Indian logistics major, Gati, has signed a joint venture pact with Air India Cargo in a move aimed at providing competition in the domestic cargo aviation space to Blue Dart Express, owned by DHL, a unit of German postal services giant Deutsche Post.
Gati managing director and chief executive, Mahendra Agarwal, said that his firm would lease up to five freighter aircraft by March 2008 from Air India Cargo, a unit of state-run National Aviation Company Ltd (NACIL). He added that the aim was to garner 11 per cent market share by December 2008.
According to Agarwal, the freighters would help the company carry more cargo with no restrictions on timings, quantity or type. For Gati this is a move up in the airfreight business, as it will now transit from hiring limited space in the belly of passenger aircraft to leasing an entire plane''s capacity.
The capacity increase would enable Gati to carry more perishable commodities, such as flowers and vegetables and refrigerated products like pharmaceuticals.
India''s domestic air cargo industry, which is dominated by Blue Dart Express, has been growing at a compounded growth rate of over 11 per cent over the past five years.
According to estimates, a booming economy may see domestic air cargo grow to 500,000 metric tonnes by March 2008, at a 20 per cent growth rate every year, over the next five years.
Gati expects the share of its aviation cargo business to double to 20 per cent in the fiscal year to June 2009, with revenues reaching $254 million.
Air India Cargo will continue to run its own logistics business separately and expects cargo operations to contribute a revenue of $228 million in the fiscal year to March 2008.
Gati plans to have a fleet of 10 freighters by July 2008.