Rivals force Air India Cargo to drop Mumbai-Paris service

Written by Shaheen Mansuri | Mumbai, Jan 25 | Updated: Jan 26 2008, 06:05am hrs
Air India Cargo (AIC) will soon withdraw its cargo operations from the Mumbai-Paris route, and instead, will deploy its two freighter aircraft in South East Asian sectors like Hong Kong and Singapore. AIC had started its Paris operations in June 2007 and will withdraw services due to stiff competition from airlines like Air France and Lufthansa.

Confirming the news, Wolfgang Scholinz, cargo sales manager at Air India, told FE, Airlines like Air France and Lufthansa offer cheaper rates than AIC for uplifting cargo. The market in Paris has not accepted the product (AIC) due to higher uplifting charges. It is learnt that the charges for uplifting cargo by the rival freighter aircraft on the Paris-Mumbai route is less than euro 30 per kilogram, which is nearly 25% less then what AIC charges to its customers on the route.

Meanwhile, Air India is planning to spruce up its revenues from the cargo business to Rs 1,000 crore this fiscal compared to Rs 850 crore in the previous financial year. For the purpose, it has sent its team to markets like Los Angeles, Toronto, Chicago, New York, London, Australia, Africa and Sydney to study the cargo market.

Says PK Gupta, executive director, sales and marketing (cargo) Air India, The officials who have gone to various cities across the globe to study how we can spread our cargo operations will submit a report on March 31st. Accordingly, we shall decide on the future course of action to spread our cargo business across the globe.

For capturing the cargo markets across continents, AIC will deploy nearly 41 aircraft gradually. (B737s, A310s and B747s will be used for the purpose.)

Our long term plan is to make AIC a separate profit centre and everything that we will do will be evaluated in terms of cost and profit, adds Gupta.