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SpiceJet overtakes Blue Dart in air cargo, IndiGo well ensconced at top

IndiGo had a market share of nearly 34 percent in the domestic cargo market in August this year, compared to 23 percent in the same period last year.

October 31, 2019 / 04:01 PM IST
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Just like in the passenger segment, IndiGo is building up a huge lead over its competitors in the domestic air cargo business. At the same time, SpiceJet is also on the fast lane, and has grown faster than most of its peers this year.

In fact, the Ajay Singh-led airline overtook Blue Dart in August to become the second largest in the air cargo segment.

Numbers from industry regulator DGCA show that IndiGo had a market share of nearly 34 percent in the domestic cargo market in August this year, compared to 23 percent in the same period last year.

On the other hand, SpiceJet's market share stood at almost 16.9 percent in August, up from 11.2 percent, a year ago.

Overall, for the eight months of the calendar year, IndiGo's share stood at a little over 31 percent. SpiceJet's was at 14.5 percent. The airline carried 11,256 tons of freight in August, compared to Blue Dart's 10,921 tons, and in the process becoming the second largest air cargo mover in the month.

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To be sure, overall for the eight months of the year, Blue Dart continues to have a slight edge over SpiceJet. But given SpiceJet's faster growth rate, it may end the year at a spot higher than Blue Dart.

The quick growth in cargo business comes even as the government is giving shape to National Air Cargo Policy to facilitate better movement of goods and improve the ease in doing business.  Logistics costs in India comprise about 13-14 percent of GDP as compared to 7-8 percent in developed countries.

This is despite air cargo handled at Indian airports already growing at a CAGR of 10 percent, from 2013-14 to 2017- 18. Experts expect the growth to accelerate in the coming years.

Growth rate

SpiceJet, which runs the cargo business under unit SpiceXpress, had inducted its first freighter aircraft, a Boeing 737-700 last year.  At present, it has two Boeing 737-700s.

Earlier this year, in September, SpiceXpress had also taken a delivery of  its first 737-800 Boeing converted freighter.

Apart from these freighters, the airline also uses its fleet of 101 aircraft to deliver cargo. IndiGo, on the other hand, carries cargo in the belly of its 247 aircraft, and doesn't have a dedicated freighter.

Blue Dart has a fleet of six Boeing 757 freighters.

SpiceJet has grown by 46 percent from January, when it carried 7,705 tons, which increased to 11,256 tons in August. IndiGo, on the other hand, grew by 36 percent. But IndiGo numbers include, both freight and mail. SpiceJet doesn't carry mail.

Competition for Blue Dart may also come from GoAir, which has also expanded its fleet this year, pushing its cargo capability too.
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: Oct 31, 2019 04:01 pm

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