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Air cargo traffic looking up in India; Cargo handling capacity in airports needs to be beefed up

The domestic Air cargo volumes have grown by 13 per cent during the first five months of the current financial year from April to August 2018 while international air cargo volumes ferried by Indian carriers had gone up by six per cent year on year basis during the same period according to figures released by the Director General of Civil Aviation DGCA

The upward trend seems set to continue during the course of the financial year. The air cargo market in the country has high potential fuelled by factors such as the E-Commerce boom and sectors such as Pharma that have quick transportation requirement.

With the expected growth in the economy, air cargo traffic in India is expected to grow by around 60 per cent to 4.7 million tons in the next five years, translating into a compounded annual growth rate (CAGR) of 9.7 per cent according to rating agency ICRA

Airlines in India are all geared up to avail of the opportunity, and have even inducted freighter aircraft into their fleet. Belly cargo in the regular passenger carriers currently makes up for about 80 per cent of domestic air cargo volumes in the country.

International cargo business to and from India is also projected to increase further, given that most of the countryís airlines are already flying in international routes. West Asia currently accounts for much of the cargo traffic to and from India.

Air cargo infrastructure in India is increasingly getting constrained by the strong growth in traffic in the last few years, and that the cargo handling capacity at Indian airports needs to be upgraded by around 2 million tons over the next five years, the rating agency has suggested, .

Data from aviation regulator DGCA shows that itís not just passenger numbers, but cargo traffic too is growing at a brisk pace for Indian air carriers.

The data also informs that domestic air cargo volumes in 2017-18 (about 7 lakh tons) grew about 9 per cent y-o-y, much faster than in the previous years.

Also, Indian carriers have been increasing their share of the pie in the fast-growing international air cargo market. In 2017-18, total international air cargo volumes to and from India (about 17 lakh tons) grew about 15 per cent, the fastest in many years. And in this business, the share of Indian carriers grew to 20.5 per cent in 2017-18, up from 16.9 per cent in 2015-16.

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