Air India Cargo will lease its freighters to gain revenue

AIR India Cargo, a unit of the National Aviation Company India, plans to lease its freighters to increase revenue by 10 per cent to INR900 crore (US$250.9 million) in 2008-09, reports India's Economic Times.

The company, which was created after merging Air India and Indian air cargo operations, is converting six B737-200 passenger aircraft into freighters. The converted planes will then be leased to India Post and the logistics firm, Gati. Air India Cargo along with India Post has already started freighter service to the northeast region. It has also started operation on the Bombay-Delhi-Bangalore route.

"There is immense opportunity to tap in the cargo leasing business in the country. We would increase our revenue from the cargo business to INR900 crore from INR 800 crore in the next year. At present, there is some manpower-related problems due to merger of the two airlines but it would be sorted out," said an Air India official.

The new cargo airline is in the process of acquiring freighter aircraft by way of conversion of B-737 and A-310 passenger aircraft. The first A-310 freighter aircraft has already started operations to the Gulf and Europe. There are plans to have a freighter fleet of at least 10 aircraft by the end of this fiscal year.

Air India has converted two of its A310 passenger aircraft into dedicated freighters and will deploy them on the India-Europe route.

As it stands. India's air cargo market is three per cent of the world's, but is expected to grow 9 per cent over the next 10 years to nine million tonnes from the current 1.6 million tonnes.