Indian Airlines ties up with Emery for cargo
18 August 1999
Indian Airlines and Emery Worldwide have entered into a strategic alliance for transporting cargo between Singapore and India. Indian Airlines has announced a reciprocal arrangement with Emery under which it will guarantee space on its planes to Emery in return for guaranteed volumes and revenue from Emery.
Emery is primarily a freight transportation company. Emery Worldwide is a subsidiary of the $5 bn transportation and freight major CNF Inc.
Indian Airlines says that cargo has always been a profit centre for the airline, and it expects incremental revenue of at least Rs 1 crore for a six-month period from this alliance. Emery is also very optimistic about the alliance, and says it expects its cargo movement to India to double to around 300 tonnes per year by the year 2000, and revenues from Indian operations to hit Rs 120 to 130 crore by the year 2001.
According to the agreement, Indian Airlines would bring cargo for Emery from Singapore to Chennai and fly it to Bangalore, Delhi, Mumbai and Calcutta, and will guarantee space on five of its Singapore-Chennai flights.
Sources in the industry say that cargo movement between Singapore and India has been steadily rising in the past few years and that the Singapore-India sector is important for the airline as it constitutes 30 per cent of its international cargo traffic.
The company has been said to be exploring opportunities to expand in areas such as logistics and value-added services, cargo handling at airports and warehousing for large companies in India. At present, Emery has a turnover of Rs 50 crore in India, which is expected to grow annually by 40 per cent. Earlier this year, the company had evinced interest in Maruti Udyog to provide its management expertise and modern technology to move the vehicle and spare parts of the company more efficiently to dealers and retail outlets.