The recovery of the Indian air cargo market appears to be complete. Both international and domestic volumes higher than their respective 2018 and 2019 peak levels. Indian air cargo outperformed overall world air cargo growth in in 2024. Over the next five years we expect cargo traffic could grow from about 3.7 million tonnes today to between 5 and 5.8 million tonnes, or about 6-9% per year. We expect international air cargo to grow faster than domestic air cargo. Currently international air cargo accounts for about two thirds of air cargo handled at Indian airports.
Indian Air Cargo in Context
India is the world’s 5th largest air cargo market after the US, China, Hong Kong and Germany. In terms of domestic tonnage India ranks 3rd and takes 9th place for international traffic.
Global international air cargo growth for the 12 months ended October 2024 was 13%, led primarily by traffic generated across the Asia Pacific region.
Overall global air cargo growth was 11%, primarily because of a decline in US domestic traffic.
The Indian international air cargo market outperformed both the global and Asia Pacific average and is on track for around 19% growth in 2024. Depending on the source of data and measure Indian domestic air cargo grew between 6% and 8%. Overall airport tonnage handled is expected to be in the order of 14%. Domestic air cargo accounts for about one third of Indian airport tonnage, with most of the balance consisting of international tonnage. Mail generates a negligible share of overall traffic. Ninety percent of India’s air cargo is handled at six airports – Delhi (DEL), Mumbai (BOM), Bengaluru (BLR), Chennai (MAA), Hyderabad (HYD) and Kolkata (CCU).
Indian International Air Cargo Market Trends
Overall Indian international air cargo volumes have recovered and are higher than peak 2018 levels. Airport and route performance has been inconsistent. Delhi and Kolkata underperformed, while Southern Indian airports showed above average performance.
At a route level, data for the first half of the year shows strong performance for Southeast Asian freight, but weaker performance in other markets. Direct India to Europe as well as traffic via the Gulf accounts for about two thirds of Indian international air cargo. Although not reflected in airline traffic data, year to date trade data through to October shows an increase of air trade between India and Europe in the order of 16% compared to 2023. Different data sources paint a different picture.
At a carrier level, the three main Gulf carriers Emirates, Qatar and Etihad have a combined market share of one quarter of Indian international freight. Indian carriers have a combined market share of between 13-15%. Prior to the demise of Jet Airways in 2019, Indian carrier market shares peaked at 21% of international traffic. Both the Air India and IndiGo widebody fleet order backlog will likely see Indian carriers increasing their share of their home market.
Indian Domestic Market Trends
While Delhi underperformed internationally, domestic volumes increased by 14% – much higher than the overall average of 8.1%. Carrier level traffic indicated growth of about 7% for the same period. A certain discrepancy between carrier and airport data is to be expected as transfer traffic is double counted in airport handling statistics.
November traffic figures released in early January 2025, show a drop in domestic traffic. This appears to be primarily as a consequence of a drop in reported traffic by Vistara, which completed its merger with Air India in mid-November.
Indigo is the largest carrier in terms of domestic traffic with a market share of 38%. This is followed by the combined market share of all Air India Group airlines with 30%. Express operator Blue Dart has a 19% market share. Amazon’s subcontractor Quikjet only moves about 2% of the market. In terms of growth, the dedicated express and e-commerce platforms have not done as well as the overall market. SpiceJet, whose three freighters continue to be parked, moves only about one fifth of its 2019 cargo levels.
India Air Cargo Market Forecast
Strong expected economic and trade growth is likely to drive additional air cargo volumes over the next five years. We expect the Indian air cargo market to outperform the overall global air cargo market. Our forecast range for Indian air cargo volumes in the next five years is between 6.2% and 9.1%. This is higher than recent performance, but in line with longer term performance between through to 2019. These growth rates would imply an increase in cargo volumes from about 3.7 million today to between 5 and 5.8 million by the end of 2029.
Freighter Market Impacts
A notable feature of the Indian air cargo market is the non-existence of India domiciled large widebody freighters. The current Air India and Indigo aircraft order backlog does not foresee any freighters. Collectively, at the end of November 2024 Indian carriers (Blue Dart, IndiGo, Pradhaan Air Express and Quikjet operate 14 freighters, all of which are narrowbodies. Three SpiceXpress 737-700 remain parked. Additionally, new entrant carrier Afcom Cargo shows one aircraft in operation and is expected to activate a second unit shortly. Despite a doubling of the active fleet since 2018 it is worth noting the Indian operated fleet is smaller than it was in 2009/2010. Yet the Indian cargo market today is twice the size as it was then.
Most cargo market growth has been accommodated by an increase in belly capacity on passenger aircraft – both widebody and narrowbody aircraft. This is a somewhat unique feature of the Indian cargo market – while narrowbody services generally carry very little freight in other markets, average cargo loads of 2-3 tonnes per flight are not uncommon in India.
An abundance of belly capacity has made the market unattractive for freighter operators. However, this could change given the level of market growth as as well as the more restrictive approach to granting additional traffic rights for passenger services to non-Indian operators. Freight services face relatively few restrictions due to a continuation of the open skies policy for such operations.