AAI to set up unit for cargo operations

Engages RITES to help in business model for smaller airports

The Airports Authority of India (AAI) is planning to set up a company to handle cargo.  AAI is betting on air cargo movement to grow exponentially, as India embarks on improving regional connectivity using smaller planes. It has engaged RITES, a state-run infrastructure consultant, to help with a business model for the new entity. Chairman of AAI R K Srivastava said: “The cargo business has not been attended to in the last 60-70 years. It has been ignored for too long.”

At AAI, we feel this throws up new opportunities. RITES will submit to us the proposal this month and we will decide upon the business model.” India’s draft civil aviation policy envisages regional connectivity, with smaller planes connecting various towns across the country.

It also estimates passenger traffic to double to 380 million in seven years. This might also lead to an increase in cargo movement in smaller towns. The government plans to upgrade the 400-odd unused airstrips built in the early 20th century, during World War-II, for regional connectivity.

The draft civil aviation policy identifies air cargo as a potential employment generator for semi-skilled workers. It constituted an Air Cargo Logistics Promotion Board to promote air cargo by cost reduction, improved efficiency and better coordination between ministries such as Customs and excise. The aim is to cut the time taken to move cargo from an airplane to truck by 2017.

Srivastava said AAI would have to reorganise internally and upgrade manpower skills to meet the growth estimates once the new policy was implemented. The new policy was expected to be in place by April 2016.

Indian airports can handle 250 million passengers, while the passenger throughput is around 190 million. “Before the policy, our plan is to invest Rs 20,000 crore in the next five years to add capacity for 50 million passengers,” he said.  “We need to build the ecosystem to create the remaining capacity for 100 million passengers over seven years.”