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Air Express Services: A Growing Role in Air Cargo

Air Express Services: A Growing Role in Air Cargo. Tulsi Nowlakha Mirchandaney . Evolution of Air Cargo. 1911 AIRMAIL. 1940 AIR CARGO. 1969 AIR EXPRESS. Air Express: Rapid Expansion. *International 1991: 3.5% Market Share (International Air Cargo) 2005: 11.0% Market Share

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Air Express Services: A Growing Role in Air Cargo

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  1. Air Express Services: A Growing Role in Air Cargo Tulsi Nowlakha Mirchandaney

  2. Evolution of Air Cargo 1911 AIRMAIL 1940 AIR CARGO 1969 AIR EXPRESS

  3. Air Express: Rapid Expansion • *International • 1991: 3.5% Market Share (International Air Cargo) • 2005: 11.0% Market Share • Growths: 17% (Average Annual – since 1997) • *USA • 1975: 3.2% Market Share (Domestic Air Cargo) • 2005: 60.9% Market Share • **India • Size of Industry: 4,175 cr • Average Annual Growths: 17.2% (Estimated) 81.4% of the world’s freighters are used by Air Express Operators • * Source: Boeing: World Air Cargo Forecast 2007 • ** Internal Estimates

  4. International Express: Rapid Growths Source: WACF 2007

  5. USA: Express Market Leadership Source: WACF 2007

  6. Intra-Europe: Express Growths Overtake Air Cargo Source: WACF 2007

  7. Intra-Europe: Express Growths Overtake Air Cargo Source: WACF 2007

  8. Intra-Europe: Express Growths Overtake Air Cargo Source: WACF 2007

  9. Air Express: End to End Solutions Consignor ORIGIN CUSTOMER – TRANSPORT INTERFACE Forwarder TRANSPORT MODEL(S) Airline INTEGRATORS TRANSPORT – CONSIGNEE INTERFACE Agent Consignee DESTINATION Time--Definite Time-Control IntegratedService Providers

  10. Air Express: Critical Supply Chain Support TRADE FACILITATOR *5% of India’s GDP (by value) carried by Air Express * Internal Research • Time-Definite, Door-to-Door Distribution • Emphasis on Speed, Reliability, Security, Real-Time Data Flow • Overnight Deliveries • Business Driven • Specially Relevant to: • Time-Sensitive/Emergency Material • High Value Goods • High-Security/Confidential Items • Vital Role in Business Logistics Systems • Just In Time • Supply Chain Management

  11. GDP Impacts on Air Cargo Growths Source: WACF 2007

  12. India: GDP Impacts on Air Cargo & Air Express Growths Source: CMIE Report December 2007& Internal Sources

  13. Domestic Air Express: Economic Growth Co-relation Blue Dart % change in y-o-y growth Services Manufacturing Source: CMIE and Blue Dart Financials

  14. Air Cargo: The Indian Scenario • Primarily Focused on Passenger Air Services & Infrastructure • Air Cargo considered a By-Product of Passenger Air Services • Air Cargo in India is not fully aligned to business needs.

  15. The India Challenge: Mammoth, Diverse, Poorly Connected Source: CIA World Fact Book, 2007 * Area of land only (area of territorial water excluded) ** English and Spanish contribute ~ 93%, remaining are mixed dialects

  16. Air Express: The Business Imperative DEL AMD CCU BOM HYD MAA BLR Infrastructure • 6 Freighters (3 B757s and 3 B737s) • Integrated Road Network • Advanced Technology Network • 62 Route Connections • 300 tonnes each night • 7 Aviation Hubs • 9 Domestic Hubs • 21 Ground Regional Hubs • 4,021 Vehicles Source: CMIE and Blue Dart Financials

  17. Air Express: The Business Imperative Quality • Net service reliability levels of 99.96% • Despatch Reliability 99.25% • ISO 9001-2000 Certified standards for the entire Operations, Products and Services. People • Committed, Professional, Trained Volumes JAN-DEC 2007 SHIPMENTS (In mns) Domestic 72.40 TONNAGE: Express and airfreight loads - 191,875 tonnes (> the total exports out of Chennai & Bangalore) Source: CMIE and Blue Dart Financials

  18. India: Positive Future Outlook Logistics Spend: India: 13% of GDP compared to USA: 8.7% • Domestic Consumption • Large Population • Increased purchasing power • Changing lifestyles Source: CMIE and Blue Dart Financials

  19. India: Positive Future Outlook • Outsourcing hub • 80% of goods will be manufactured in countries other than where they would be purchased. Source: CMIE and Blue Dart Financials

  20. India Opportunity: FTA with SAARC • Key Role in South Asia Trade • 3.9% of World Air Cargo • 4.2% of World Tonne/Kms • Over 1.4 mn tonnes into/out of the region Source: CMIE and Blue Dart Financials

  21. USA: Trucking Network Complements Air Services

  22. USA & Europe: Trucking Network Complements Air Services India’s Golden Quadrilateral is an opportunity

  23. Regional Hub: Some Asian Success Stories DUBAI CARGO VILLAGE • Dubai Airport Free Zone • Capacity • 800,000 tonnes (annual) • 7,420 tonnes (storage) • Truck Docks: 56 (with 7 solely for sea-air) • Ship to Plane: 4 hours • Individual Express Facility for FedEx & DHL • Commenced Operations in July 1991 • Annual Airfreight Movement (tonnes): 751,575* • Ranked 17th largest Cargo Airport in the World** * Dubai Cargo Village: 2007 statistics ** Airports Council International

  24. India’s Opportunity: Regional Hub Dubai & Mumbai Airports: Air Cargo Traffic (1991-2007) Source : CMIE Report March 2006 Dubai International Airport

  25. India’s Opportunity: Regional Hub Source: Press Information Bureau, CIA –World Fact book, Ministry of Finance and Department of Statistics, Malaysia, Central bank of thailand, DBresearch, Airport Council International, Airports Authority of India

  26. THANK YOU

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