India Post plans to lease freighter aircraft

Inefficiencies in postal communication have long been a problem in the north-eastern part of the country. Not anymore, if the Department of Post’s (DoP) plans come to fruition. The DoP is close to acquiring a freighter, a Boeing 757 from Indian Airlines, on a wet-lease of Rs 12 crore, specifically to service its North-East operations. The DoP has been facing an acute problem with respect to conveyance of mail in the north-eastern region in the absence of a reliable rail, road and air network. In response to a question in the Parliament, Shakeel Ahmad, minister of state for communications and information technology, said, “In addition to an initial one time expenditure of Rs 12 crore, around Rs 36 crore will be incurred on this account every year.”

This amount will include fuel charges, handling charges and other operational expenses. Mr Ahmad added, “The prime objective of this proposal is to provide to the North-East region quality of service at par with that rendered by Department of Post in the rest of the country. It is also expected to generate additional revenue in terms of increased mail volumes.” Although Mr Ahmad stated that the move is in the direction of generating more revenues, DoP officials refused to share details of the expected return on the investment. “The plan is still in the assessment stage, so it will be difficult to comment. But India Post will be flying a freighter latest by mid-June,” said a senior DoP official, who requested for anonymity. This move by India Post is a part of strengthening the Universal Service Obligation (USO), rather than a highly profitable business opportunity. Says an India Post official, “The direction comes from the government’s interest in the development of the North-East region.

While in-bound volumes to the region are likely to be there, outbound traffic will really not be that great.” Considering the fact that DoP will be incurring such huge investments in setting up dedicated operations for the region, it could have made more sense for it to tie up with other private operators having a strong presence in the region. Blue Dart, the domestic express operator, carries a total of around 8 million shipments to the north-eastern region. The load is entirely in-bound. Essentially, the North-East continues to be ill-serviced by both India Post and various private courier operators. So any move in structuring operations in an efficient manner is bound to be beneficial and generate volumes in the long term.

Courtesy: PTI

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