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   Vol. 23 No. 15
Thursday April 4, 2024

IAG Cargo India Growth

Camilo Garcia Cervera

     The cargo division of European major International Airlines Group (IAG), expressed its plan to partner with Indian carriers and logistics players – with the condition that it would be done at the right time. IAG which represents the cargo business of five airlines -- British Airways, Iberia Cargo, Vueling and LEVEL (Spanish carriers) and Ireland’s Aer Lingus Cargo—gets 10 per cent of its global export revenues from India.
      AG Cargo’s Chief Executive Officer David Shepherd was in India. Speaking to a news agency he had said that IAG got some of the highest loads from the Indian market. He had also said that the IAG Group would be looking at partnerships with Indian carriers and logistics players, “if an opportunity comes up . . . ”
     IAG Cargo was also planning to add more cargo capacity. Shepherd also pointed out that there could be more flights between UK and India once the new air services agreement that was being negotiated between India and the UK was signed. Today, it has 112 weekly flights between India and the UK.
     FlyingTypers talked to Camilo Garcia Cervera, IAG Cargo’s Chief Sales and Marketing Officer to find out more about the India plans. Excerpts from the interview:

FT:       You announced IAG Cargo’s desire for partnerships with Indian carriers. What are you looking for from Indian airlines that will boost this partnership?
CGC:   In recent years, we have seen significant growth in the number of items that India exports to the world, in particular electronics fuelled by a strong domestic manufacturing landscape. There has been also been an increase in the development and production of vital medicines. As a result, the need for air freight services to deliver has increased significantly.
     Logistics will play a pivotal role in enhancing India’s competitiveness in manufacturing and exports and at IAG Cargo we are equipped to support with this growth. With 56 flights a week from India across five routes, between January and September 2023 we saw a 31% increase in tonnage compared with the same period last year, most notably in our Constant Climate, Fresh and Courier services.
     As we look to the future, we are always keen to explore new partnerships to further support our customers adapt to changing market demands. This involves enhancing our global network with added connectivity – adjusting routes as needed to ensure we offer flexible cargo solutions.

FT:       That brings me to the Indian market. What is your reading of the Indian market in terms of air cargo exports/imports?
CGC:    As the world adapts to the new normal post the pandemic, India has emerged as a global powerhouse for the production and exportation of key goods. From pharmaceuticals to high-tech e-commerce such as mobile phones, fresh produce and a growing textile sector, these industries are flourishing across India. As these industries grow, not only does the number of exports grow but so does the level of imports as specific materials and tools are required.

FT:       IAG Cargo operates 56 flights to Indian destinations each week and we understand that you would like to inject more capacity?
CGC:   IAG Cargo’s current schedule between London and India is larger than pre-pandemic. The schedule is up 8% on weekly flights (2019;52 weekly flights VS 2023;56 weekly flights) between India and the UK compared to 2019. Our network is significant for shippers, connecting India not only with the UK but also 31 cities in the US and our extensive network in Canada and Latin America.
     With the current fleet of Boeing 777’s and 787’S carrying 16-25 tonnes of cargo from India, and the last month we increased our capacity going into – and out of – Delhi through up gauging services from the current 787s with A350s. India has always been an important part of our network and will continue to be. It is important that as demand develops, so do air cargo services.

FT:       Air cargo is going through tumultuous times. It has to contend with wars, recession, rising interest rates and fuel prices. How do you view these challenges?
CGC:   The operating environment has changed significantly in recent months, and in turn, the industry is experiencing a fluctuation in air cargo rates. Our strategy has undoubtedly been put to the test during the last year, but a combination of increased premium handling capacity through the opening our new facility at London-Heathrow, improved productivity in our operations and a strong transformation programme we are well placed to adapt.

FT:       For our Indian and international readers, can you give us your views on how air cargo will shape up in 2024? What will be the main areas of concern and how do you think these should be tackled?
CGC:    From macro-economic trends to digitalisation and sustainability initiatives, the cargo industry has a lot of consider right now.
     Digitalisation remains a priority to streamline operations and move away from an unsustainable reliance on paper – for example, through the adoption of electronic air waybills (eAWB). We’re also utilising various digital technologies and tools to streamline our operations. This is no more evident than in our new cargo handling facility at London Heathrow, New Premia, that we opened earlier in the year. With bespoke IT system upgrades and integrations that optimise how freight is moved and allocated within the facility, this state-of-the-art technology makes us smarter and faster, so we can provide the best customer service.
We will continue to improve our digital platforms, continuing enhancements to our online booking capabilities. In India, we are witnessing growing customer adoption of digital booking services – which further emphasises the importance of our technological investments.
     Sustainability is also of paramount importance to our industry, where at IAG Cargo we hired our first Sustainability Manager to enhance the business’ current ‘Fit for Future’ strategy and further infuse sustainability into its core whilst encouraging partners and customers to join the business on this journey.
Tirthankar Ghosh

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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