AI cargo business may report 30% higher revenue in FY14

Written by Rhik Kundu | Mumbai | Updated: Mar 5 2014, 09:36am hrs
State-owned Air India, which is reeling under a heavy debt of over R44,000 crore, expects to post around 30% higher revenue, at R1,200 crore, for its cargo segment during fiscal 2014, according to official sources.

During FY12 and FY13, the airline had reported revenues of R835.11 crore and R932.58 crore, respectively, for its cargo business. However, the national carriers overall losses for FY14 would be in the region of R3,900 crore, despite a projected 18% jump in revenues to R19,500 crore. The airline had reported a loss of R5,200 crore for 2012-13 and R7,560 crore the year before.

Airline officials said that though the companys bottom line may be in red, its cargo vertical has been doing good business in the last few years.

However, FE couldnt independently obtain the profit/loss figures of the airlines cargo business.

We dont have a profit./loss figure for our cargo vertical like we do for our overall balance sheet, officials said.

The airline carried about 158,220 tonnes of goods during FY 2013 compared with 137,000 tonnes during a year before. During April-December 2013, Air India carried 131,055 tonnes compared with 102,013 tonnes it carried during the same period of the previous year.

The ratio of international and domestic cargo stands approximately at 70:30. While there is more demand in the international segment, the domestic cargo segment is seeing growth too, officials said adding, We are expecting the revenue for our cargo segment to grow at more than 30%, on a year-on-year basis, in the coming years.

Air India currently operates to 31 international destinations and 62 domestic destinations, comprising 130 international departures and 277 domestic departures daily. It carries cargo in all these routes.

While the busiest international routes for cargo are Europe, comprising London, Frankfurt and Paris, Far East, and Middle East, the same for domestic routes are metro cities, which attracts most of our cargo volume, officials said.

On the international front, we have to improve our performance on the US route, which is not doing as well as other routes, while on the domestic front the demand for cargo services in routes connecting metros with non-metros is rather low as compared to routes connecting metros, the airline officials added.

Meanwhile, with more space for cargo and newer locations on chart, the airline has pinned its hopes on Dreamliners for further growth of its cargo segment.