Air cargo capacity needs sizeable expansion and upgradation to meet rising demand: ICRA

Given the expected growth in air cargo volumes in the country, the cargo handling capacity at airports would need to be upgraded by around 2.0 million tonnes over the next five years. The air cargo infrastructure in India is increasingly getting constrained by the strong growth in traffic for last few years, mentions an ICRA note. Cargo traffic in India crossed 2.98 million tonnes in FY2017, registering 10 per cent Y-o-Y increase and reached 2.5 million tonnes over 9M FY2018 (15 per cent Y-o-Y). Indian airports are estimated to have a combined capacity to handle 4.63 million tonnes of cargo per annum as of now – translating into utilization of around 75%.

The movement in cargo traffic is largely linked with the level of economic activity in the country. With the expected growth in GDP, along with other growth drivers, the air cargo traffic is expected to get a major boost. ICRA expects the air cargo traffic in India to grow by around 60% to 4.7 million tonnes in next five years – translating into CAGR of 9.7 per cent.