AI commercial fleet to fly cargo

Will carry cargo in the belly of passenger planes, expects earnings to increase 20-30 per cent.

Air India is leasing out all freighters and will carry out cargo in the belly of its commercial fleet to enhance revenue and make loss-making routes profitable.

National Aviation Company Ltd (Nacil), which runs Air India, has a fleet of 10 freighters. Seven have been leased out and the rest are in the process of being leased out.

“The cargo business is essential for our bottomline. There is lot of space in the belly of the commercial aircraft and is highly underutilised. Hence, using this space will make many of our routes profitable,” said a senior Air India official, on the condition of anonymity.

Another Air India official, who didn’t want to be named, said they were making huge losses from the cargo business. “Our freighters provide around 40 tonnes of space, much more than the demand in the market.”

“We have space for two tonnes of cargo in the belly of our commercial aircraft, which is sufficient to meet the amount of cargo we book.”

The cargo business accounts for 10 per cent of the airline’s total revenues. Air India aims to grow these earnings to 20-30 per cent of the total revenues and make routes profitable, according to the first official.

Air India, which is reeling under losses of over Rs 7,000 crore, will get an equity infusion of Rs 1,200 crore for 2010-11, as earmarked in the Budget, apart from the Rs 800 crore received in this financial year. Of the Rs 800 crore, the airline got the first instalment of Rs 400 crore in February and will receive the rest this month.

However, the airline has not been able to meet its targets for 2009-10, when it was expected to save over Rs 2,000 crore from various measures. According to the civil aviation ministry, it has been able to save only Rs 800 crore.