One of the major segments of the aviation industry is the air cargo segment. The growth in international trade coupled with strong domestic demand for goods has boosted the market. The current scenario has shifted the focus of players in the aviation sector from passenger traffic towards developing their air cargo operations in order to capitalize on the opportunities in the market. Many new entrants have been seen as they take cue for the high profits accumulated by dedicated air cargo carriers over the years. The report begins with an overview of the industry indicating market size, growth, and domestic and international air cargo traffic figures. The international air trading partners, by region, has been highlighted based on the major goods imported and exported. The report highlights the various domestic and international terminals in India for air cargo and the facilities available at each of these terminals. An analysis of drivers explains factors contributing to the huge potential based on strong macroeconomic fundamentals, growth in retail, developing transportation system and growth in clearing and forwarding agents. The key challenges identified include rising air traffic fuel (ATF) prices, growing congestion at airports and delays in cargo handling & clearance. The report covers the initiatives taken by the government towards the development of the air cargo segment including changing FDI policy to attract investors, introduction of the Open Sky policy, various bi-lateral agreements and large scale investment to develop infrastructural capabilities. Competition section profiles the major players in the market. The section contains a snapshot of their corporation, financial performance and business highlights, providing an insight into the existing competitive scenario.

1. Air Cargo - India
July 2009

2. Executive Summary
Market valued at INR X bn in 2007-08; Expected to grow at x% p.a.
Cargo transported is dominated by pharma, textiles fashion goods, telecom, IT hardware, gems
Market and machinery parts
x % of all cargo is transported as belly cargo in domestic airlines
LE
International operations expected to grow at x% p.a. while domestic operations expected to
P
grow at x% p.a. by 2011-12
Drivers &
Challenges
Drivers
–
–
–
–
AM
Strong macroeconomic fundamentals
S
Growth in retail
Development of transportation system
Growth in clearing and forwarding agents
Challenges
– Rising air traffic fuel (ATF) prices
– Growing congestion at airports
– Delays in cargo handling & clearance
Changing FDI policy to attract investors
Government Introduction of the Open Sky policy
Initiatives Various bi-lateral agreements
Large scale investment to develop infrastructural capabilities
Many domestic and international players have entered the market in order to capitalize on the
growing opportunities
Competition
Domestic Players AA BB CC DD
International Players UU VV WW XX
AIR CARGO – INDIA.PPT 2

3. •Introduction
•Market Overview
•Drivers & Challenges
•Government Initiatives
•Competition
•Key Developments
AIR CARGO – INDIA.PPT 3

4. Air cargo traffic in India has been growing due to strong
domestic demand and rising international trade
Overview Market Size and Growth
•Air cargo market is estimated to grow at x%
p.a. and reach INR X bn by 2011-12 INR bn
•Largely dominated by pharmaceuticals, textiles 150 x% Z
LE
Y
fashion goods, telecom (like mobiles), IT X
100
P
hardware, gems and machinery parts which are W
V
time critical 50
domestic airlines
S M
•x % of all cargo is transported as belly cargo in
A
Growth Rate of Modes of Transportation
0
2007-08
Cargo Traffic
08-09e 09-10e 10-11e 11-12e
‘000 tonnes
Air – Import Cargo x% Domestic
2,000
International G
F
Ports (cargo) y% 1,500 E
D
B C
Railway (freight) z% Air cargo observed 1,000 A
the highest growth
Air – Export Cargo v% in the cargo 500
transportation
sector (2007-08) 0
2001-02 02-03 03-04 04-05 05-06 06-07 07-08
Source:
AIR CARGO – INDIA.PPT 4

5. Cargo Terminals: International
Location: Chennai
Overview Cargo Traffic
Established Feb 1, 19-- Export
LE
Area x sq. m. Import
‘000 MT
P
Export Wing 300 +13%
G H
F
M
Covered Area X sq. m. 200 E
D
C
A
Build up Stations x manual A B
100
Cargo Apron Capacity
Import Wing
Covered Area x sq. m.
S
x wide bodied aircrafts with ULD
parking area, hydrant refueling set-up 0
2001-02 02-03 03-04 04-05
Infrastructure and Developments
05-06 06-07 07-08 08-09
Perishable Cargo Facility • x airport terminals with one dedicated to cargo
flights; equipped with modern cargo handlers such as
Total Area x sq. m. forklifts and power hydraulic pallet trucks.
o o
Cold Chambers X sq. m. each, 0 -4 C • A new Integrated Cargo Terminal
o o This is being planned and is expected to span over x sq. m.
Examination: x sq. m., 12 -18 C
and Phase 1 has been commissioned
Other Sections Work Station: x sq. m.,7 ton capacity
o o
Receiving Area: x sq. m., 15 -18 C
• Expansion of the airport is expected and is going to
be constructed in Sriperumbudur taluk at an
investment of INR X bn
Source:
AIR CARGO – INDIA.PPT 5

6. Drivers and challenges
Challenges
Drivers Rising Air Traffic Fuel (ATF) Prices
Strong Macroeconomic Fundamentals
Growing Congestion at Airports
Growth in Retail
Delays in Cargo Handling & Clearance
Development of Transportation
System
Growth in Clearing and Forwarding
Agents
AIR CARGO – INDIA.PPT 6

7. Government has taken various measures towards developing
this segment by introducing major changes in the FDI policy
Sector Policy
Cargo and Non-
• Hiked to x% FDI from the initial permissible rate of y%
scheduled Airlines
Greenfield Airports • FDI up to x % is permitted through automatic approvals
FDI Policy • FDI up to x % is permitted through automatic approvals and up
Existing Airports
to y% with special permission from FIPB
• x% FDI is allowed in domestic airlines under the automatic route
(but not by foreign airline companies)
Domestic Airlines
• y% equity ownership by Non-Resident Indians (NRIs) is
permissible
• x% FDI in maintenance, repair and overhaul (MRO)
organizations, flying training institutes (FTIs) and helicopter
Others services
• y% tax exemption for airport projects for a period of X years in
order to attract investors
SAMPLE
Source:
AIR CARGO – INDIA.PPT 7

8. Domestic Players (1/10)
Company Snapshot: ABC Ltd
Corporate Information Financial Performance
Headquarters New Delhi
LE
Revenue Revenue Profit
Founded 19-- INR mn Profit / Loss INR mn
P
Fleet Size X 30,000 0 0
Parent ABC X Y
Subsidiaries
Key People
N.A.
•Mr.-- (Founder)
SAM
•Mr. -- (Owner, Jet Airways)
•Mr. -- (CEO)
20,000
10,000
0
Z -2,000
-4,000
-6,000
2005-06 06-07 07-08
Business Highlights Operational Performance
• It expanded its operations by introducing new daily Average Weight Load Factor
flights between Delhi-Srinagar via Jammu and Tonnes/day Cargo Carried %
Mumbai-Srinagar 70 D 80
60 C E
F
• Plans on introducing flights between Dubai-Nagpur as 50
B 60
Nagpur is expected to become a major logistic hub in 40
A G 40
India 30
• Cargo carried ranges from carriage of various 20 20
10
perishables, household pets, life saving drugs,
0 0
valuables and general goods 2001-02 02-03 03-04 04-05 05-06 06-07 07-08
Source:
AIR CARGO – INDIA.PPT 8

9. Thank you for the attention
The Air Cargo – India report is a part of Netscribes’ Aviation Industry Series.
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AIR CARGO – INDIA.PPT 9