Making a cargo hub: Through strong connectivity by Indian carriers

Strong connectivity of Indian carriers from Indian airports is the prerequisite for establishing an aviation or cargo hub in the country, feels RG Panicker, CEO, CSC India, while speaking at the 40th Annual Convention of ACAAI in Jaipur. He also emphasise

The fundamentals behind the ‘hub & spoke’ model are that one carrier has to fly to many destinations using one central point, without just flying point-to-point. According to Panicker, in a system with 10 destinations; the hub-spoke system requires only 9 routes to connect all destinations, while a true point-to-point system would require 45 routes. However, there is poor connectivity to these markets by Indian carriers, though some efforts are being made by low-cost carriers.

India has an ideal geographical location in the trade-lanes from East-to-West and West-to-East. India is surrounded by production centres on the one hand ( like Bangladesh, Pakistan, Nepal, Sri Lanka,Vietnam, Indonesia, Thailand) and exciting countries on other hand (CIS, Egypt, Turkey). Hence, there is a huge scope for transshipment cargo. Unfortunately, the country has almost zero transshipment cargo out of 2.64 million MT of cargo processed annually. No international cargo company or integrators have made India their hub. Citing the facts he pointed out that top 10 hubs account for more than 50 per cent of global freight volume. “A proactive international aviation policy through multilateral co-operation among neighbouring nations has to be taken to integrate air-transport market. In addition, an aggressive marketing strategy has to be adopted to attract investment for development of hubs,” he said.

Panicker maintained that the development of hub airports is evolution, and not just a starting point. It depends on economic vision for the region, infrastructure development, regulatory policy, civil aviation policy and airport vision. “Vision drives the development,” he emphasised. The government policy for economic growth has to be in sync with the ease of doing business and single-window clearance system, with industry-friendly business laws and taxation policy. Also, a 6-8 per cent growth scenario is not sufficient to make a hub successful. Panicker underlined the utmost importance on beyond airport connectivity. Infrastructure outside the airport connecting hinterland to the airport would be one of the key drivers. Our highways should be 16 lanes instead of present ones.

In his opinion, there is a need for a long-term vision by airport—how they look at the development of an airport from the

A proactive int’l aviation policy through multilateral

co-operation among neighbouring nations has to be taken to integrate air

transport market.”

RG Panicker

CEO, CSC

economic perspective of the country. “Are they internally focused on their profitability or do they have a vision for the community, the region or the country? How do they look at cargo development? There should be long term vision for cargo- not adhocism. There should be flexibility and transparency in their policy for the airport,” Panicker maintained. He also added that affordable logistics and business centres need to be created.