FTCCI seeks restoration of freighter services at RGIA

Hyderabad: The Federation of Telangana Chambers of Commerce and Industry (FTCCI) has sought restoration of freighter services at the Rajiv Gandhi International Airport here. Post Covid, operations of freighter airlines were removed from the ambit of Open Skies Policy and cargo operations were instead brought under Bilateral Air Services Agreements (BASAs). In a representation to […]

Hyderabad: The Federation of Telangana Chambers of Commerce and Industry (FTCCI) has sought restoration of freighter services at the Rajiv Gandhi International Airport here.

Post Covid, operations of freighter airlines were removed from the ambit of Open Skies Policy and cargo operations were instead brought under Bilateral Air Services Agreements (BASAs). In a representation to the Civil Aviation Secretary Rajiv Bansal on Monday, FTCCI president Anil Agarwal stressed on restoration of the earlier framework of Open Skies and free the cargo flights from restrictive passenger BASAs. It also wanted restoration of Lufthansa and Cathay operations covering Hyderabad as one of the ports and help maintain the competitiveness of exporters and importers of Telangana.

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Among others, Hyderabad accounted for 40 per cent of the total Indian bulk drug production and about 50 per cent of the bulk drug exports. Hyderabad also accounted for over 30 per cent of all the vaccines produced globally. International connectivity (direct freighters) is needed to maintain this position, Agarwal said.

Telangana, being a landlocked State, has high dependency on air cargo for both export of finished goods and imports of raw materials. Prior to the pandemic, RGIA enjoyed good freighter connectivity to major global hubs with operations by Lufthansa Cargo (to Frankfurt) and Cathay Pacific Cargo (Hong Kong). These freighter services allowed local industries to integrate with global supply chains at competitive rates and rapid connections.

However, due to the changes in rules enforced via DGCA AIC 41/2020 dated December 31, 2020, the operations of freighter airlines were removed from the ambit of Open Skies Policy. The cargo operations were instead brought under Bilateral Air Services Agreements (BASAs), which were designed and intended to manage the operations of passenger services on international routes.

The change in rules resulted in curtailment of two-port landings by foreign carriers flying a multi-stop circuit route within India, dropping off/picking up international cargo from multiple Indian cities before heading back to overseas bases. With the change in rule, such flights were restricted from connecting more than one Indian city in the same journey.

With cabotage (the transport of goods or passengers between two places in the same country) restrictions already in place, such flights were only carrying international cargo and no transportation of cargo between two Indian cities was permitted on such flights. Crucially for smaller metros such as Hyderabad, such two-port flights reduced the cost of global connectivity by sharing a single flight across multiple cities. This enabled smaller Indian cities to access global markets in a fast and economical way.

Under these new rules, the Cathay Pacific flight previously operating Hong Kong – Delhi – Hyderabad – Hong Kong or the Lufthansa flight operating Frankfurt-Mumbai-Hyderabad-Frankfurt on a single journey is no longer permitted. These freighters were crucial trade links for local industries in Telangana, and these two carriers combined had carried around 15,000 MT cargo in 2019-20, accounting for around 17 per cent of the total international air cargo volumes handled at RGIA during the period, said Agarwal.

The curtailment of Open Skies for Cargo is having unintended negative consequences on many industries reliant on export and import of goods by air cargo. Exporters and importers in Hyderabad have lost these key connectivity options that were previously being provided by hopping or fifth freedom flights (a flight by an airline between two countries where neither of them are the airline’s home base).

The curtailment contributed to making air cargo unaffordable and making exports unviable particularly for agriculture products, fruits and vegetables, he said adding that air cargo in particular is an important economic driver and job generator.
The move to restrict air cargo connectivity will be counter-productive to the PM Gati Shakti Master Plan, which aims at providing multi-modal connectivity, including air cargo, to remove regional/sectoral imbalances in infrastructure and connectivity.

* Operations of freighter airlines removed from the ambit of Open Skies Policy

* Cargo operations now under Bilateral Air Services Agreements
* Freighter services allow local industries to integrate with global supplychains at competitive rates