Freight service turns major revenue for airlines

By Shoukath   |   Saturday, 16 August 2008, 17:22 IST
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Bangalore: As cargo services generate major share of revenue for airline operators, most of the airline operators are now concentrating on initiating more advanced freight strategies. "Globally, most of the airline operators are currently acquiring about 50 percent of their revenues from their freight services," said V.K Mathew, Chairman and CEO, IBS group, one of the major air transportation solution providers. Specifically, in India according to a recent study by Ernst and Young, one of the major auditing firms in the world, the Indian air freight market has been experiencing a strong growth over the past five years. Domestic and international air cargo traffic has grown at a CAGR of 12.6 percent and 13 percent, respectively, during FY2002-07. It estimates that the air cargo traffic is expected to exhibit a CAGR of 13 percent and 14 percent, respectively, for FY2007-10. Though the revenue from passenger is dipping, revenue out of goods carrying is still going upwards. Many airlines have already adopted new generation cargo management system to successfully monitor the freight revenue. Moreover, the Government of India had decided to increase the Foreign Direct Investment (FDI) cap in the Indian airline freight market from 49 percent to 74 percent. With this effort, India is eying on becoming one of the major freight hubs in the world. Many domestic and global aviation companies have already showed interest to start and expand their freight service in India. The list includes the Indian companies such as Kingfisher, Jet and Indian and the foreign companies like FedEx, Malaysia Airlines and Australia based HeavyLift Cargo Airlines. Realizing the growing demand for efficient air cargo management system, IBS Group, a solution provider of air transportation, has launched iCargonet, a software as a Service (SaaS) model of IBS' new generation cargo management system, iCargoGold. IBS provides the new system to King Fisher Airlines, India�s one of the major regional airline operator. iCargonet can provide solution right from planning, sales, operation, ground handling, Unit Load Device (ULD) management to cargo revenue accounting and revenue optimization functions in an integrated and cost-effective manner. Through monitoring and support services provided by iCargonet, problems faced by customers can be identified and resolved more quickly. It also gives fast and secure data backup and restoration protocols and enables easy migration to newest hardware.