Movement of goods by air has become expensive for exporters with the rise in air cargo fares. While fares have been inching upwards over the last few months, freight forwarders say that fares this May are the highest in the last several years.
“Fares have been the highest this month with many airlines charging Express rates for cargo. This is because of the high demand which is likely to continue till mid-June,” said Bharat Thakkar, vice president of the Air Cargo Agents Association of India.
Mumbai is one of the key cargo centers for international destinations. Each airline has a belly hold which can carry around 15 tonnes of cargo while some airlines like Lufthansa and Cathay Pacific have dedicated freighter services which can carry up to 80 to 100 tonnes of cargo. There are no set rates and charges vary from airline to airline. Demand for air space is high till May and June and drops during the monsoon
However, because of global recession last year, airlines had excess space through the year which was available at very cheap rates.
The high demand has resulted in high fares. Airlines said that in comparison to the last two years the air fares may seem high, but air cargo fares are more or less similar to what they were five years ago. “Air fares are back to what they were five years ago,” said Jay Shelat, vice president, cargo division, Jet Airways. Over the last few years, with airlines cutting down on capacity, the cumulative cargo capacity has also reduced. “While cargo capacity in airlines has decreased, global consumption has increased. The operating costs for airlines have increased — one reason is the hike in fuel price. Five years ago, the price of fuel was $30 a barrel, now it is $85 a barrel,” he said.
Further, despite economy picking up, airlines carried more goods in 2007- 2008. “The economy is slowly recovering but we are still carrying around 15 per cent less cargo than in 2007-08,” he said.
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