'Air Cargo Business A Two-Way Street'

Matching in and out passenger traffic for an airline is not much of a problem since those who go out mostly return. But cargo is a different ball game; trade does not always balance, least of all

merchandise dispatched by air. And so, what kind of freight rates a carrier can offer depends on how

evenly balanced the two-way traffic is.

To Denis Connolly, general manager regions of British Airways (World Cargo), who was in Delhi last week, the prospects of all quantitative restrictions on imports going in a couple of years are exciting. This will raise import volumes and match exports, making prospects in India look "most favourable".

 

For the Indian exporter of say flowers or high-value fashion garments, this will mean more attractive freight rates from carriers which can spread costs over two-way traffic. India is currently served by BA's services between the UK and Hong Kong and increasing frequencies are clearly on the cards.

Since flights from Europe are lighter than the ones to Europe, "it will become easier to raise frequency if we get a better flow of business to India," explains Connolly.

This apart, two developments have improved the prospects of the cargo business of BA, which contribu

tes 8-10 per cent to its total

revenue.

In an attempt to improve yields (get rid of traffic that yields low or non-existent margins), BA has planned to reduce its passenger capacity next year by 2 per cent. So cargo will have a bigger share of the smaller capacity cake, so to speak. BA is also going in for a big induction of the Boeing 777, the latest long-haul aircraft which has smaller capacity than the jumbo and, what is good for Connolly, is "very cargo efficient". Connolly has to try hard to live down the reputation that cargo has of being the poor cousin in BA to which traditionally passenger traffic has come first by a long margin, unlike in some of its competitors which have paid more attention to cargo.

But things have begun

to change since the massive