IndiGo to follow Spicejet into the freighter space

IndiGo – India’s largest carrier by fleet and domestic market share has initiated a freighter programme. The airline is in the process of sourcing four A321ceo aircraft – each of which will be converted from passenger jets to a full freighter configuration. The airline has already issued a Letter of Intent (LoI) with a lessor for two aircraft. The A321P2F offers 24 container positions and supports a payload up to 27 tonnes. The conversion program involves ST Engineering and Airbus with their joint venture, Elbe FlugzeugWerke (EFW).

The first A321P2F entered service with Qantas for Australia Post in October 2020. The A320/A321P2F conversion programme, launched in 2015, is a joint venture between proven players in the conversion market: ST Engineering, Airbus and Elbe Flugzeugwerke (EFW). EFW has a vast experience with ~ 200 Airbus A300/A310 Medium Widebody aircraft and a growing number of A330P2Fs converted. ST Aerospace in turn has converted more than 400 aircraft. And Airbus has decades of freighter manufacturing. Within this partnership, ST Engineering is responsible for the engineering development up to the Supplemental Type Certificate (STC) issuance and the conversion kit supply. Airbus, as the OEM (Original Equipment Manufacturer) provides technical data and certification support, development of on-board computers, airframe engineering, flight physics and flight test expertise. EFW is the STC holder and leads the overall programme and commercialisation. Over 1700 A321ceos have been delivered till date, which means there will be a steady stream of aircraft available for the conversion.
IndiGo is expected to take the delivery of its first freighter in the first half of 2022, which will be used for both domestic and regional missions. The remaining three aircraft in the initial commitment are expected to arrive within a year or so from arrival of our first freighter, and further aircraft may be sourced depending on market development, said the company’s press release. IndiGo has a fleet of over 250 aircraft and has 398 A321neo on order of which 40 are delivered.

The A320 family cockpit and engineering familiarity means that the same set of pilots and engineering staff would be flying and maintaining the fleet of freighters.

Competition and numbers

For years, Blue Dart was the only carrier in India to have dedicated freighter aircraft. Competition in the form of Aryan Cargo or Deccan 360 amongst others failed to capitalise on the market. Scheduled airlines were happy to offer the belly space for cargo. In 20 Spicejet became the first scheduled carrier to induct a dedicated freighter aircraft and formed a subsidiary – SpiceXpress. The SpiceXpress brand operates

As the pandemic set in and airlines started operations with cargo on seat, Spicejet converted three of its Q400s for dedicated cargo operations. As of today, SpiceXpress operates 14 aircraft and has five more wet leased, which includes the A340!

Scheduled carriers in India carried 474,871.9 tonnes of cargo in 2020, much lower than the 745,793.3 tonnes which were carried in 2019! While 2020 was a year full of aberration, in 2019 IndiGo had a share of 33.28% in domestic cargo market while Blue Dart and Spicejet had a share of 17% each. Spicejet has taken the game to a different level by deploying wide body aircraft for international charter flights due to paucity of capacity.

Network Thoughts

Blue Dart has been a slow and steady operator in Indian skies and more importantly profitable. However, I feel that Blue Dart has been conservative and has let some opportunities pass. IndiGo was very aggressive with International expansion for the six months before the world headed into a lockdown. This involved opening up new stations in China, Vietnam, Myanmar – some of which have substantial cargo uplift. A dedicated fleet will also give it ability to go beyond the cumbersome bilateral arrangements since cargo is open skies in most cases.

Hopefully this does not lead to a competition with Blue Dart and Spicejet but leads to increase in market for all the Indian carriers.

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