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AIR India is to launch its all-freighter operations from June to meet the challenge of foreign carriers, which have expanded cargo capacities to exploit the country's export boom, the Hindustan Times reported.
Initially, Air India's first all-cargo aircraft, converted from A310 passenger aircraft, will be deployed in the Kerala-Gulf sector.
Air India, which in the early '90s had an air cargo market share of 30 per cent, is planning to regain it with plans to have a have a fleet of 10 to 12 cargo carriers serving the to the Arabian Gulf, US and Far East in three years.
Apart from its own converted aircraft, additional capacity would be leased in the future, the report said quoting Air India officials.
"India has been experiencing an upsurge in the import-export market. This is a step taken to cater to the growing import-export demand. There is lot of demand for exports of leather, flowers, vegetables and fruits and high value imports," said Air India finance director S Venkat.
Mr Venkat also explained that a full-fledged cargo operation can also improve the yields without affecting passenger operations.
"Currently cargo yield is 40 per cent of the passenger yield. Passenger operations are always more rewarding than cargo service. But the yields can match provided the load factor is high in an all-cargo set up," he said.
The breakeven mark in passenger service is 65 per cent load factor while it is higher at 75 per cent is the tipping point for cargo, the report said.
Currently, Air India generates INR4 billion (US$97.11 million) revenue from cargo operations, carried out by its passenger aircraft.
"We will see an improvement of 10 to 12 per cent in revenue growth from these all cargo operation," said Mr Venkat.
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