Jet fuel prices continue to take a toll on India’s nascent cargo airlines sector even as lack of earlier experience hobbles its growth.

The scope for cargo operations to blossom in India is enormous. The economy is on the rise (albeit at a slightly slower pace than was visible a year ago), business houses are on the ascendant and only 1 per cent of the total freight movement in the country is by air at the moment (the global average is 2 per cent). However, jet fuel prices continue to take a toll on India’s nascent cargo airlines sector. Lack of earlier experience is another factor that hobbles the cargo sector’s growth along its learning curve.

Win some, woe some

Blue Dart, the largest domestic aviation cargo carrier, owned by DHL India, a unit of German postal services giant Deutsche Post, seems to have got over its infancy woes and is moving along fairly well (despite rumours that all its problems are not yet over). The second largest courier firm in India, First Flight Couriers Ltd, closed its cargo airline operations last year after it wobbled uncontrollably when hit by an accident to one of its aircraft. Quikjet, despite having spent months in the build up, and despite having an aircraft (a Boeing 737 300, sitting idle on the ground in Chennai), is yet to obtain its Air Operator’s Permit from the DGCA.

Chennai-based cargo airline company, Crescent Air Cargo Services Private Limited, which runs Crescent Air, has temporarily suspended its operations due to mounting losses. Crescent Air was operating a Fokker 50, a turboprop-powered aircraft, on the Visakhapatnam-Kolkata route, carrying perishable commodities. Perhaps the mistake was in trying to start up with one aircraft—a situation that certainly does not make for economy of scale. Crescent Air is expected to re-start its operations by acquiring two more Fokkers or ATR type aircraft with similar cargo carrying capacity.

Another carrier, Flyington Freighters Private Limited, promoted by a Hyderabad-based business family whose members also own the Deccan Chronicle newspaper, has delayed the launch of its dedicated cargo plane operations. As per the original plan, Flyington was supposed to launch its operations in July, 2008 with two, old A330 cargo aircraft from a leasing company, arranged through Toulose-based Airbus SAS. However, the company changed its mind on discovering some problems with the aircraft and decided to fly with new aircraft. It has signed for six A330-200F aircraft, the newest freighter from Airbus; the first aircraft will join Flyington’s fleet in the second half of 2009.