FedEx, UPS and Amazon look to shore-up margins in a slower market
FedEx, UPS and Amazon are trying different ways to keep margins in their parcel business ...
E-commerce giant Amazon has set up a dedicated freighter service arrangement with Bangalore-based all-cargo airline Quikjet to scale-up its network reach and delivery speed in India.
Quikjet secured its air operator certificate (AOC) a few months ago and has a fleet of two converted 737-800Fs, according to Planespotters.
The cargo airline will provide a dedicated 737 freighter, with a payload of 23 tons, for Amazon’s India deliveries, and industry sources said it would fly under Amazon’s Prime Air brand.
Quikjet, founded in 2007 as a neutral cargo airline, is part of Irish airline and leasing group ASL Aviation and is also backed by a few strategic Indian investors, including Tata Capital.
According to Vineet Malhotra, co-founder and director at Kale Logistics Solutions, India’s dedicated freighter fleet has expanded dramatically – from just five to 28 aircraft – in about four years.
“This number is set to rise further as airlines are looking to add capacity for cargo operations. They fared better on that front than the passenger segment during the pandemic,” Mr Malhotra told The Loadstar.
“E-commerce growth has largely contributed to this trend and, according to estimates, tier-2 cities will contribute as much as 88% of new online shoppers and $150bn in cumulative incremental online sales in India over the next five years,” he added.
Kale operates air cargo community systems at Bangalore Airport, home to Quikjet’s operations.
As the emerging economy expands with its burgeoning middle-class population, India’s increasing e-commerce volumes have presented a lucrative opportunity for the airfreight industry to grow. And, as a result, the Indian air cargo market has seen a string of new freighter entrants hoping to capitalise on the momentum, including Delhi-based Pradhaan Air Express and Chennai-based Afcom Holdings.
Globally, Amazon Air has an aircraft fleet of more than 100 and, in October, said it would add ten A330-300s leased from aircraft lessor Altavair, which are expected to join by the end of this year after freighter conversion programmes.
Amazon has, of late, put a heavier focus on the Indian market where it claimed exporters had seen sales double, compared with a normal November week, during the recent online Black Friday and Cyber Monday shopping promotions.
“Customers across Amazon global marketplaces. like North America, Europe, the Middle East and Africa. bought the most from Indian exporters, with Australia, Japan and Singapore also reporting high growth for sellers,” said Amazon, adding: “The accelerated growth of Indian exporters during the annual BFCM sale events globally is a testament of the momentum we are seeing in our e-commerce exports programme.”
Exporter Kumud Goswami, VP of bedding seller Indo Count, said: “We saw our business on Amazon grow 15 times that of 2021, and ten time average daily sales. We saw great demand from customers in the US and Canada owing to enhanced discoverability and organic searches by customers.”
You can reach the writer at [email protected]