Air India to strengthen cargo business

With India's surging two-way trade now estimated at $250 billion, Air India has identified air cargo business as a major revenue-stream for the future and will foray into it in a big way with a fleet of 15 aircrafts. Air India's Chairman V Thulasidas said that India's flag-carrier is already in the process of converting two of its Airbus 310 aircrafts into cargo carriers. With the company acquiring 68 new Boeing aircrafts, it will convert two 747-300s into cargo carriers. It has six more A-310s, which it proposes to convert in a phased manner. Thulasidas said that after the proposed merger of Air India and Indian, five Boeing 737-200 aircrafts, now with Alliance Air, a subsidiary of Indian, will also be converted into cargo carriers.

Once these plans fructify, the merged airline will have a reasonably large cargo fleet to cater to varying distances and destinations. "We have identified air cargo business as a major revenue stream for us going forward," he said. Air India is currently in the process of implementing its $9 billion fleet expansion programme, for which it has tied-up a $7-billion Line of Credit with ABN Amro. The 68-aircraft acquisition has already begun with four 737-800s already acquired for its budget airline, Air India Express. Thulasidas said, the carrier is expected to get one new aircraft every month from now till 2011. He said that apart from 18 737-800s for Air India Express, the airline will acquire 23 777s for long-range operations besides 27 state-of-the-art 787s.

The first of the 777s will be acquired in April 2007. Of the 23, eight will be 777-200 LR (long range) and 15 will be 777-300 ER (extended range), he said, adding that the 787 aircraft delivery will begin in 2008, after its launch by Boeing. Thulasidas said the six Boeing 747-400s that Air India has will continue to be in operation for the next seven-eight years, adding that the two old 747-200s will be phased out with the acquisition of the new aircraft. He said, it was a conscious decision not to go for bigger 747 or Airbus 380 aircrafts, as the company wanted to have more aircrafts in its fleet to cover more destinations. The airline will, however, review after 2011 whether to go in for new 747s or A380's but as of now "there are no plans to acquire them", Thulasidas said.

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