India’s air cargo market has received some much-needed uplift following the introduction of the country’s first freighter fleet operated by a scheduled domestic airline.

In September, low-cost carrier SpiceJet launched dedicated cargo business SpiceXpress with its first Boeing 737-700 freighter. Three additional 737s are due in 2019, which the carrier said would boost its total cargo capacity to 900 tonnes per day.

Ajay Singh, SpiceJet’s chairman and managing director, said, “There is a huge untapped market for air cargo services in India.”

SpiceXpress is operating domestic and international routes covering Delhi, Bengaluru, Guwahati, Hong Kong, Kabul and Amritsar. Its weekly freighter flight between Guwahati and Hong Kong is the first to connect India’s North East with Asia. Launched in January, SpiceXpress said the flight caters to fresh fruits and vegetables, exotic tea, and kiwi wines.

“The dedicated cargo flights to Hong Kong will help bring in huge opportunities for the North East region and allow them to expand their market outreach to the international markets. This, in turn, will also elevate the entire economy of the region,” Singh added.

The launch of SpiceXpress come as welcome news to many of India’s freight forwarders, who have long called for extra freighter capacity in the domestic market.

“Any increase in cargo capacity, particularly increase in freighter aircraft capacity, is a welcome development in India, as it will be a boost to the Indian airfreight sector,” said T.A. Varghese, president of The Air Cargo Agents Association of India.

Spiceject is one of only two all-cargo carriers operating within India.

Indeed, unsuccessful attempts to enter the market were made by both Jet Airways and QuikJet Cargo in recent years. Both carriers apparently failed to drum up enough business despite the lack of freighter capacity on offer – demand wasn’t as high as expected, with shippers preferring the cheaper trucking options available.

However, with e-commerce booming in India and the subsequent demand from shippers for shorter transit times, it appears freighters are back on the agenda. India’s flag carrier Air India, for example, is also mooted to be once again ready to invest in a domestic freighter network.

SpiceJet said it expects air cargo traffic in India to grow by 60% in the next five years, citing the “ever-increasing” e-commerce boom as cause to scale-up cargo operations to 60 domestic destinations by the end of the year.

According to analyst WorldACD, India’s air cargo market is now the sixth largest in the world; while the latest stats from IATA pegs year-on-year growth at 17%, with volumes reaching one million tonnes for the first time in 2017.

Varghese said the Ministry of Civil Aviation is currently in the process of finalising a new National Air Cargo Policy. The policy includes the master planning of new airports, as well as developing old airports into cargo hubs.

“A number of airports in metros and smaller cities in India are likely to see substantially enhanced capacity, infrastructure and facilities for air cargo,” he explained.

“Passenger airlines may not find it commercially viable to operate to such airports – and at present, the freighter capacity in India is quite inadequate to meet the demands of the EXIM (Export and Import) trade.

“Therefore, India will require many more airlines to commence dedicated freighter operations to and from such airports to ensure the speedy movement of goods directly from points which are located in close proximity to the manufacturing hubs. Such a development will definitely lower the cost of logistics in India.”