asia, Middle East & Africa at Cathay Pacific Airways asserts,” The Cargo division for Cathay Pacific is one of the most important business units for Cathay Pacific. Our performance for the Cargo business, particularly in India has been healthy. We have recorded a 2.2 per cent tonnage growth for exports in the year 2019. In fact, owing to the increase in demand in the region, we have deployed ad-hoc freighters on timely basis to meet our customer’s needs.”

“Trade between South Asia and East Asia are expanding at a rapid pace.

In fact, according to Boeing’s World Air Cargo Forecast 2018–2037, India is the largest air cargo market in the South Asian region and accounts for 65 per cent of the international trade. From India, our trade lanes to the North East and South East Asian countries are the top contributors, and our key destinations are Tokyo, Seoul, Osaka, Singapore and Hanoi. We see a large movement of shipments to these ports and only expect it to grow in the future,” continues Menon.

Apart from Asian airlines, European carriers are also showing the inclination to expand their network in India and the APAC region. India is among the three markets that Lufthansa Cargo

feature is likely to increase frequencies when the cargo division of the German carrier inducts four brand new Boeing 777 freighters during the course of 2019.

Dorothea von Boxberg, CCO, Lufthansa Cargo informs, “Actually four 777 freighters will come during the year (2019); that will allow us to add frequencies to destinations we already serve, such as India, Japan and the US - routes where customers really seek more capacities. That’s good news for our customers, I guess.”

The recent announcement made by United Parcel Service (UPS) about the routing of its latest freighter aircraft from the fleet of Boeing 747 – 400 /-8 and Boeing 767 at Delhi International Airport has again opened the vistas for business by providing faster access to markets in the Europe and US. The

Our performance for the Cargo business, particularly in India has been healthy. We have recorded a 2.2 per cent tonnage growth for exports in the year 2019. In fact, owing to the increase in demand in the region, we have deployed ad-hoc freighters on timely basis to meet our customer’s needs.

Rajesh Menon

Regional Head- Cargo – South Asia, Middle East & Africa, Cathay Pacific Airways

Boeing 20-Year Forecast heralded good omens on digital developments, and improving infrastrucfor Asian air freight ture. Alongside initiatives that market, foreseeing support logistics and government regulations have all contribglobal air cargo at 509 uted to the growth in the industry billion Revenue Tonne and will continue to do so. With the Kilometers. simplification and modernisation of flights will similarly support imports from Asia due to its origin in Shenzhen via Bangkok before landing into Delhi.

This plane is part of UPS’s investment of adding 10 million pounds of new lift capacity globally – the largest current expansion by any carrier.

Pilot Policies

It has been realised that that the focus on improvement in the Ease of Doing Business in India coupled with landmark Government of India initiatives like ‘Make in India’, ‘Digital India’, ‘National Air Cargo Policy (NACP)’ and ‘Open Sky Policy’ in air transportation are contributing to facilitate the accelerated growth in air cargo.

Menon recognises and applauds the government’s several initiatives to support and develop the Indian air cargo sector. “There has been a strong focus

58 CargoConnect - ACAAI 2019

export and import processes, introduction of several provisions that accelerate clearance of goods along with seamless cooperation between the shippers and customs have helped not only us but also the entire sector, explains Menon.

Globally, air transport is a highly dynamic industry and thus is subject to many unforeseeable adversities occasioned by economic, strategic or cultural differences between various countries. As markets evolve and customer demands change, air cargo operators must constantly review and update their operations and product offering to ensure that they continue to meet the market need. Accordingly, MoCA has now articulated its vision for the comprehensive National Air Cargo Policy in the sections below which support the sustainable acceleration of the air cargo industry in India and ensuring global competitiveness with performance benchmarking and monitoring.

To ensure the seamless flow of cargo to all the perspective global markets, there are certain keys factors that government aims to latch on to:  The process to avoid the submission of paper documents shall not rely on physical signatures. Payments, communication, exchange of information, etc. to all occur digitally.  Leveraging India’s geographical location as a transit hub between Europe and South East Asia, and as a gateway to the South Asian region.  By reducing/removing trade barriers, the government aims to bring about policy to simplify the regulatory process.  Collaboration with global air carriers that will give thrust to the air cargo market in India.  Development of Trade Corridors with major international trading partners.

Future Trends

According to IATA figures released for the global air freight markets, even though there is dip recorded in the air cargo sector for the early months of 2019, the market is expected to steadily grow owing to factors such as strong demand for manufacturing exports, and increased penetration of advanced technologies. A tremendous increase in growth is expected in the industry owing to the E-commerce industry which is expected to boost the air cargo demand globally.

Emphasis should be to promote more domestic carriers in global trade.

Air cargo transportation between India and Southeast Asian countries has facilitated trade in parts and components.

To encourage production network, strong air connectivity between India and ASEAN is vital. More Indian and ASEAN airlines should be allowed in air cargo transportation between India and Southeast and East Asian countries.

Further, with technology and digitalisation as the drivers of future growth in air cargo, more and more airfreight processes continue to be automated and airports, airlines, forwarders and ground handlers have to work very closely to integrate the processes to save on time and costs. CC

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Adapting and innovating: Embracing the digital wave

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T

he key to success for air freight industry lies in innovation, particularly in IT, as a means to excel ac ro s s t he e nt i r e a i r freight value. It has been experienced that innovation today comes from niche IT providers, who are knowledgeable and flexible to the changes required. For decades, leading integrators have demonstrated the benefit that was generated with such an approach in terms of reducing data duplication, transparency, self-service kiosks and mobility solutions. Many industry players worldwide are eager to join this technology revolution. Today, government’s effort in bringing technology to the forefront is acknowledged while also being serious about information security.

As such, Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman recently unveiled two new IT initiatives – ICEDASH and ATITHI – for improved monitoring and pace of Customs clearance of imported goods and facilitating arriving international passengers by electronic filing of Customs baggage and currency declarations.

technology The government is also working on a common IT platform for stakeholders in the domestic air cargo segment. AAI Cargo Logistics and Allied Services Company (AAICLAS) has taken the lead in the Ministry of Civil Aviation’s initiative of forming a National Air Cargo Community System (ACS), a single window system for uniform interface between all the stakeholders of the air cargo community using international standards; a common information technology platform connecting all the various stake holders to streamline country’s air cargo industry on one common platform. A single window system for uniform interface between all the stak holders of air cargo community using international standards is highly desirable as in the current system the information exchange is many-to-many resulting in complex/ duplicate processes.

Bengaluru’s Kempegowda International Airport, meanwhile, has signed up Vision Box, a Portuguese company, to provide facial recognition technology services, according to a press release on the firm’s website. The initiative is part of the Ministry of Civil Aviation (MoCA)’s ‘Digi Yatra’ policy, which intends to offer air passengers a “seamless, hassle-free and paperless journey experience”. It was framed in August 2018. Biometric access system

The mandate of AAICLAS is to focus on cargo and increase the cargo handled by our airports using best practices and world class technologies.

In one such step, AAICLAS recently signed a License Agreement with Air-

With the AAI initiating a number of upgradation works-both for airports and airspace navigation--the technology to be used is also undergoing a phenomenal change.

ICEDASH is an Ease of Doing Business (EoDB) monitoring dashboard of the Indian Customs that will enable public see the daily Customs clearance times of import cargo at various ports and airports. With ICEDASH, Indian Customs has taken a lead globally to provide an effective tool that helps the businesses compare clearance times across ports and plan their logistics accordingly. With ATITHI, an easy to use mobile app, international travellers will be able to file the Customs declaration in advance. Travellers can use this app to file declaration of dutiable items and currency with the Indian Customs even before boarding the flight to India.

ports Authority of India (AAI) for Inline Hold Baggage Screening at Airports, wherein, AAICLAS will be carrying out hold baggage screening function under the control, supervision and administration of AAI at various domestic and international airports. This is in compliance with norms of Bureau of Civil Aviation Security (BCAS) ensuring safe and secure in-line hold baggage screening system. AAICLAS will first commence operations on standalone screening system at Kolkata, Chennai, and Ahmedabad and Calicut airports. Thereafter, in phased manner, will switch over to BCAS approve ILBS system at all airports in the country.

was first experimented at the Hyderabad airport in 2016. Last year, there were reports that state-owned AAI had chosen four airports - Kolkata, Varanasi, Pune and Vijayawada - to implement biometric-based self-boarding system.

Nonetheless, with the AAI initiating a number of upgradation works-both for airports and airspace navigation--the technology to be used is also undergoing a phenomenal change. The overall st rateg y is to move from ground-based to satellite-based navigation and getting the air traffic management more automated. CC

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Interview Kindly tell us about your freighters coming to India.

How much revenue does the Indian market contributes?

India contributes more than seven per cent to our overall cargo revenue and the number is growing each year. We have an extensive network in India with 28 freighters each week and belly-hold cargo services to thirteen passenger destinations. To better serve the Indian market, we have de-tagged all freighters since September this year. Therefore, our freighter destinations- Ahmedabad, Hyderabad, Mumbai, Chennai and Bengaluru will all offer incremental capacity. We will also upgrade our freighter capacity on many Indian destinations from the Airbus A330 freighter to the Boeing 777 freighter.

India is a power house of generic medicine manufacturing and exports more than 70 per cent to the WHO. Apart from this, we have seen an evolution of electronic exports from the country, says Guillaume Halleux, Chief Officer Cargo, Qatar Airways Cargo. In an exclusive interview with Ritika Arora Bhola, the air cargo expert talks about their prospects to take further hold of the Indian market.

Fully geared to cater to India’s growing demand Tell us about your specialised cargo segments and the kind of cargo moved in and out of the country.

We ship all types of cargo globally. Besides, we have dedicated products and services in place for special cargo. From India, there is a strong demand for pharmaceuticals, automotive spares, readymade garments, perishables, jewellery and we are also seeing a very strong rise in electronics. The ‘Make in India’ initiative that encourages manufacturing in India has further created new possibilities and will ensure more cargo verticals to India. It will also help transform the country into a global manufacturing hub.

And with our extensive network in India, we can help move Indian goods around.

Elaborate on the new freighter services started by the Qatar Airways Cargo in the recent years.

64 CargoConnect - ACAAI 2019

We are committed to our customers and are always looking for ways to help their business grow. One such initiative was offering reduced flight times and faster services through our transpacific freighter services. We commenced Boeing 777 freighters to Macau last year in October and introduced transpacific freighter services directly from Macau to Los Angeles and Mexico City. This was very much out-of-the-box but the market followed us.

In January this year, we added Guadalajara in Mexico as a stop on the transpacific route and also launched freighters to Almaty in Kazakhstan offering direct capacity for imports into Kazakhstan. Our recent addition was the commencement of twice-weekly Boeing 777 freighters to Singapore from Chicago. This service directly links USA with Singapore while also connecting Singapore via the transpacific route with North America.

In addition, since January 2018, we have introduced bellyhold cargo capacity to several passenger destinations including Penang, Canberra, Thessaloniki, Hatay, Cardiff, London Gatwick, Mykonos, Bodrum, Antalya, Malaga, Mombasa, Gothenburg, Da Nang, Esfahan, Izmir, Rabat, Malta, Davao, Lisbon and Mogadishu.

How has the Indian market evolved for Qatar Airways Cargo till date?

With 28 weekly freighters and belly-hold services to thirteen destinations, India remains an important market for us. India’s import and export activity has been on the rise. We have seen the evolution of electronic exports from the country. Amazon’s global selling programme ‘India to Global’ will see -commerce exports from India spiraling. The

With 28 weekly freighters and belly-hold services to thirteen destinations, India remains an important market for us. India’s import and export activity has been on the rise.

pharmaceutical industry has evolved rapidly making India one of the largest providers of generic drugs globally.

Over the years, India has developed export competitiveness in certain specialised products like agricultural produce, fishery and forestry products thus expanding its perishable exports market. As an example, when we faced the GCC blockade in June 2017, we were importing huge perishable shipments from India to support the population of Qatar during the initial months, an average of 66 tonnes each day. We received our 17th Boeing 777 freighter recently and will be receiving four more B777 freighters this year, bringing our freighter fleet to a total of 21 B777Fs, two B747-8Fs and five Airbus A330Fs. With our investments in fleet, technology and digitalisation, dedicated products and services, complemented by a global network and our state-of-the-art hub in Doha, we are fully geared to cater to India’s growing demand for imports and exports.

For the Indian market, what would be your strategy in the coming years?

We are in the ‘People Industry’ and we should never forget that.

If you take the top ten carriers in the world and step back a bit, what is apparent right away is that we all fly similar routes, utilising mostly the same aircraft and even schedules. So, the difference really is the people, and when you call Qatar Airways you dis-

cover that the person who serves you is motivated to do good from the bottom of their heart.

Cargo remains a people business and we are always learning and understanding what is important to our customers by being in the frontline. The core strategy for us is to maintain the same fundamentals, remain welcoming, humble, flexible, globally connected, available to our customers roundthe-clock and being aware and responsive to their interests.

What's the current size of Indian pharma exports shipped by Qatar Airways Cargo?

India is a power house of generic medicine manufacturing and more than 70 per cent exports to the World Health Organisation (WHO). We uplifted more than 20 million tonnes during the last financial year and have hired new talent in both Ahmedabad and Hyderabad to promote our product, where we have identified that we can develop our market share.

The ‘Make in India’ initiative that encourages manufacturing in India has further created new possibilities and will ensure more cargo verticals to India.

Share Qatar Airways Cargo’s initiatives and strategies for making a meaningful impact in the world of air cargo.

There are clear signals that demand is slowing down globally. However, we have been gaining market shares. This also includes those countries where we did not add any capacity. We believe, during times like this, our quality of service and customer centricity makes all the difference. CC

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Interview

Air Cargo has long been the toast of shippers across the globe, as industry takes giant leap towards modernisation and technology; cargo carriers will need to adapt in order to maintain a competitive offering. Jessica Tyler, VP- Strategy and Development at American Airlines Cargo, in conversation with Saurabh Sharma, informs how they have consistently pushed the edge of cargo technology and expanded their network around the world, with the commitment to providing the highest level of care as they safely and reliably transport more than 2 billion pounds of freight and mail around the world each year.

We are well down the road on our modernisation journey Kindly share some insights about the genesis and lineage of American Airlines Cargo.

We can trace our lineage back to an association of air transport companies that merged to become American Airways, which was the direct predecessor of American Airlines. The first cargo flown by our predecessor was a mail contract route from Chicago, Illinois, to St Louis, Missouri. American Airlines Cargo marks the 75th anniversary of the first ever cargo flight on October 15.

What makes American Airlines Cargo a compelling business case for air cargo operations?

2018 was a record-breaking year for us at American both in terms of operational performance (FAB), volume, and revenue. We reported $1B for the first

66 CargoConnect - ACAAI 2019

time and moved two billion pounds of freight, and our global team worked hard to make that happen. In fact, we’ve had 12 months of record-breaking operational performance – delivering what we promise customers day in and day out is what we do best. Due to many external factors, the market for all cargo shippers has softened throughout the first half of the year, but our resilience lies in our network strength and exceptional customer service.

Domestically, we carry freight and mail on both wide body and narrow body flights as it is our home market.

Our narrow bodies and their frequency of service are ideally suited to accommodate the ever-growing E-commerce business which predominantly consists of small parcels.

What practices make you stand out in technology, innovation and automation while handling cargo movement?

We are well down the road on our modernisation journey, much like the entire industry. We are currently making significant investments in technology with the development and upcoming implementation of our new iCargo system.

This year, the headline is about offering customers new self-service tools and booking experience that is more in line with user’s experience. The platform allows us to streamline our processes, and give customers easier access to our teams every step of the way.

The investment in iCargo and the accompanying evolution is American’s largest investment in cargo throughout

India is an important market for us, and we have interlined connections and GSA operations in place to fully support our activities.

Customers across India have full access to our global network.

the history, which will allow us to further improve our products and increase our capacity for customers. It’s exciting to see how investments like this will help to shape the industry over the next several years.

What state-of-the-art facilities are employed by AA Cargo to manage such a huge network of air carriers?

We offer various cooling solutions to customers with our ExpediteTC° product. The product includes service features and benefits, dedicated infrastructure, enhanced tracking technologies, and temperature-controlled containers. We have a flagship, purposebuilt pharma facility at Philadelphia International Airport (PHL) where we have made significant investments and commitments to the pharmaceutical and healthcare industries. We also have infrastructures positioned across the world at many locations including Dallas-Fort Worth International Airport (DFW), John F Kennedy International Airport (JFK), Miami International Airport (MIA), San Juan Luis Muñoz Marín International Airport (SJ U), Heat h row A i r por t (LHR), Charles de Gaulle Airport (CDG), and Frankfurt Airport (FRA).

What are the chief markets that AA Cargo caters to? What is the share of Indian market in AA Cargo’s operations?

Asia is a long-standing region for us with operations in China, Japan, Korea and Hong Kong. We are encouraged by the two new slots at the Tokyo Haneda Airport (HND) for service beginning 2020, and look forward to the solutions we can bring to our customers with

these additions. Those slots include a daily DFW-HND flight using a 777200ER, and a daily LAX-HND flight using a 787-8.

Latin America is another important market for us. We operate the largest number of wide-body frequencies from the US to that region, particularly to Brazil and Argentina. The Transatlantic and Transpacific markets remain very crucial to our global network offering for customers in addition to Asia, Europe and Latin America. We continue to expand the overall offering with more new routes.

Europe has long been a key market for us with cargo operations at London Heathrow, Paris and Frankfurt, and a growing range of other cities now served year-round or seasonally. In August, new direct routes from our US hubs to locations including Krakow, Prague, Budapest, Tel Aviv and Casablanca were announced to begin in 2020. We are excited to expand further into an existing strong market.

The investment in iCargo and the accompanying evolution is American’s largest investment in cargo throughout the history, which will allow us to further improve our products and increase our capacity for customers.

For India, specifically, we serve the region through our strategic partnerships and consistently find new ways to connect customers across the globe.

India is an important market for us, and we have interlined connections and GSA operations in place to fully support our activities. Customers across India have full access to our global network as a result.

Enlighten us on the endeavours made by AA Cargo towards curbing carbon emissions to ensure a sustainable environment.

Sustainability is at the core of Ameri-

can’s business strategy. AA Cargo is committed to safeguarding the environment. We are doing all we can to proactively minimise our impact – recognising that the success of our efforts will affect future generations. That’s why we’re pursuing a goal to cut our CO2 emissions to half over the next 30 years. Our efforts—in the air and on the ground—to operate more sustainably are also in line with the expectations of our team members, customers and shareholders.

If you look at how we’re investing in aircraft, you can see our focus on sustainability. Our fleet renewal program is retiring older models for more f uel- eff icient aircraft, a nd we’ve brought on 500 new planes since 2013 – making our fleet the youngest US fleet in the industry. We’re burning less fuel, reducing emissions and cutting energy costs. The new models are also quieter, improving passenger comfort and reducing the impact of noise on communities near airports where we operate.

What trends you believe will shape the global air freight market in the upcoming years?

Today, consumer expectations are completely different than what it was a few years ago. As the bar for expedited shipping raises across consumer services, cargo carriers will need to adapt in order to maintain a competitive offering. Expectations will only continue to rise, and at American, we focus on listening to our customers, providing solutions based on their needs, and even providing what they may not know they need.

With the influence of new players in the air cargo industry, it’s important to learn and look to the future with new, creative ideas. As the industry begins to revolutionise through digital enhancements and investments in technology, an industry-wide mind-set change is also necessary to modernise and grow forward. In a few years, my hope is that we’ll be talking about digital solutions that go beyond tracking and digital platforms for the state of the industry is significantly more advanced across all products and services.

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Our flight schedule is simply second to none Southwest Airlines Cargo is getting more resolute towards air freight. In May 2018, the carrier made its international debut by launching services in the Houston-Mexico City route.

Recently, the carrier has rolled-out a brand new product called ‘Fresh Fast’ which will benefit many perishable shippers as it offers shorter cut-off and recovery times than standard product, with a 24 hour delivery guarantee included.

Wally Devereaux, Managing Director, Cargo and Charters at Southwest Airlines, in a one-to-one conversation with Saurabh Sharma, talks about the exclusivity of air cargo operations executed by the team.

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What makes Southwest Airlines Cargo’s services exclusive to the global air freight market?

Two things really stand out as it relates to the success of Southwest’s cargo business. Southwest offers an exceptional flight schedule with a tremendous amount of redundancy. This has always been one of the things our customers truly value. If the first flight option doesn’t work for some reason, we typically have multiple other options to get shipments to their destination in a timely fashion. The other aspect of our business has to do with our People. We staff a majority of our cargo facilities with Southwest Airlines’ employees and do most part of the ramp handling on our own. Our employees understand the cargo business and are passionate about it being successful which has greatly contributed to the quality of our service, and thus, our success over the years.

As Southwest Airlines Cargo is raring to go beyond the borders with its extensive network of air carriers, what are the potential markets you are looking for global air cargo operations?

We currently offer shipping between the United States and Cancun, Cabo San Lucas/Los Cabos, Montego Bay, Jamaica, San Jose’, Costa Rica, and Punta Cana, Dominican Republic, with more markets to be added. With our interline partners, Hawaiian Airlines and WestJet, we are also able to serve Hawaii and multiple Canadian destinations, and we intend to expand our cargo interline program to additional partners serving different markets in the near future.

How significant is the role of infrastructure and technology in managing the vast network of air freighters?

All of our cargo is carried in the belly of our Boeing 737s. As our passenger network has grown through the years, we’ve been able to take cargo to more

places. As we’ve evolved, we’ve seen the need to invest heavily in technology that ultimately makes it easier for someone to choose Southwest Airlines Cargo over other carriers or shipping options. We recently unveiled a new cargo operating system and refreshed our website. But as the need for technology changes, the one thing that hasn’t changed is our customer’s expectations to move their freight as committed. This is where Southwest Airlines Cargo has always done exceptionally well and will be deeply committed to in the future.

Lately, Southwest Airlines Cargo has revealed a revamped product menu for air cargo customers. Please brief us about the new options available.

We recently revealed a brand new product known as ‘Fresh Fast’. This product really benefits many of our perishable commodity shippers, offering them shorter cut-off and recovery times than our ‘Southwest Standard’ product, with a 24 hour delivery guarantee included. From flowers to seafood to live tropical fish, we know time is of the essence for these types of commodities, and our robust, point-topoint flight schedule is perfect to deliver that freshness to the end-user.

How do you predict the future of global air freight markets amidst the cross border E-commerce boom?

We recently revealed a brand new product known as ‘Fresh Fast’. This product really benefits many of our perishable commodity shippers, offering them shorter cut-off and recovery times than our ‘Southwest Standard’ product, with a 24 hour delivery guarantee included.

We have seen our business transform as consumer needs have changed over the years. In the 90s, we were moving rolls of film and newspapers. Today, we are moving a wide range of commodities ordered online like clothing, electronics, among many others. Generally speaking, the expectation is for these shipments to move very quickly. Going forward, this will only continue to provide opportunities for airlines to successfully participate in the growth of E-commerce.

All of our cargo is carried in the belly of our Boeing 737s. As our passenger network has grown through the years, we’ve been able to take cargo to more places. we’ve seen the need to invest heavily in technology that ultimately makes it easier for someone to choose Southwest Airlines Cargo over other carriers or shipping options.

Southwest Airlines Cargo has been sweeping many awards in cargo services. Enlighten us about the services gratifying the customers.

For Southwest Airlines Cargo, it’s about our People and our flight schedule. The vast majority of our cargo locations are staffed with Southwest Airlines employees who are passionate about the cargo business and do a wonderful job. Additionally, our flight schedule is simply second to none. Not only does it offer over 4,000 nonstop flights per day, but it also offers shippers a tremendous amount of redundancy through the point-to-point scheduling model. Schedule redundancy is critically important to air freight shippers. If for some reason, we can’t move a shipment on the first flight out, we generally have multiple other routing options to get the shipment to its destination on time. CC

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Providing top-notch services and solutions to the Indian market From adopting the e-AWB, transporting special cargo like lithium batteries, huge pipes, cars, helicopter cabins, serving 190 destinations in more than 60 countries worldwide, Cathay Pacific Airways has come a long way.

Rajesh Menon, Regional Head of Cargo– South Asia, Middle East & Africa at Cathay Pacific Airways, in an exclusive interview with Ritika Arora Bhola, talks about the importance of the Indian market, new freighter services started by the airline, and global vital trends driving the air freight industry.

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Kindly tell us about Cathay’s freighters coming to India.

How much revenue the airline makes from the Indian market?

The cargo division of Cathay Pacific is one of the most important business units for Cathay Pacific. Our performance for the cargo business, particularly in India, has been healthy. We have recorded a 2.2 per cent tonnage growth for exports in the year 2019. In fact, owing to the increase in demand in the region, we have deployed ad-hoc freighters on timely basis to meet our customer’s needs.

We believe it is of utmost importance to provide our customers with a one-stop-solution, and we are able to do so with our robust network. We operate out of six major airports in India- Delhi, Mumbai, Chennai, Hyderabad, Bangalore and Kolkata, and have a total of 49 passenger flights and 26 freighter services per week. On the basis of demand, we often operate three ad-hoc services out of Chennai, amounting to a total of 29 freighters.

Can you please tell us about your specialised cargo segments? What kind of cargo Cathay moves to and from the country?

Our expertise include carrying odd sized shipments that include huge pipes, cars, helicopter cabins, infrastructure parts and medical equipment with our nose door operations on the Boeing 747 freighters. Cathay Pacific is the only service provider in the market with expertise of handling seven categories of ‘Special Products’ cargo.

We also uplift a lot of perishable and pharmaceutical products for this region. We have collaborated with Pharma.Aero to provide customers with better solutions for quality transportation and proficient handling of these valuable products.

We are also one of the few airlines globally to be able to carry lithium-ion batteries on our freighter aircrafts. This has been made possible due to the in-

troduction of the Fire Containment Bags which acts as a safety solution for this product. Considering the growing market for this product, the Fire Containment Bags are available at 51 of our freighter destinations, including India.

To further meet the demand of the customers, we are also exploring new solutions for bigger battery sizes and higher quantities, such as those used in the electric car industry.

What's the current size of Indian pharma exports dealt

by Cathay Pacific?

PharmaLIFT is one of the most important products for us and handling Pharma products is one of our USPs. India is a big market for Cathay Pacific, especially when it comes to shipments of pharmaceutical products.

Pharma products alone have accounted

We operate out of six major airports in India- Delhi, Mumbai, Chennai, Hyderabad, Bangalore and Kolkata, and have a total of 49 passenger flights and 26 freighter services per week.

for over 3.4 per cent of the business in 2019. Hyderabad, Bangalore and Mumbai have always had large number of pharma shipments and this continues to grow.

How has the Indian market evolved for Cathay Pacific till date? How would you strategise on your offerings in the coming years?

There has been a strong focus of the Indian government on digital developments, and improving infrastructure.

Alongside, initiatives that support logistics and government regulations

have all contributed to the growth of the industry and will continue to do so.

With the simplification and modernisation of export and import processes, introduction of several provisions that accelerate clearance of goods along with seamless cooperation between the shippers and customs have not only helped us but the entire sector. All the initiatives that the government has taken focus on the improvement of the industry, thus ensuring we are meeting the country’s vision of being on par with the global air cargo standards.

Keeping in mind India’s vision, Cathay Pacific is also updating and advancing itself to provide its customers with top-notch services and solutions.

In the recent past, we implemented the 100 per cent e-Airway bill (e-AWB) across the country, thus making all our processes digital and contributing to create a paperless environment in the air freight industry. Adopting e-AWB also helped us reduce overall costs and bring in increased operational efficiency and accuracy when dealing with customers. Besides, we are in process of developing a digital platform for the freight forwarders that makes the booking process simpler, convenient and with a faster turn-around time.

What do you see as the vital global trends in the air cargo industry considering the last financial year?

The cargo industry is extremely volatile and is dependent on many factors like the economies of countries, geo-political situations, consumer confidence, etc.

According to IATA figures released for the global air freight markets, even though there is a dip recorded in the air cargo sector early 2019, the market is expected to steadily grow owing to factors such as strong demand for manufacturing exports and increased penetration of advanced technologies. A tremendous increase in growth is expected in the industry owing to the Ecommerce industry which is expected boost the air cargo demand globally. CC

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Interview How does IATA ensure transparency and efficiency by implementing uniform standards and policies across all carriers in a consistent and neutral way?

Efficient and effective global standards are the cornerstone of a globally connected aviation industry. IATA has been setting industry standards for over 70 years and there are established mechanisms to ensure that every industry stakeholder has an opportunity to participate in the process. There are a series of dialogue groups, technical groups and voting conferences in which each participant, regardless of size, has an equal say.

Setting uniform standards for a large group of carriers can pose difficulties, as some airlines are more vocal than others, and have different approaches and policies. However, IATA has leveraged its neutrality to mediate between multiple carriers and handlers to find areas of common ground. How difficult is it to create a balance or to mediate between multiple carriers and handlers?

The standards setting activity has evolved over many decades to provide an inclusive mechanism. Industry standards are designed to provide a framework upon which the industry can operate efficiently. And in these days of evolving customer expectations, indi-

Air Cargo- an industry for today and tomorrow Global air cargo industry has been largely impacted by deepening trade tensions– particularly between the US and China, as well as the evolving E-commerce has put pressure on sales channels for faster delivery and an optimum supply chain. Glyn Hughes, Global Head of Cargo at International Air Transport Association (IATA) also agrees to this. In an exclusive interview with Ritika Arora Bhola, the air cargo expert talks about IATA’s priorities, challenges associated with maintaining neutrality and creating a seamless system for all the stakeholders, contribution of India to the global freight market, and much more.

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vidual carriers and their partners build on those industry standards to create valued bespoke solutions.

IATA’s main aim is to constantly help assist airlines in the implementation of standards and create a common understanding between different entities in the aviation/air cargo industry. Please elaborate on your responsibilities as the head of IATA.

Firstly, I must clarify, our role is to work with the entire supply chain and not just carriers so that standards are reflective of every stake-

holders needs. In order to do that effectively, my role as IATA’s Global Head of Cargo is to engage with many industry partners and to listen to their sector’s needs. Thereafter, it is to build coalitions and establish partnerships so that we may collectively speak with a united voice. One example of this is the Global Air Cargo Advisory Group (GACAG) which brings together IATA, International Federation of Freight Forwarders Associations (FIATA), The International Air Cargo Association (TIACA) and the Global Shippers Forum (GSF). GACAG engages in identifying issues of concern to all parties and develop common positions and advocacy campaigns designed to address the same.

Kindly elaborate on the initiatives taken by IATA to boost air cargo and implement latest technologies – electronic airway bills, digitization, etc.

We have a number of programs designed to tackle various challenges currently being faced by the industry.

Digitalisation is crucial in order to provide the efficient and transparent services demanded by air cargo customers.

The eAWB, Cargo XML and ONE Record program provide industry protocols and platforms to facilitate the necessary digitisation. Safety and security remain air cargo’s top priority and we have a number of programs designed to enhance these requirements further.

Currently, the number of undeclared or non-compliant lithium battery shipments is a concern and we are working with regulators around the world as well as postal authorities to enhance compliance. The rise of E-commerce means the various platforms also have a role to play in educating their merchants about the various aspect of safe air cargo transport. As far as developing markets are concerned, IATA has numerous capacity building programs and actively promotes free trade agreements and simplified border procedures to enhance air cargo’s attractiveness in connecting goods to markets.

What do you see as the vital global trends in the air cargo

industry considering the last financial year?

The key theme in air cargo is to expect the unexpected. A global industry such as air cargo is impacted by political situations and tensions such as one we are currently seeing between the US and China, besides the evolving consumer behaviours with the transformation of E-commerce business. We are seeing a rise in special cargo transport, such as pharmaceuticals and fresh produce which require enhanced handling solutions. We are also witnessing emerging trade areas such as the African continental free trade agreement as well as rapidly shifting supply chains. Attracting the next generation of industry leaders is a growing concern as it would require providing advanced automation and robotic solutions in the cargo facilities in order to cater for the planned volume growth in the coming decades.

Efficient and effective global standards are the cornerstone of a globally connected aviation industry.

IATA has been setting industry standards for over 70 years and there are established mechanisms to ensure that every industry stakeholder has an opportunity to participate in the process.

How has Indian market evolved in the last few years? What would you like to comment on the contribution of India in the global market and its stand globally?

India has a long standing reputation for providing world-class back office services in technology and business support functions. In recent years, the ‘Make in India’ program has demonstrated success in steadily building a globally recognised quality manufacturing sector. The pharmaceutical, aerospace and automotive industries are testament to this. However, infrastructure still remains a challenge in

places. But it is very encouraging to see the investments currently being made into cargo facilities as well as air cargo technology which will bolster the growing manufacturing sector.

Kindly throw light on IATA’s initiatives with regard to safety, security, quality, modernisation and transformation and digitisation in all spheres of the air cargo business.

As stated earlier, safety and security are and will always remain the top priority for the industry and the use of advanced data will assist states in performing risk assessments of shipments tendered for transport. Additionally, industry training, standards and supporting tools such as the IATA DG Regulations Manual and the IATA DG Auto Check tool help front line staff ensure cargo tendered is fully compliant with safety regulations. IATA also runs workshops and seminars promoting a safe air cargo industry. Additionally, ULD safety is also something we are actively promoting as these valuable assets are a critical aspect of a safe industry.

Where do you see the global air cargo industry heading towards in the next decade?

Air cargo continues to play a vital role in the global economy, transporting nearly six US$ trillion dollar worth of goods every year which equates to approximately 35 per cent of all global trade. It also transports lifesaving drugs and vaccines which cater to the safety and care of millions of lives. Fresh produce being carried to global markets, common man has all access to healthy naturally grown products which also supports developing and less developed nation’s economies to grow and prosper.

Further, it provides millions of jobs and supports relief efforts during times of natural disasters. Yet it must remain agile and flexible as new challenges arise daily and this is where the one constant aspect of the 100 plus years of air cargo, resilience and adaptability to changing influencers and evolving requirements, is so important. It is an industry for today and tomorrow.

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First mile and last mile are critical for flawless air cargo deliveries

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The 45th Air Cargo Agents Association of India (ACAAI) convention is all set to kick-start in Phuket on November 21, 2019. Ahead of the conference, Sunil Arora, the recently elected President of ACAAI, in an interaction with Ritika Arora Bhola, discusses the significance of this year’s theme, motive behind choosing Phuket as the venue for the convention, his priorities as a the new elected president, and much more. Here are the excerpts from the interview:

Tell us about the motive behind choosing Phuket as the venue for ACAAI 2019. How do you see India’s trade relations with Thailand in the coming years?

Earlier, we have had two very well-organised conventions in Bangkok and Phuket, around 14 years back. Thailand being close to India, it is easy to take Indian expertise to Thailand, besides Thai Airways has been a very active member of ACAAI along with other airlines. So, it was a mutual decision to go back to Thailand once again. Also, as far as the trade is concerned; it will be interesting to know about the country’s air cargo services, expansion of Bangkok airport, Southern Cargo Hub and the logistics policies. Nonetheless, Phuket is a beautiful island and the members will get plenty of time to visit the locales after the conference.

Elucidate the significance of this year’s theme ‘End-to-End Logistics: The Way Forward’ in the air cargo sector.

'End-to-End Logistics' is an important and appropriate theme because it involves the various stakeholders – freight forwarders, airports, airlines, custom clearance agents, logistics service providers, transporters, warehouse operators, as well asair freight stations for facilitating a seamless air cargo delivery model. First mile and last mile connectivity holds supreme importance in this sector. Today, the logistics scenario has altogether changed, and it’s not easy to move air freight to and from the country, an affair that needs to be stressed upon. Therefore, together, we need to work for providing efficient first mile and last mile services to the exporters.

What would be your priorities as the President of ACAAI? What challenges you foresee with the role?

My first priority as the President of ACAAI would be to bring together all the trade associations and stakeholders at one platform. Secondly, I would take up issues/challenges related to the freight forwarding community with the custodians, ministry and custom clearance department. My other paramount priorities would involve organising stakeholder meets frequently to facilitate discussions on prevailing issues and take collective efforts with presenting effective solutions to the government. My interest would also call for bringing in moderation among all the stakeholders in the industry.

You have been associated with ACAAI for a long time now.

Please share your experience with us.

I have been associated with ACAAI since the last 16 years. I joined the association in 2002 and became the Managing Committee member, since then I have been serving the industry and association continuously. Later, I took various positions, from MC member to Chairman of the Northern Region, Secretary, Vice President and now President. Definitely, I feel proud to be a part of ACAAI.

Do you think infrastructure at Indian airports is ready to cater to the exponential growth of the air cargo sector?What are ACCAI’s steps and initiatives in clearing out the impediments?

Certain airports like Delhi International Airport (DEL) are well-equipped withworld-class infrastructure– it has more than enough capacity and infrastructure tohold cargo of two years at one time. Mumbai and Hyderabad Airport are other two with robust infrastructure and managing their business efficiently. Besides, Kolkata and Chennai are two main cities whose major airports are being equipped with advanced technologies and top-notch infrastructure, as these two cities bring in the serious air cargo business.

ACAAI is in regular consultations with the Ministry of Civil Aviation (MoCA) regarding the ongoing projects; we thank the ministry for aggressive approach towards the country’s first ever air cargo policy.

Airports Authority of India (AAI) under AAI Cargo Logistics and Allied Services (AAICLAS) is doing commendable work. They are serious about implementing infrastructural changes at the airports they are managing. Also, with Adani group coming in, I am sure they will help develop infrastructure not only at thepassenger side but also for air cargo which is integral to any airport. Airports in Chennai, Kolkata, Jaipur and Pune needs immediate infrastructure. ACAAI is in regular consultations with the Ministry of Civil Aviation (MoCA) regarding the ongoing projects; we thank the ministry for aggressive approach towards the country’s first ever air cargo policy. For the first time, Indian aviation sector has seen various policies formed and implemented on the aspects of air cargo. With above, we are hopingthe National Logistics Policy will too come up soon. CC

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Turnaround time has improved over the last few years Afzal Malbarwala has been serving the country’s air cargo industry since last four decades. Recently, he has been appointed Vice President of the Air Cargo Agents Association of India (ACAAI) for the year 2019-2020. Ahead of ACAAI's 45th annual convention, the air cargo veteran informs Ritika Arora Bhola about the prominence of this year’s ACCAI theme, and much more on the opportunities and developments impacting India’s air cargo sector.

Why did you choose the theme ‘End-to-End Logistics: The Way Forward’ above others?

‘End-to-End Logistics’ will give advantage to customers to focus on their core business activities and how LSPs will handle operations for them. This will enable both of them to share knowledge and grow together. In the past, forwarders/transporters/customs brokers/ warehouse operators etc. were offering services to the same customers but on individual basis. This was increasing the cost and total lead time with multiple chains of communication. In today’s market, the need is to cut down on lead times and multiple communications along with the aim to offer costeffective solutions to customers.

Tell us about the latest developments and innovations you have observed in the air cargo sector in the last few years.

India’s air cargo industry is evolving at a rapid pace. More and more airports are becoming e-freight compliant. Lot of untapped resources is offering challenging opportunities to business communities. India’s growing economy and willingness to adopt new reforms has invited major investments in India and have led to the entry of new airlines and launch of new destinations by existing airlines.

We can notice enhanced safety and security measures being taken by concerned agencies, and efforts by stakeholders for driving efficiency through implementing global standards. E-airway bills have cut down many small processes with improved data accuracy.

Besides, with the implementation of

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SWIFT (Single Window Interface for Facilitating Trade) by customs authorities, all partner government agencies are brought on one single platform of IceGate, helping speed-up approvals/customs clearances. Turnaround time (TAT) has improved a lot over the last few years; imports and exports processes are soon to match international standards.

Major challenge is infrastructure and hurdles in connectivity to airports by road/rail. With focussed efforts of GoI, we can definitely see improvements in near future.

Elaborate on the opportunities available in domestic and international air cargo which has not been explored yet.

In India, air cargo operations are mainly handled through a few major airports. The untapped markets of tier II and III cities can be explored efficiently; therefore Government of India (GoI) is adopting many efforts for infrastructure development so as to facilitate air connectivity in these cities. In the near future, small business units located in any corner of the country can enter the mainstream and do business with any part of the world. While logistics parks set up in different part of India can add value to supply chains by offering integrated solutions.

Fruits/vegetables /perishables can be delivered faster to international des-

tinations once better domestic connectivity is established. We should also look at working as a transfer hub for transshipment business, our strategic location between Europe and Far East/ Europe and Australia can give us advantage for handling transshipment cargo at a reduced cost. European carriers need not have to fly directly to destinations; India’s air cargo industry should offer them solutions. With simplified processes, we can think of transferring airline pallets to internal parts of India for customs clearance.

What are the recent initiatives taken by the government and private authorities to ensure smooth end-to-end logistics?

To ensure global competitiveness and sustainable growth of Indian air cargo industry, GoI has created National Air Cargo Community System (ACS) under the National Civil Aviation Policy (NCAP) 2016. In January 2019, GoI released the National Air Cargo Policy Outline 2019 which envisages making Indian air cargo and logistics ecosystem the most efficient, seamless and cost and time-effective. Airports in India are deploying technologies to enhance utilisation and efficiency of cargo industry. IT based cargo management and mobile apps have been developed by government agencies for functioning at their pan-India facilities. Further, GoI is developing new greenfield airports in Gujarat, Andhra Pradesh and 13 other locations across the country. The authorities are also working on a blueprint to promote domestic manufacturing of aircrafts and aircraft financing within the country. CC

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u p d a t e s Lufthansa Cargo accelerates fleet modernisation

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ufthansa Cargo will significantly accelerate the moder n isat ion of its fleet by purchasing two more b r a n d- n e w B o e i n g 7 7 7 F freighters. Lufthansa Group

and Supervisory Board have approved the corresponding investments. The aircraft will be delivered by the manufacturer in 2020 and be based in Frankfurt.

Due to the higher cargo capacity and range, the same freight performance can be achieved in the future with not iceably fewer a i rc ra f t movements. Overall, Lufthansa Cargo’s customers will have the same freighter capacity at their disposal at the end of the rollover as they had at the beginning when eighteen MD11Fs were in operation for Lufthansa’s cargo arm. In addition to its own fleet, Lufthansa Cargo can also utilise the cargo capacity of four Boeing 777Fs operated by AeroLogic.

SAS Cargo No 1 in the world in delivering air freight quality

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AS Cargo has been ranked No 1 in delivering air freight quality according to the IATA Customer Promise Performance Index. The IATA Customer Promise Performance Index is a very important benchmarking index as it reflects a fixed and standardised mutual measurement of quality between car-

riers and forwarders.

I A T A driven organisation Cargo iQ has released its September 2019 results, revealing that SAS Cargo maintains the lead position.

Turkish Cargo obtains ‘TAPA FSR‘ security certificate

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he global air cargo brand, Turkish Cargo, has been awarded 'GROUP A TAPA (Transported Asset Protection Association) FSR (Facility Security Requirements)' certificate founded to reduce the loss in the international supply chain and based on the

security of facilities.

TÜV Rheinland, a noted leader in independent inspection services, providing independent audit services in terms of quality and security has issued this certificate for Turkish Cargo’s cargo facilities at Istanbul and Atatürk Airports.

Vistara to double fleet size by March 2020

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ull-service carrier Vistara airlines is set to almost double its fleet size to 42 planes by this fiscal-end as compared to 22 aircraft in March 2019.

The airline will induct six more A320neo aircraft by December 2019, following which Vistara will get two wide-body aircraft, the Boeing 787-9 Dreamliner, it had ordered last year, and one Airbus A321neo between January and March 2020.

With this, from 22 aircraft in March 2019, the airline will take the fleet size to 42 by March 2020.

IndiGo plans to enter Europe via Tbilisi from early next year

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ndiGo is looking at starting a flight to London and to other European cities through a single stop. The airline is in discussion with the airports in Tbilisi (Georgia) and Baku (Azerbaijan). The plan is to start the route by March.

The no-frills airline has already completed the safety risk assessment and station facility inspection of the Tbilisi airport, which is a mandatory exercise prior to launching a flight to a new airport.

The airline will operate the route with an Airbus A321 aircraft and will use the airport it lands at on the way as a technical stop, the term for a landing to refuel, with passengers not allowed to disembark.

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u p d a t e s SpiceJet to open its first international hub in the UAE

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ndian budget airline SpiceJet will open its first international hub in Ras Al Khaimah (RAK), where it also plans to set up a new airline, and expressed confidence in Boeing’s 737 Max re-certification by early 2020.

Etihad Cargo launches state-of-the-art cargo control center

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tihad Cargo, the cargo and logistics arm of the Etihad Aviation Group, has taken its data-driven digitalisation journey another step forward with the launch of its state-of-the-art Cargo

Control Centre (CCC) at its head office in Abu Dhabi.

Launching a year after Etihad Cargo embarked on a farreaching digital transformation strategy, the CCC today becomes the “nerve centre” for

real-time monitoring, tracking and active management of all shipments, flights, and UAE road feeder services in an effort to enhance Etihad Cargo’s ‘delivery as planned’ (DAP) promise to its customers.

Scoot launches two new routes to India

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coot, the low-cost carrier of the Singapore Airlines (SIA) Group, has added Visakhapatnam and Coimbatore to its network. Scoot offers five weekly ret ur n flights on the VisakhapatnamSingapore route and daily return flights on CoimbatoreSingapore.

The new routes bring the number of Indian cities served by the airline to seven, including Amritsar, Chennai, Hy-

GoAir becomes 1st Indian airline to operate from Changi Airport Terminal 4 derabad, and Tiruchirappalli and Trivandrum. The new routes are operated by Scoot’s fleet of narrow-body Airbus

China Airlines Cargo begins freighter service to Mumbai

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hina Airlines Cargo, the cargo division of China Airlines Limited of Taiwan, is extending its connectivity to Mumbai after successfully operating in the Delhi market from the past 20 years.

The airline is set to begin its Mumbai freighter service

SpiceJet will start with flights between New Delhi and RAK in December using Boeing 737 Next Generation aircraft, said Ajay Singh, chairman and managing director of SpiceJet. It will later place up to five 737 jets in the emirate to capture travel demand between India and Europe through RAK.

A320 family aircraft, and the routes were transferred from sister airline, Silkair, with increased frequencies on Scoot. for active and passive pharma from Mumbai International Airport Limited (MIAL) from November 16 (subject to all government approvals) westbound and November 17 eastbound. China Airlines Cargo will operate four flights a week, two per week from Taipei to Mumbai and going forward to Amsterdam, and two per week coming from Amsterdam and going to Taipei.

B

udget carrier GoAir has become the 1st Indian airline to operate from Terminal 4 – Changi Airport.

With the inaugural flight on October 19, Singapore becomes the 3rd in Southeast Asia, 8th international and 33rd sequential destination for GoAir. Commenting at the commencement of Singapore operations, Jeh Wadia, Managing Director, GoAir, said, “The introduction of flights to and from Singapore is a turning point in the history of GoAir. Singapore carries the distinction of being an important leisure destination as well as an established business hub. It is in this regard that GoAir will work closely with the Singapore Tourism Board and all such likeminded organisations that can further the cause of tourism in India as well as Singapore.”

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UpComingevents Air Cargo

EVENT: Aviation Festival Asia ORGANISED BY: TERRAPINN DATE: February 18 - 19, 2020 WHERE: Suntec Convention &

Exhibition Centre, Singapore Aviation Festival Asia aims to be the gateway for the attendees to the world’s fastest-growing aviation market. It provides the attendees with the opportunity to meet senior executives in the Asian aviation industry and focusses on the ancillary strategies, price management and distribution for the modern airline along with AI, data-driven technology and the future of aviation.

To know more visit www.terrapinn.com/exhibition/ aviation-festival-asia

EVENT: Air Convention Asia 2020 ORGANISED BY: AviationCV DATE: April 21 - 23, 2020 WHERE: Bangkok, Thailand

AIR Convention Asia conference will host 4 major talk panel streams with more than 100 leading aviation industry experts to examine continent's economic boom and its influence on the growth of the middle class, consumer behaviour, dealing with growing capacity, the importance of infrastructure and manufacturing to keep up with the growing pace of the region and how it all affects finance and banking.

To know more visit www.asia.airconvention.com

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EVENT: IATA World Cargo Symposium

2020

EVENT: Cargo Facts Asia ORGANISED BY: Air Cargo World and

ORGANISED BY: International Air Transport Association (IATA) DATE: March 10 - 12, 2020 WHERE: Hilton Istanbul Bomonti Hotel & Conference Center, Istanbul, Turkey IATA’s 14th World Cargo Symposium will continue to move the industry from talk to action with this edition. WCS 2020 will feature plenary sessions, specialised tracks, workshops and executive summits, tackling aspects related to Technology and Innovation, Security and Customs, Cargo Operations and Sustainability.

To know more visit www.iata.org

Cargo Facts DATE: April 20 – 22, 2020 WHERE: Mandarin Oriental Pudong, Shanghai Cargo Facts Asia is the Gateway to Opportunity in the Asia-Pacific region. With the rise of ownoperated networks, increasing China – US trade regulations, and China’s Belt and Road initiative, Cargo Facts Asia 2020 is the platform to discuss the future of air cargo with positioning your brand for success and reach the key leaders in air cargo.

To know more visit www.cargofactsasia.com

EVENT: Air Cargo China ORGANISED BY: Messe Muenchen

EVENT: Air Cargo Forum 2020 ORGANISED BY: The International

Shanghai DATE: June 16 - 18, 2020 WHERE: New International Expo Centre, Shanghai Air Cargo China is Asia’s leading trade fair for logistics, mobility, IT, and supply chain management. The event includes a comprehensive conference program which is an essential part of the air cargo China exhibition and convinces through knowledge exchange on the industry’s latest developments and trends—both concerning the Asian market and the international context.

To know more visit www.aircargochina.com

Air Cargo Association (TIACA) and Messe München DATE: November 10 - 12, 2020 WHERE: Miami Beach Convention Center, Miami, Florida, USA The International Air Cargo Association (TIACA) is the only organisation representing all segments of the air freight supply chain. TIACA’s Air Cargo Forum (ACF) is a biennial event bringing together thousands of airfreight decision makers and supply chain operators from across the globe.

To know more visit www.tiaca.org/air-cargoforum

APPOINTMENTS Arvind Singh takes charge as Airports Authority of India Chairman

IAS officer Arvind Singh has taken charge as the chairman of Airports Authority of India. The 1988-batch IAS officer of Maharashtra cadre will replace Anuj Aggarwal, who has been with the additional charge of AAI chairman.

Prior to this appointment, Singh was the additional chief secretary (Energy) of Maharashtra government. He also worked as chairman and managing director of Maharashtra State Power Generation Company Limited and Maharashtra State Electricity Transmission Company Limited.

ACSA appoints Fundi Sithebe as new acting CEO

The Board of Airports Company South Africa (ACSA) has appointed Fundi Sithebe as acting Chief Executive Officer (CEO), replacing Bongiwe Mbomvu with effect from November 1. However, ACSA said that the process to recruit and appoint a permanent CEO is underway.

Sithebe joined ACSA in March 2015 as chief of staff and was subsequently appointed to the role of chief operating officer in December 2017. Sithebe wealth of experience also includes several years of consulting at companies such as Deloitte and First Rand Africa with extensive skills in strategy formulation, research and analysis, project management and due diligence reviews.

Heathrow former head of cargo Platts to join Riyadh Airports

Heathrow Airport Ltd’s former head of cargo, Nick Platts, will join DAA International to help develop Riyadh Airports Company’s cargo operations.

Prior to being the Head of Cargo at Heathrow Airport in 2015, Platts was the first person to lead the cargo business at the airport for around 20 years.

Previously he headed up ground handling at Heathrow and has also worked for FedEx. Platts spent the last four-anda-half years preparing the west London airport for the cargo growth to come.

Nils Andersen appointed chairman of WFS

Nils Andersen has been appointed Chairman of the board of directors at Worldwide Flight Services.

Andersen joins the Board of WFS with a wealth of significant leadership experience navigating the complexities of multinational businesses. He will provide valuable perspectives from his last 19 years spent in executive and nonexecutive board roles at large listed and non-listed companies around the world, across several industries.

Stéphane Cassagne named Executive VP of Distribution & Express business at Geodis

Geodis has named Stéphane Cassagne as the executive vice president of the Distribution & Express line of business at Geodis.

In addition to this new role, he is a member of the Group’s Management Committee, which is chaired by Marie-Christine Lombard, chief executive officer of Geodis.

Stéphane Cassagne began his career in the Legal Affairs Department at Calberson in 1993, becoming Department Head in 1998. In 2003, he was named Senior VP, Legal Affairs for the GEODIS Group. In 2007, he took responsibility for the Group’s real estate, insurance and customs portfolios. Since 2013, he has served as Group Corporate Secretary.

B&H Worldwide CEO relocates to Singapore to spearhead APAC

B&H Worldwide’s CEO, Stuart Allen has been relocated from the UK to Singapore at the B&H Worldwide facility within the ALPS Free Trade Zone at Changi Airport to spearhead the company’s ongoing APAC expansion.

With an unparalleled knowledge of aerospace engineering logistics having worked in throughout the company’s network in a career spanning 26 years, Allen will be leading the company’s global growth plans from the nation state.

Robert Van de Weg joins ECS Group as CCO

ECS Group has recruited Robert van de Weg as Chief Commercial Officer to act as ‘a disruptive force’ to help the GSSA reinvent itself ‘to embody a new business model’. With his appointment, Van de Weg aims to reaffirm its ability to guarantee cutting edge service for airlines and offer them a range of comprehensive solutions.

Van de Weg, most recently vice president sales & marketing for Volga-Dnepr Group, previously worked with KLM Cargo, Atlas Air, Cargolux and Volga-Dnepr Group which includes AirBridgeCargo and ATRAN.

Edoardo Podestá takes the helm of Dachser Air & Sea Logistics

Dachser has appointed Edoardo Podestá, a seasoned Dachser manager, as the Chief Operations Officer of the company’s Air & Sea Logistics business field.

57-year-old Podestá joined Dachser back in 2003 as part of the management team for the Züst Ambrosetti Far East Ltd joint venture after Dachser had taken full control. In recognition of his successful expansion of the air and sea freight business in Asia, he was appointed Managing Director of the Asia Pacific business unit in 2014.

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report

Cargo capacity of airlines is expected to grow at a higher CAGR of 13-15 per cent The estimated `600-700 crore domestic dedicated air freighter market stood at 0.8 million in 2019, logging a CAGR of 8 per cent in the last five fiscals

Air freight demand may touch 1.1 mt by 2025 says CRISIL Research

In the long-term, increased freight concentration on select routes, integration with global freighters, and in-house logistics requirement will ensure growth of the segment A larger part of the cargo FY 20142019 period was transported in aircraft belly, a 14 per cent CAGR spurt in domestic airline capacity provided adequate room to support this growth The quantum of cargo moved by dedicated freighters hardly increased, bringing down their share of the pie from 23 per cent in fiscal 2014 to 16 per cent in fiscal 2019

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