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Another day in freight, another blurring of the businesses: this time, a forwarder is planning to launch an airline, and aims to build a fleet of up to 30 aircraft within 10 years.
A formidable Indian player in the freight forwarding world, Jet Freight Logistics (JFL) is inching closer to its growth aspiration of starting an airline.Founded in 1986 as a niche air cargo company, Mumbai-based JFL has diversified into ocean freight at scale in recent years, and now has a presence in 12 Indian cities and major global locations, including in the Middle East, UK and he Netherlands, with the US soon to be added to its office network. Chairman and MD Richard Theknath told The Loadstar talks with investors to form a partnership arrangement for the airline venture are “at an advanced stage”, and if that comes to fruition, JFL would seek an air operator permit. The move follows a ‘preliminary government nod’ (no objection) secured late last year. Mr Theknath said: “We have decided to pursue an airline project, realising the need to guarantee sufficient and reliable capacity for our business amid the uncertainties created by Covid disruption, which has seen airlines to/from India shut down scheduled passenger services and bellyhold capacity disappear/
“JFL is hoping to launch its airline around mid-2022,” adding that JFL was setting its sights on international widebody services with A330-300s.“Those are the only viable options available now, and we are working towards finalising lease terms with a lessor,” he said. “Though in the early stages of planning, we intend to build a fleet of 25 to 30 aircraft in 10 years.” To support international operations out of India, JFL initially plans to make Mumbai and Delhi airports its hubs, extending its reach to other busy southern airports, such as Bengaluru and Chennai, later. Mr Theknath explained that, to begin with, JFL would want to connect mainly to Europe (London/Frankfurt) and the US (New York JFK/Washington Dulles/San Francisco), but a Mumbai-London-New York JFK connection could become the focus.
JFL is also looking to target India-Middle East markets with narrowbody freighters via strategic partnerships, which it believes would also bring opportunities for synergies and greater network efficiency. Mr Theknath also hinted at plans to operate narrowbody connections to Africa.
But all his “sky high” business strategies seem to centre around long-term aircraft lease arrangements – rather than ownership – being a safer bet amid unpredictable Covid events and demand swings.On a more optimistic note, Mr Theknath also said JFL remained open to partnering with global express giants like DHL, FedEx or UPS.
“On the whole, this airline venture could involve more than half of JFL’s existing business volumes, in the long-run.”
JFL is said to be the top freight loader for Air India and Emirates from India – averaging 100-120 tons daily at present, versus some 200 tons before the pandemic. And, according to Mr Theknath, the upswing in Indian exports combined with the government’s pro-investment efforts and policies should augur well for the air cargo industry.
And this may not be the only new airline capacity in India. Jet Airways, which ceased operations in April 2019 and was declared bankrupt, could relaunch as a domestic airline this year with new backers.