With a large no. of challenges in front of Aviation industry, the growing cargo sector would not only help to increase the profit of different airlines, it can also serve as a lifeline in times of crisis. As the oil prices continue to increase and are expected to even touch 200$/barrel mark, there is tough time ahead for airlines.
With supportive government policies and in a developing economy like India there is no stopping for cargo business. It is said that there is a room for every one in the cargo industry. Everyone from airline giants to small courier services corporate are looking to capitalize in this growing sector. More mergers and acquisitions are expected in near future.
The government recently allowed the foreign carriers to have a 74 per cent stake in Indian cargo carriers. A total of 49 per cent FDI was earlier allowed in the cargo sector, but no investment by a foreign airline was permitted. According to a recent CARE report, in India there are nearly 2,500 companies in this segment— the huge potential and demand looks tempting. According to analysts, the opening up of the Indian economy to foreign investments is expected to attract more companies into the country, thereby adding momentum to market growth.
As per industry estimates, the Indian express industry is valued at Rs 7,000 crore and is growing at approximately 25% annually. Asia will witness the highest growth rates and India will account for almost 9% of this annually, as compared to the world growth rate of 4%. And in this whole number maze, India emerges as a priority market.
Today, the domestic express makes up about 58% of the total market, of which a little less than half is in the organised sector. The unorganised and semi-organised segments, comprising largely of regional and intra-city service providers, and EMS Speed post, account for the rest. Blue Dart, one of the pioneers in the industry clocked a profit of Rs 69.93 crore after taxation for the year ended December 31, 2007, up by 39% from the corresponding period of the previous year. Though Blue Dart has no plans to partner with a foreign airline, the company feels that all major companies will be looking out for opportunities to acquire small domestic companies and enter into the sector.
FedEx in India has grown almost 5 times in past one decade.
DHL Express India holds a market share of 60% in terms of shipments and handles over 7.2 million shipments in 2007. As per industry estimates, the Indian express industry is valued at Rs 7,000 crore and is growing at approximately 25% annually.
Some News:
15th Jul 08: The man who revolutionised aviation in India with his low-cost airline, Air Deccan, is set for a new beginning in the cargo and logistics space. Capt G R Gopinath is planning to raise $50 million through private equity to part-fund his $200 million cargo venture.
28th may 2008: With petrol prices expected to cross $200 per barrel in the near future, Jet Airways chief Naresh Goel said the aviation industry was headed for a deep crisis due to price wars among airlines, at home and abroad.
12th May 2008: SpiceJet announced the launch of its cargo operations in the country. Initially, the service would cover eight major cities and would be expanded to all 18 destinations of the airline in the second quarter of the current fiscal.
5th Mar 2008: As part of its diversification plans, low-cost airline SpiceJet is aggressively looking at cargo business and has already started putting in place the necessary infrastructure.
8th Feb 08: UB Group promoted Kingfisher Airlines is planning to float its own dedicated cargo airline through a tie-up with a foreign carrier.
8th Feb 08: Full service carrier Jet Airways is also planning to launch its dedicated cargo operations through a tie-up with the German carrier Lufthansa.
With supportive government policies and in a developing economy like India there is no stopping for cargo business. It is said that there is a room for every one in the cargo industry. Everyone from airline giants to small courier services corporate are looking to capitalize in this growing sector. More mergers and acquisitions are expected in near future.
The government recently allowed the foreign carriers to have a 74 per cent stake in Indian cargo carriers. A total of 49 per cent FDI was earlier allowed in the cargo sector, but no investment by a foreign airline was permitted. According to a recent CARE report, in India there are nearly 2,500 companies in this segment— the huge potential and demand looks tempting. According to analysts, the opening up of the Indian economy to foreign investments is expected to attract more companies into the country, thereby adding momentum to market growth.
As per industry estimates, the Indian express industry is valued at Rs 7,000 crore and is growing at approximately 25% annually. Asia will witness the highest growth rates and India will account for almost 9% of this annually, as compared to the world growth rate of 4%. And in this whole number maze, India emerges as a priority market.
Today, the domestic express makes up about 58% of the total market, of which a little less than half is in the organised sector. The unorganised and semi-organised segments, comprising largely of regional and intra-city service providers, and EMS Speed post, account for the rest. Blue Dart, one of the pioneers in the industry clocked a profit of Rs 69.93 crore after taxation for the year ended December 31, 2007, up by 39% from the corresponding period of the previous year. Though Blue Dart has no plans to partner with a foreign airline, the company feels that all major companies will be looking out for opportunities to acquire small domestic companies and enter into the sector.
FedEx in India has grown almost 5 times in past one decade.
DHL Express India holds a market share of 60% in terms of shipments and handles over 7.2 million shipments in 2007. As per industry estimates, the Indian express industry is valued at Rs 7,000 crore and is growing at approximately 25% annually.
Some News:
15th Jul 08: The man who revolutionised aviation in India with his low-cost airline, Air Deccan, is set for a new beginning in the cargo and logistics space. Capt G R Gopinath is planning to raise $50 million through private equity to part-fund his $200 million cargo venture.
28th may 2008: With petrol prices expected to cross $200 per barrel in the near future, Jet Airways chief Naresh Goel said the aviation industry was headed for a deep crisis due to price wars among airlines, at home and abroad.
12th May 2008: SpiceJet announced the launch of its cargo operations in the country. Initially, the service would cover eight major cities and would be expanded to all 18 destinations of the airline in the second quarter of the current fiscal.
5th Mar 2008: As part of its diversification plans, low-cost airline SpiceJet is aggressively looking at cargo business and has already started putting in place the necessary infrastructure.
8th Feb 08: UB Group promoted Kingfisher Airlines is planning to float its own dedicated cargo airline through a tie-up with a foreign carrier.
8th Feb 08: Full service carrier Jet Airways is also planning to launch its dedicated cargo operations through a tie-up with the German carrier Lufthansa.
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