India air cargo still suffering due to lack of infrastructure

Despite expectations of air freight growing 20 per cent in India by 2012, Air India, Kingfisher Xpress and Jet Airways say the business is stalled by a lack of infrastructure and industrial know-how.

Ernst and Young partner Sushi Shyamal said that moves towards ground handling will bring in revenue, but what India needs more is the creation of warehousing and multi-modal links at local level, reports the Hindu's Business Line supplement. The sector also needs "an integrated logistics approach that covers the first mile and last mile connectivity," he said.

Air India's cargo chief Anita Khuran agreed that his division only accounts for five to 10 per cent of revenue and with most capacity in passenger bellyholds and not with its 20 all cargo freighters.

But Frost and Sullivan analyst Chethan Kambhi said capacity is not so much a problem as the sheer infancy of the India air cargo sector, which needs three to four years to mature.

"Entrants like Deccan 360 or Kingfisher Xpress - a door-to-door cargo delivery service - are still trying to understand the real dynamics of the business," said Mr Kambhi.
Foreign investment is also important and more is sorely needed at airports at Chennai, Kolkata, Hyderabad and Bangalore as well as other across the country, he added.