Indian Airlines and Emery Worldwide have entered into a strategic
alliance for transporting cargo between Singapore and India. Indian Airlines has announced
a reciprocal arrangement with Emery under which it will guarantee space on its planes to
Emery in return for guaranteed volumes and revenue from Emery.
Emery is primarily a freight transportation company. Emery
Worldwide is a subsidiary of the $5 bn transportation and freight major CNF Inc.
Indian Airlines says that cargo has always been a profit
centre for the airline, and it expects incremental revenue of at least Rs 1 crore for a
six-month period from this alliance. Emery is also very optimistic about the alliance, and
says it expects its cargo movement to India to double to around 300 tonnes per year
by the year 2000, and revenues from Indian operations to hit Rs 120 to 130 crore by the
According to the agreement, Indian Airlines would bring
cargo for Emery from Singapore to Chennai and fly it to Bangalore, Delhi, Mumbai and
Calcutta, and will guarantee space on five of its Singapore-Chennai flights.
Sources in the industry say that cargo movement between
Singapore and India has been steadily rising in the past few years and that the
Singapore-India sector is important for the airline as it constitutes 30 per cent of its
international cargo traffic.
The company has been said to be exploring opportunities to
expand in areas such as logistics and value-added services, cargo handling at airports and
warehousing for large companies in India. At present, Emery has a turnover of Rs 50 crore
in India, which is expected to grow annually by 40 per cent. Earlier this year, the
company had evinced interest in Maruti Udyog to provide its management expertise and
modern technology to move the vehicle and spare parts of the company more efficiently to
dealers and retail outlets.
The company already provides warehousing and networking
facilities to multinationals such as General Motors and Hewlett Packard in India.
The company was also said to be showing interest in the
Indian Railways and the Airports Authority of India for a tie-up.
Emery specializes in premium, time definite transportation
services for business-to-business shippers of heavy weight cargo. Nealy two-thirds of the
business of the company comes from North America while the rest is shared by Europe, Asia, Japan and Latin America.
Emery operates in 229 countries through a network of 560 service centres and agent
locations around the world.
Emery has a fleet of 120 aircraft, most of which are used
by the US postal department.