SpiceJet Launches Dedicated Air Cargo Services SpiceXpress
To operate on domestic and international routes; Inducts its first Freighter Aircraft
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Low-cost carrier SpiceJet, has announced the launch of its dedicated air cargo services and inducted its first freighter aircraft at the Indira Gandhi International airport in Delhi on Monday (September 10). SpiceJet would operate the cargo services under the brand name SpiceXpress and has laid down a detailed plan covering both domestic and international routes. Much like SpiceJet’s commercial passenger aircraft fleet, the airline’s freighters fleet will consist of Boeing 737 planes and will be operated on an incremental direct operating cost model and extending its operations through its common pool of resources like pilots, engineers, ground staff, airport infrastructure.
The first freighter aircraft to be inducted by SpiceJet is a Boeing 737-700. SpiceJet plans to have an air cargo fleet with the first four freighters scheduled to be inducted in FY 2019. This unit will be operated as a separate business unit under SpiceJet Limited.
“I am delighted to announce the launch of our dedicated air cargo operations and induction of our first freighter aircraft. With our proven operational capability, this is an extension of our ‘belly cargo’ service to a ‘dedicated freighter’ with Boeing 737 aircraft. We are very excited about the tremendous potential the logistics industry offers. There is a huge untapped market for air cargo services in India and a player like SpiceJet - with its low cost structure - is best suited to address this need,” said Ajay Singh – Chairman and Managing Director, SpiceJet. “The freighter aircraft will be acquired on pure operating leases and haven’t incurred any major CAPEX, while the ground operations will be either self-handled by the existing Spicejet ground infrastructure or shall be outsourced till we develop a certain scale of operations” he added.
With the induction of freighters, the airline is all set to strengthen its footprint whilst offering safe, on-time, efficient and seamless air cargo connectivity across India, Asia and Europe. SpiceJet will offer direct freighter operations powered by its fully integrated transportation network including air cargo, ground transportation and warehousing facilities across the country.
The current cargo capacity of SpiceJet’s existing fleet is about 500 tonnes per day and with the launch of the dedicated freighter service this capacity would go up to 900 tonnes a day in a phased manner with the addition of four freighters by March 2019.
SpiceJet currently offers cargo capacity on its passenger aircraft fleet of 36 Boeing and 22 Q400s operating across 47 domestic and 7 international destinations. The added capacities through the acquisition of the freighters will enhance the airline’s existing cargo competence to 60 domestic destinations by the end of this year. SpiceJet aims to further ramp up this competence servicing up to 150 destinations across India, Asia and Europe by 2022.
The service will address time and temperature sensitive shipments across verticals, like letters and credit cards under banking, blood, organs, and medicines under pharma. Other shipments would include automobiles, apparels, consumer electronics, e-commerce and live animals. Besides, the airline will also ship perishables like farm fresh fruits and vegetables to the Middle East. Among its key features, SpiceXpress will offer Priority Based Delivery (PBD), Hour Based Delivery (HBD), Priority Cargo and Personalised Services (PSS) among others.
The Air cargo traffic in India is expected to grow by 60% in the next five years. The Indian logistics industry which provides employment to more than 22 million people has grown at a compound annual growth rate (CAGR) of 7.8% during the last five years and is expected to touch a worth of $215 billion in the next two years. Eyeing the huge growth potential in both domestic and global markets, fuelled by the ever increasing e-commerce boom, SpiceJet aims to shore up SpiceXpress’s existing capacity, transforming it into a full scale freighter cargo service.