How Indian airports prepare for a 10-million-tonne air cargo future

India's air cargo industry aims to skyrocket from 3.5 million in 2018 to 10 million metric tonnes by 2030. Can it navigate industry demands, infrastructure hurdles and more to hit this ambitious target?

Indian skies are witnessing a transformative surge in air cargo, reflecting a pivotal shift in the nation's aviation landscape. Fiscal year 2023 saw a remarkable rise in domestic cargo transportation by scheduled airlines, totaling nearly 698 thousand metric tonnes. This growth encompasses both belly cargo from passenger aircraft and dedicated freight carried by specialised cargo planes. Presently, India's airports boast a cumulative air cargo handling capacity of approximately 6.5 million tonnes. To harness the potential of this burgeoning sector and accommodate a surge to 10 million tonnes by 2030, the Ministry of Civil Aviation, alongside the Airports Authority of India (AAI), is spearheading initiatives to bolster infrastructure. These initiatives encompass the establishment of new cargo terminals, including integrated, multimodal, and dedicated facilities. Moreover, plans are underway for the expansion and modernisation of existing terminals, along with the strategic development of cargo transshipment hubs.

Boeing forecasts India's air cargo growth to average 6.3% annually, fueled by manufacturing and e-commerce. They anticipate a demand for over 80 freighters in the next 20 years. Airbus is likewise investing in India's future, partnering with Hindustan Aeronautics (HAL) to support aircraft maintenance, repair, and overhaul (MRO) services for the country's burgeoning commercial fleet. With proactive government initiatives, industry investments, and a booming domestic economy, India's air cargo sector is poised for significant expansion, promising benefits not only to the aviation industry but also to the nation's overall economic development.

To accommodate the projected surge in cargo volume, the Indian government is actively expanding airport infrastructure. Projects such as the Noida International Airport and the Navi Mumbai International Airport are set to revolutionise cargo handling capabilities. Furthermore, upcoming regional airports in Sindhudurg and Kushinagar aim to address specific needs, thereby enhancing India's air cargo capacity and efficiency.

Challenges and outlook
Despite this promising trajectory, there have been challenges. Joint venture airports experienced a 2.1% decline in cargo traffic during the April-September period of 2023-24 compared to the previous year. Nonetheless, the overall outlook remains optimistic. A Research and Markets report forecast the Indian air cargo market to reach a value of US$17.22 billion by 2028, with a healthy 5.65% annual growth rate.

Numerous factors are driving this air cargo boom. The flourishing Indian e-commerce market, projected to reach $350 billion by 2030, fuels demand for swift and efficient delivery methods, making air cargo vital for time-sensitive and high-value products. India's stature as a leading pharmaceutical and vaccine manufacturer necessitates efficient air cargo services for global distribution, given the industry's value of $50 billion, expected to soar to $130 billion by 2030. Additionally, the agricultural sector is increasingly leveraging air cargo to transport perishable goods like fruits, vegetables, and flowers to international markets, ensuring freshness and maximising value. The success of the "Make in India" initiative hinges on air cargo to facilitate the smooth movement of manufactured goods in global trade.

"To achieve this target, several factors need to be considered, such as infrastructure development, streamlining regulatory procedures, simplifying customs clearance processes, and enhancing air connectivity within the country and with major global hubs. It's equally important to develop a skilled workforce capable of managing modern technologies and advanced cargo-handling techniques. Collaborative public-private partnerships can help mobilise investments, share expertise, and leverage synergies to achieve the desired targets in the cargo industry"

Kiran Jain, Chief Operating Officer, Noida International Airport (NIA)

NIA exemplifies this approach, with its Phase 1 designed to handle 250,000 tonnes of cargo annually, with a long-term vision of reaching 1.9 million tonnes. “We are confident that our location offers a significant advantage, and we expect to see a rise in freighter traffic as cargo tonnage grows,” she added.

"India's air cargo transshipment rate remains below 10%, representing a significant area of untapped potential, which is particularly concerning given India's growing economy. Streamlining various transport modes and improving last-mile connectivity are crucial to overcome this challenge and enhance overall connectivity"

Satyaki Raghunath, Chief Operating Officer, Bangalore International Airport

Bridging the gap to 10 million tonnes of cargo handling by 2030 requires a multi-pronged approach. While airports must expand infrastructure, adopt technology, and streamline operations, airlines will also play a crucial role by increasing freighter fleets or utilising passenger belly space more effectively. New domestic and international cargo routes will be essential to connect India to trade hubs and cater to booming industries.

However, a smooth takeoff requires addressing challenges. Many existing airports, like Delhi, Mumbai, and Bengaluru, face capacity limitations in cargo handling infrastructure and runway space, necessitating strategic planning and expansion initiatives.

"This is a crucial moment for us. With three or four Indian carriers having over 1,000 aircraft on order, we have an unprecedented opportunity in decades. We can now dream big and envision catering to this expanding market. The key ingredients are all in place: robust physical infrastructure, a government with clear vision and ambition, and a strong industry presence with multiple players like Akasa Air, IndiGo, and Air India who have made significant investments in aircraft capacity," emphasised Raghunath.

"The air freight industry is crucial for India's rapid growth, and I see a positive future for it. However, there's a challenge with unbalanced trade flows. There are many imports coming into India from the East and West, but not as many exports going back in those directions. This creates a situation where many freighters only use India as a stopover, leading to partially filled aircraft. We need to find ways to improve this imbalance"

Mark Sutch, Chief Commercial Officer for cargo, IndiGo

The UDAN (Ude Desh Ka Aam Nagrik) scheme focuses on developing regional connectivity by connecting smaller airports, enhancing air cargo movement across the country. The Airports Authority of India (AAI) and industry bodies are launching skill development programmes to create a pool of trained professionals for the air cargo sector.

Fortunately, Indian airports are taking proactive steps. Several airports, including those in Delhi, Mumbai, Bengaluru, and Hyderabad, among others, are undertaking significant expansion projects to build dedicated cargo terminals, expand existing facilities, and improve runway capacity. Additionally, embracing automation, digitalisation, and real-time cargo tracking solutions can enhance visibility and optimise cargo handling processes.

For instance, Delhi International Airport (IGIA) has already crossed a significant milestone, surpassing a cargo volume of 900,000 tonnes as of February 2024. They project to handle an additional 85,000 tonnes by March 2024, solidifying their position as a major player. To further streamline cargo handling, IGIA has invested in state-of-the-art technology, including 28 dual-view X-ray machines for international general cargo. With a base cargo handling capacity of 1.8 million tonnes, expandable to over 2.5 million tonnes, IGIA is well-equipped to handle the growing air cargo traffic.

Likewise, Bangalore International Airport (BIAL) is collaborating with partners to expand cargo capacity at their existing terminals from 420,000 tonnes to roughly 500,000 tonnes in the first phase. Additionally, a new domestic cargo terminal with a capacity of around 300,000 tonnes is being built. Recognising the growing demand for perishables, they are also increasing their cold chain facility capacity from 40,000 tonnes to 80,000 tonnes. Furthermore, a logistics park with Air India SATS is under development, adding another 370,000 square feet of floor space. Combining these initiatives, BIAL aims to achieve a total cargo handling capacity of approximately 1.1 million tonnes.

This approach is echoed by other major airports. Mumbai's Chhatrapati Shivaji Maharaj International Airport (CSMIA) has carved a niche in perishables with its advanced cold chain facilities, boasting a dedicated cargo terminal with a capacity of 300,000 tonnes. Similarly, Noida International Airport (NIA) plans to implement "Smart & Connected" cargo facilities with Air India SATS. These facilities leverage IoT, AI, and ML for features like lidar-based cargo measurement and vision system tracking.

On the other hand, Tata Group’s Air India aims for a 300% increase in cargo capacity within five years by leveraging massive aircraft orders from Airbus and Boeing. This expansion, utilising wide-body passenger aircraft with belly cargo space, will reach a capacity of 2 million tonnes annually. “Combined with investments in technology and infrastructure, Air India is positioning itself as a major force in global air cargo, offering non-stop connections to key export markets,” added Ramesh Mamidala, Head of Cargo at Air India.

India's booming air cargo industry hinges on collaboration. Airports must invest in infrastructure, technology, and training. Airlines need to diversify services with freighters and specialised solutions. Government support for streamlined regulations, infrastructure, and regional connectivity is crucial. Logistics providers require efficient infrastructure and skilled workers. By working together and addressing challenges, India's air cargo sector can soar, boosting trade, creating jobs, and driving economic growth.