Dr Renu singh parmar
H
ow is the Indian air cargo industry reacting and responding to the COVID-19 pandemic? The industry has risen to the occasion by proactively ensuring the movement of essential medical supplies and relief items not only within the country but to other nations as well, despite the severe constraints on belly capacity (due to grounding of passenger aircraft). However, freight rates have risen astronomically due to this shortage. Till May 28, 2020, MoCA facilitated the operation of 584 Lifeline Udan flights, transporting a total of 935 tonnes of medical/relief cargo. With the recent opening up of the economy, one can expect that the prospects of the industry will improve. Now that the ban has been lifted from the transportation of cargo via air, what can the Indian government do in terms of investments and policy implementations to facilitate a smoother flow of cargo amidst COVID-19? More slots for cargo aircrafts at airports should be identified immediately by the airport authorities. Freight rates will have to be moderated so as to not impact demand. Greater utilisation of passenger aircraft for cargo operations need to be encouraged. Relaxation of bilateral and multilateral regulations that restrict emergency supplies. Rationalising and integrating the vast number of new SOPs issued for cargo operations. How long do you think the impact of the coronavirus would last and by when Indian air cargo industry/ airlines would achieve the same capacity, load factor levels and demand as it was in 2018-2019? It’s going to take some time for manufacturing to revive, especially considering the disruption in labour/worker supply witnessed recently. At the same time, it will not be easy to switch to automated processes where a major part of the work 56 |
July 2020
After months of mandatory lockdown, now, with the opening of the economy, one can expect that the prospects of the air cargo industry will improve, says Dr Renu Singh Parmar, former Senior Economic Advisor, MoCA. In an exclusive interview with Ritika Arora Bhola, the industry expert informs more about the global economy that will take time to recover, but, air cargo might pick up around this time. time to attain the volumes witnessed in 2018-19. Apart from that, lesser passenger aircrafts will fly, consideri ng t he c r ippl i ng losses faced during the lockdown, and lower PAX demand. This will mean, lower availability of belly capacity. Like Spicejet who recently converted 3 of its Q400 Bombardier aircraft to freighters,
Overdependence on China have created havoc is done manually. Brick and mortar companies cannot follow a 'work from home' format but will have to make changes to bring in robotics and AI into their manufacturing processes. All this would take time and investment. The recent ‘stimulus’ measures announced by the government will also take time for the results to kick in. Further, the demand in the economy for goods and services has taken an unprecedented beating, as millions lost their jobs/took steep haircuts. The global economy too will take time to recover, and one can expect poor export prospects. Overall, one would not expect the economy to revive until the Q1 FY22. I would, therefore, expect air cargo to pick up around that time. However, it will take much more
other airlines may also have to consider a similar move to meet the shortfall of belly capacity.
Is it high time that India should re-evaluate its risk management policies and be future-ready of crisis like these? Absolutely! Everybody was caught offguard by the arrival of the coronavirus. Sudden supply chain disruptions sent the entire global economy into a tailspin. India like others countries have realised that an overdependence on China for critical supplies in sectors like pharma, electronics, electrical machinery, etc. has created havoc in its manufacturing sector, making it vulnerable to even shortterm supply shocks.
