Vol. 9 No. 100                                            WE COVER THE WORLD                                         Monday August 30, 2010


Mumbai International Airport Looking For Bailout

     Mumbai International Airport in India’s financial capital is in dire need of a savior. The present airport – undergoing large-scale renovation and upgradation – has a maximum capacity of 40 million passengers, which it will attain in the next three years in 2013. With that in mind, the Civil Aviation Ministry decided to set up a Greenfield airport at Navi Mumbai (or New Mumbai), hyped as the largest planned city in the world. However, the project is still a long way off.
     Caught in the quagmire of environmental clearances (there are mangrove forests in the area that cannot be destroyed), the airport cannot be ready before 2015. Simply put, that means for two years from 2013 onwards, the present Mumbai airport will not be able to accommodate any more new flights, domestic or international. As a result, cargo would have to be diverted to airports at Pune or Bangalore.
     To top it all off, the Government of the state of Maharashtra (Mumbai is the capital of the state) has yet to make the first moves on the proposed Pune international airport (slowly transforming into another IT hub, Pune is around 100 km from Mumbai).
      However, air cargo stakeholders can take heart in the fact that Anil Ambani's Reliance Airport Developers Private Limited (RADPL) has taken a keen interest in the Baramati airport (250 km away from Mumbai) to ensure that it is upgraded to facilitate landing of international flights. Baramati, known as the political powerhouse of Maharashtra and home to the formidable strongman of Indian politics, Sharad Pawar, (below left) who is presently the Agriculture Minister in the cabinet of Prime Minister Dr. Manmohan Singh, is also well known for its exportable grapes and sugar.
     A member of the Board of Overseers at the Wharton School of the University of Pennsylvania, his alma mater, Anil Ambani (above right) is the younger brother of Mukesh Ambani, one of the richest industrialists in the world. RADPL operates airstrips at Baramati, Yavatmal, Nanded, Latur and Osmanabad, all small cities in Maharashtra.
     RADPL appointed international consultants Louis Berger Group and Knight Frank to prepare a master plan for Baramati airport and also carry out an economic and technical feasibility study. Expected to be completed this month, the study will point out the ways in which Baramati airport can be transformed into a major cargo and passenger airport.
      Baramati, incidentally, has a number of advantages: good dry weather throughout the year, large tracts of land and its proximity to Mumbai and Pune.

Long queue of trucks at the entrance of the air cargo complex at Mumbai International Airport

     At the beginning of August, an accident shut down Jawaharlal Nehru Port Trust (JNPT) at Mumbai. A container vessel, MSC Chitra, collided with a break-bulk vessel, Khalizia-III. This event should have served as a valuable lesson for the air cargo sector.
     That did not happen.
     Around 400-500 tonnes of export cargo is unloaded every day at Mumbai airport, but the trucks cannot move out due to congestion at the airport. The extraordinarily long queues of trucks outside the Air Cargo Complex are witness to the woeful conditions prevailing at one of the country’s top international airports. This, despite the fact that the Mumbai airport (or the Chhatrapati Shivaji International Airport (CSIA), as it is known) had chalked out expansion plans for cargo infrastructure in phases.
     Most cargo forwarders and stakeholders in the cargo business maintain that while the passenger section of the airport has been completely revamped, the cargo section remains virtually where it was before the airport was taken over by the private operator, GVK.
     What has upset almost all air cargo stakeholders at Mumbai is that while GVK has gone ahead and upgraded the passenger terminal, it has done “nothing” for cargo. In fact, after it was given charge of the airport, the private operator told the Air Cargo Agents Association of India (ACAAI) that there would be a state-of-the-art air cargo complex at the airport, the first phase of which would be ready by 2010, while the second and third phases would be ready in 2015 and 2020, respectively. In fact, the cargo facilities at the CSIA continue to function with almost the same infrastructure that existed back in 1977.
     Said J. Krishnan, (left) President, ACAAI, “In India, there has been no foreign direct investment (FDI) in infrastructure as regulations in infrastructure have been rather lukewarm. Our expectations have been belied and we are totally disappointed. Cargo has been conveniently sidelined. It is cargo that adds to the economy.”
     Ketan Tanna, (right) former President of ACAAI and a freight forwarder, pointed out that the “percentage share of total freight traffic at Mumbai Airport is 31.22 percent while Delhi is 25.11 percent and in Chennai it is 16.05 percent; that totals to 72 percent approximately, while the increase in cargo infrastructure is near nil.”
     Bharat Thakkar, Vice-President, ACAAI agreed. He said, “When GVK took over in 2006, following the privatization of the CSIA, the cargo trade body was informed that we would be provided with one of the world’s best airports by 2010.” He also pointed out that all the stakeholders, who are made up of exporters, importers, customs forwarders, and freight forwarders, continuously gather for trade facilitation meetings where lack of facilities is emphasized, but nothing has happened yet.
     Christoph Remund, (right) CEO, DHL and one of the members of the ACAAI managing committee, was more forthright: “The impact of the development going on at the Mumbai airport has now reached the level where it is seriously impacting the trade. Inefficiencies and delays have become common. Exporters are missing their deadlines with their customers overseas and are not able to deliver their wares on time. Sometimes, we even have to face penalties and cancellations of bookings and there is a huge constraint on our staff with the extra work and long hours.”
     The airport’s cargo facility has only 12 truck dock areas – totally insufficient in comparison to other cities. Delhi, for example, has 30 truck dock areas. Tanna pointed out that air cargo was a revenue-generating business and “today we are paying the terminal storage and processing (TSP) charges that are at par with international standards, but in exchange there are no facilities available.”
     Pointing out the lack of truck docking facilities, Bharat Thakkar also said that a truck could only deliver one load per day. “Expenses are going up and with just one trip a day, we are forced to hire more vehicles at higher costs. Freight forwarders have to bear these extra costs. Our clients are of the opinion that we are not competent enough to put pressure on the airport authorities.”
     The ACAAI members have listed out these inadequacies. Apparently, the CSIA has started designing another blueprint for the air cargo complex and have assured the air cargo stakeholders that interim facilities will be in place soon. One will have to wait and watch.
Tirthankar Ghosh

German Air Cargo Flying High

     The strong recovery of the German economy from global downturn has given the cargo biz a huge, unanticipated push. According to the National Bureau of Statistics, 1.93 million tons were flown in and out of the country during the first half of 2010. This is a growth of 27.8 percent in comparison to last year’s period.      Even in April, when ash clouds from the Icelandic volcano threw great parts of the European skies into darkness, interrupting air traffic for about a week, the volume of German air freight exports and imports was up by 18.1 percent.
     Presented below are figures from the five biggest cargo hubs for the first six months this year:
          1. Frankfurt: slightly over 1 million tons, up 32.2 percent
          2. Leipzig/Halle: 305,000 tons, up 28.7 percent
          3. Cologne: 296,000 tons, up 11 percent
          4. Frankfurt-Hahn: 203,000 tons, up 48 percent
          5. Munich: 127,000 tons, up 27 percent
     Market leader Lufthansa Cargo reports uplifts of 830,000 tons of freight and mail throughout the carrier’s entire global network during the first six months, thus posting a 20 percent leap year-on-year. The airline announced that two desert-parked MD-11 freighters will be reintegrated due to ongoing high capacity demand by shippers and forwarders. Both aircraft, along with two additional MD-11Fs, were sidelined during the crisis last year.
      With their upcoming re-deployment, the original 19 freighters that comprise Lufthansa Cargo fleet will be complete once again. The airline had to write off one of their MD-11Fs due to a recent crash in Riyadh, Saudi Arabia. The only casualty of the accident was the freighter itself.
Heiner Siegmund/Flossie Arend

Contact! Talk To Geoffrey

RE:  IATA Rope A Dopes CNS Global

Good day Geoffrey,

     I don't feel so bad now.
     If someone as influential as Dr. Otto can be disregarded then I can feel better.
     During the eighties, while representing JAL at industry gatherings, including The CAC, ( the IATA Cargo Agency Conference) and concurrently Chairman of CNS, I tried to interest the attendees in embracing
the CNS program, or at least a similar program in other countries. Obviously it didn't happen.

Buz Whalen

(Eugene T. 'Buz' Whalen is retired USA Japan Airlines Cargo top executive. He was active in forming both CNS and the revived TIACA organization).

Dear Buz,

     Thanks for writing.
     Want to take this issue from distinguished leaders, past and present, including yourself to the industry.
     Dr. Otto indicated to me that he would follow up our story with a further statement.
     So if you feel like jumping into the ring again to make the argument—maybe dust off an old speech.
Thanks also for any help, direction or suggestions.
     I guess I should have helped you with this a long time ago but we both have lived to see it come around again—so maybe with a long term editorial strategy to apply reason and discipline to the subject, your idea might see daylight.
     I'm grateful for the chance to build something.

Good wishes,


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