Source: Apparel India

India's civil aviation sector is poised for firm growth based on expansion plans for airlines. The expansion plans will enhance capacity for freight transportation for apparel producers, located at various clusters across the country.

The civil aviation sector is expected to remain quite buoyant based on the projected GDP growth rate of 8 per cent till the 12th five year plan. Based on the projected growth, airlines are going in for large scale expansion plans by acquiring new fleet, besides that they are also spreading their wings to smaller towns. However, growth can be countered by the ongoing volatility in oil prices.

As per the forecast goes, India's private airline is expected to post a combined profit of $350-400 million in the fiscal year that began in April but the state-owned airline, Air India Limited will suffer a loss of $ 1-1.25 billion as per the projections of CAPA (Centre for Asia Pacific Aviation). CAPA had predicted a profit of $ 250-300 million for private carriers in the financial year which ended on March 31, 2011, a loss of $ 650-700 million for the debt-laden Air India.

Indian carriers will place orders for up to 200 new aircraft this fiscal, with a list price of $ 11-12 billion including 125-150 narrow-bodied planes, 30-50 smaller planes, and 10-15 wide-bodied planes that are hauled for long-haul international flights. To fund their expansion plans, a couple of carriers will go for an initial public offering.

Strong Plans by Freight Carriers

Freight carriers are lining up major expansion plans. Blue Dart, the courier and package distribution company, has set its sights on ground cargo business in India by 2015. The organized air cargo segment business in the country was estimated at ₹1,481 crores during 2009. The ground cargo business in the same period was ₹1,727 crores, of which Blue Dart claims a share of 8.5 per cent. Cumulatively, the organized air cargo business in the country is estimated to have touched ₹3,800 crores in 2010.

Blue Dart Express, which claims market leadership in the air cargo business, closed the year ended December 2010, with revenues of ₹1,148 crores, with around 95 per cent of its revenue coming from B2B business. The company, which operated with seven hubs of cargo handling in 2007, had grown to have 16 hubs at the end of 2010. By the end of 2011, it is planning to have 20 hubs. The hubs range between 30,000 and 100,000 sq. ft. Blue Dart operates a fleet of seven air freighters - three Boeings 737 and four Boeings 757. The fleet operates at seven airports currently. However, with economic activity picking up in different parts of the country, the destinations and fleet size are set to increase. The company is planning to add airports in tier-2 and tier-3 towns, where it sees the growth happening. The airports would be in cities in North and South. As per the company, there are a lot of industry verticals using a lot of ground cargo handling. Prime among this was apparel followed by automobiles, consumer durables, FMCG IT, and Pharma. The company will focus on these segments. The company will focus on strengthening its infrastructure in tier-2 and tier-3 cities, which are production and consumption centers to grow ground cargo business. There will be a focus on small and medium enterprise besides ongoing design and customization of products. Blue Dart has over 5,300 vehicles used as ground cargo handling of roads, with over 170 of them being network vehicles. Expansion plans are also being lined up by air express companies, Gati, and Safe Express.