Sas Cargo Set For Second Coming

SAS cargo service, a subsidiary of the Scandinavian Airlines System (SAS), will be back in the country in February. SAS, which was operational in India for a brief span from April to September last year, later withdrew from the market owing to constrained conditions.

The company had cited high handling costs and exorbitant fuel prices as the reasons for its exit from the Indian skies.

Initially, the company will launch unscheduled operations with three aircraft on an ad hoc basis. This will be followed by regular flights some time in the middle of the year, once the venture proves rewarding.

 

In fact, the excess cargo handling capacity had resulted in a fierce price war which resulted in low yields, thus tilting the balance of the air cargo market. SAS' fortunes saw great fluctuations because of the under-utilisation of its cargo handling capacity. Besides the capacity offered by its freighters, SAS can handle an additional 150 tonnes a month through its three passenger aircraft. Though its export cargo volumes rose from 110 tonnes in January to 171 tonnes in March, it declined to 131 tonne in June. Again it soared to 193 tonnes in September before dropping to a low 136 tonnes in December last year.

This time, however, SAS hopes to make good strides with market prospects looking up. Vikram Vohra, head of SAS cargo (sales), said the company is expected to register a growth of 10 to 15 per cent in value terms over previous calender year's figures, though in terms of tonnage, the growth is likely to be only marginal. This is mainly because of better value realisation with increased rates, he said.

However, it will still take the SAS a long way to clinch any substantial share in the market, especially in the export market. At present, its share is a meagre 3 per cent.

Lufthansa with a share of 11 per cent is the leader closely followed by Air France with 7 per cent. KLM, Singapore Airlines and Alitalia are also active in the field each with 5 per cent of the total market. Airports Authority of India export statistics for 1995-96 reveal that SAS and and Swissair with 3 per cent each are also in the line.

As part of the relaunch plan, the company has decided to relocate its hub from Sharjah in United Arab Emirates (UAE) to New Delhi, thus changing its Hong Kong-Sharjah-Gothenburg cargo route to Hong Kong-New Delhi-Gotenburg. SAS will be using Boeing 747 for the exports while the import route is likely to be operated with B767s.

Besides, SAS is looking forward to increase in its passenger flight frequnecy from the present three to five a week through revision of its bilateral agreement. This also is expected to further boost its cargo handling capacity.