For the cargo arm of Hong Kong-based airline Cargo Pacific, the Indian market is full of opportunities. Tom Owen, director of Cargo at Cathay Cargo, said, “We are facing more opportunities than challenges in India. There are no challenges that we can’t overcome. The Indian market has always been very important and it’s only got more important over the last 1-3 years.”
The company has seen a good recovery in cargo demand from India, which surprisingly started to shoot up during COVID-19. The company is seeing a good cargo demand for automotive parts, pharmaceuticals and IT products.
Owen said, “Over the COVID period, the strong export performance of the Indian economy to the rest of the world was quite pronounced. There’s good robust export growth and we’ve been increasing our frequencies. We operate between 15 and 18 flights a week at the moment which carry 100-110 tonnes of cargo per freighter and operate 30-32 flights a week through belly storage in passenger flights. We are definitely seeing good demand around things like automotive parts, things like pharmaceutical products, things like electronics. We’re hopeful we can continue to grow into the Indian market.”
Cathay Cargo currently operates 13 flights a week to three Indian cities; Delhi, Mumbai and Chennai. The cargo carrier is also hoping to expand its operations to more cities in India. Owen said, “We would like to expand our operations to Hyderabad and Bengaluru. The market has been pretty, pretty encouraging and India represents a key part of our overall network. We were focused on active operations.”
Tom is also impressed with the pace of infrastructure transformation in the country. He added, “The development of infrastructure in India has been pretty impressive. There is a lot of optimism around the infrastructure developments and the investment that’s going on into both airports and also highways feeding into airports. This is allowing cargo to flow more efficiently in the future.” However he feels apart from metro cities, there are certain challenges in infrastructure for global cargo operations which should also be improved.
Cathay Cargo is on the path to achieving the targets that were set for the current financial year. The airline is still in recovery mode after the pandemic and is focusing on capacity expansion. Owen added, “We have been rebuilding capacity last year and this year we will continue to grow our wide-body passenger aircraft out of Hong Kong. This will give the Indian market more opportunities to fly into places like China, Southeast Asia, and Australia. So we’re on track. We finished last year strongly in India and we’re on track this year to continue to grow.”
Cathay Cargo is in talks with manufacturers that have higher export potential including the iPhone maker Apple and more automotive and mobile phone companies. Cathay Cargo is also servicing more broad-based contracts in Mumbai and Delhi with the freight forwarder community.
The cargo carrier is facing challenges due to the geopolitical situation in East Europe and West Asia. Owen said, “The flight time between Hong Kong to Europe has increased by one to two hours. Because of the situation in the Red Sea area, the rate has increased for air cargo, given the increased shipping times going around Africa. So, this has led to elevated rates at the moment which is benefiting us to some degree.”
Owen does not see any challenge from Indian carriers as most of the cargo demand is being catered through belly ops in passenger flights. He added, “The challenge with Indian airlines is how they can grow that air cargo both domestically and internationally as there is a target of 10 million tonnes a year by 2030. Indian carriers need to think how they can do that in conjunction with balancing additional foreign capacity coming in as well as local capacity.”
He further said, “We are hoping to be able to fly to additional points like Hyderabad, Bengaluru, Kolkata and other cities. India is striving for us to have enough capacity to sustain its overall competitiveness as a global economy going forward. That’s the real challenge that everyone faces over the next few years.”
Cathay Cargo’s Director is also happy with the policies of the Indian government. He said, “We are willing to deploy more freighters to India. Overall the measured expansion policies of the Government of India are understandable and we’re happy with that.”
The company is not focusing on market share rather the focus is on increasing its services. Owen said, “We don’t look at it as market share per se, we’re more interested in the quality of revenue. Our strategy is to carry as much specialised cargo as we can. As per our ‘Project Cargo ‘ we are looking at increasing the movement of pharmaceutical products and are exploring the potential of carrying fresh and perishable products. So, it’s more about the quality of the carriage rather than absolute market share. But it’s fair to say I think we’re the largest operator of freighters in India.”
Cathay Cargo currently operates 30-32 passenger flights and 13 cargo flights to India. Cathay Cargo freighters operate five flights per week from Delhi and Chennai and three flights per week from Mumbai. The belly capacity is used on passenger flights out of Delhi, Mumbai, Bengaluru and Chennai.
