IndiGo is India’s largest passenger airline with a market share of 43.4 percent as of February, 2019. Since its inception in August 2006, it has grown from a carrier with one plane to a fleet of 216 aircraft today. It currently operates flights to 68 destinations – 52 domestic and 16 international. The carrier has been making significant turnaround in performance in the recent past on account of it benefitting hugely from the domestic market ant its international operations are getting favourable tailwinds. The cargo side of IndiGo has also been growing at a steady pace, though not as good as the passenger side, the carrier is focusing on optimising its substantial belly capacity to increase revenue from cargo. William Boulter, chief commercial officer, IndiGo, spoke to Reji John on the sidelines of IATA World Cargo Symposium in Singapore, recently about how IndiGo is building its cargo strategies and how important is cargo to the overall business of IndiGo. Edited excerpts from the interview.
What is the potential in India for air cargo and how important is cargo for Indigo in its overall business?
IndiGo is a large airline. We now got over 200 aircraft. We are growing at 30 percent a year. In fact, in the last two years we have grown 70 percent in terms of our capacity. So, cargo obviously is becoming more and more an important part of our business; even though we are only a narrow-body fleet – a mixture of A320s and ATRs. We have taken delivery of our first A321 and we have 125 of them on order. But even with the A320 fleet we are able to carry substantial payloads for cargo and we are currently carrying about 240,000 tonnes a year. Mainly domestic, but increasingly international. It’s about 80:20 ratio at the moment; but we see the international portion will increase. We just started flights to Hong Kong, which is a key cargo market. We fly many times a day to Dubai from different points in India and again from ex Dubai and Doha there is good cargo demand. Then there are other places like Kathmandu and Dhakka, which are very strong cargo markets. So gradually our focus is really on developing the international side of our business; but of course, India domestically will continue to remain a key part of our business for many years to come. Specifically, for cargo, at the moment we earn less than 10 percent revenue from cargo which is fairly typical of a narrow body airline. But we are focused on growing that. Recently we changed our cargo management and we are very confident that we have the right team in place and working with our partners in the industry and we are making very good progress.
Do you have any specific revenue target for the cargo division?
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May - June 2019