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

Cargo Talk - - Contents -

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


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.

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