Date:12/08/2005 URL: http://www.thehindubusinessline.com/2005/08/12/stories/2005081200790700.htm

Back AI may ink pact with Falcon for ferrying cargo

Ashwini Phadnis

New Delhi , Aug. 11

AIR India plans to sign a formal agreement with the West Asia-headquartered Falcon Group for sourcing 75 tonnes of cargo a week on the Kerala-Dubai and 100 tonnes of cargo a week on the India-Germany sector by the middle of this month, senior airline officials said on Thursday.

"We hope to sign a formal agreement by the middle of this month and commence operations by the middle of September. The move should help ease the problem of cargo capacity on the Kerala-Gulf and India-Germany sectors that has arisen in the recent past," an AI official said.

The Falcon Group is expected to either use a DC-10 or an Airbus A-300 aircraft for shipment of cargo. The present leasing of cargo capacity would serve as a stopgap arrangement so that the markets are not lost to competitors, officials said. At present, revenue from cargo operations accounts for Rs 550 crore or 8 per cent of the airline's operating revenue.

The formal signing would ease the cargo problems faced by the airline on the two sectors. While the decision to operate the Boeing 737-800 aircraft instead of the Airbus A-310 meant that the belly capacity for cargo went down on the Kerala-Dubai sector, the eventual withdrawal of Boeing 747- combi aircraft meant that the same problem was witnessed on the India-Germany route. Air India has also put in place a cargo business plan, which seeks a progressive expansion of the cargo capacity on various routes in its network.

The airline is also to convert two Airbus A-310 aircraft into freighter aircraft. The airline hopes to have the aircraft ready for cargo operations by the middle of 2007.