Airports, airlines, exporters, and associations, have welcomed the Open Sky policy as they anticipate improved efficiency, expanded exports, and alignment with the govt’s economic targets. It has provided ample capacity to assorted destinations, the space crunch has shrunk due to availability of space. Its revival may see accelerated infrastructure development at non-metro airports.
Ritika Arora Bhola
The Open Sky policy allows airlines to operate non-schedule cargo flights without restrictions on routes, capacity, and frequency, fostering competition and efficiency. For air cargo, this leads to enhanced flexibility, lower costs and more cargo space in several routes and rise in frequencies, essential for faster delivery times and global expansion.
The revival of the policy is a significant development aimed at enhancing efficiency and competitiveness of the sector. It is essential for boosting air cargo operations as it allows demand-based access to airspace, fostering an efficient sector. This policy is crucial because it promotes increased connectivity, enabling the firm/s to expand its reach into more markets, thereby leading to faster and efficient movement of goods, critical for time-sensitive air cargo.
Since global e-commerce grows, the demand for faster, more flexible logistics solutions increases, the Open Sky policy supports this by facilitating faster transport, which is vital for handling high-value, time-sensitive goods.
The policy also contributes to broader economic growth by increasing volumes and improving cargo traffic. The policy can benefit air cargo agents by opening new opportunities and streamlining operations in the air logistics sector. With fewer restrictions on international air carriers and routes, the Indian air cargo agents can gain access to a broader network of airlines and destinations thus enabling them to offer flexible and efficient services to their clients. The increased competition that comes with the policy can not only reduce costs but also allow the air cargo agents to negotiate better rates for air freight services.
With more airlines operating in Indian airspace, there is every likelihood of greater frequency of flights, reducing transit times and improving the flexibility, speed and reliability of shipments. For the cargo agents specialising in time-sensitive and high-value goods, such as e-commerce products or perishables, the policy, with more direct routes in place, ensures faster and quicker deliveries. This enhances their ability to meet the demands of global trade.
The policy has the potential to boost connectivity and international trade by removing restrictions on global airlines; the policy allows more carriers to operate in each country’s airspace, which directly enhances connectivity. This expansion of available routes leads to access to global markets facilitates faster, flexible and efficient movement of goods across borders.
With greater connectivity, the logistics chain becomes more seamless, reducing transit times and enabling air cargo agents to offer quicker and reliable services. This is important for sectors, such as e-Commerce, pharma, and perishables, where time-sensitive deliveries are critical. In terms of global trade, the Open Sky policy encourages global trade, making it easier and cost-effective for businesses to import and export goods. By increasing competition among airlines, the policy can lead to reduced cargo costs, making it more affordable to access distant markets. This also drives higher trade volumes and allows countries, including India, to become integrated into the international economy.
CARGOTALK speaks to industry experts about the benefits of the policy and challenges in its implementation and execution in the market.
Policy crucial to achieve 10 MMT target by 2030
Satyaki Raghunath, COO, BIAL
The reinstatement of the Open Sky policy is in harmony with the government’s objectives. This policy plays an important role in achieving the government’s target of 10 MMT by 2030. We appreciate the move. The policy is likely to enhance cargo movements, particularly benefiting perishables trade, by permitting foreign cargo carriers to operate from all international airports. This initiative enables farm producers and exporters in interior regions of India to access global markets. We are hopeful this new move will help create a more dynamic and competitive air cargo environment, benefiting exporters and the Indian economy as a whole.”
Airports must be prepared to handle surge in volumes
Kamesh Peri, CEO, Celebi Terminal Management India
While the policy is beneficial for cargo ops, bottlenecks could hinder its impact. As air traffic increases, inadequate facilities can lead to congestion and delays. Without required upgrades, the ability to handle volumes will be constrained, undermining the benefits of improved connectivity. Complex procedures can slow down goods flow. While the policy itself promotes liberalisation, the frameworks are not equipped to support rise in air traffic. As the number of flights increase, airports may struggle to allocate landing slots; can lead to delays and higher costs.”
Policy complicated, may create regulatory bottlenecks
M Afzal Malbarwala, Managing Director Galaxy Freight
The policy’s implementation can face bottlenecks, including domestic resistance. Domestic airlines may resist it as they fear increased competition from foreign airlines. These airlines may argue the the policy will hurt their businesses and cause job losses. The policy’s implementation requires infrastructure to manage the increased cargo traffic. If airports lack the required infrastructure or are located far from major business centres, it can limit the policy’s benefits.”
Global gateways to support rural India’s market reach
Vikram Mansukhani, Chief of Operations, Blue Dart Express
The ongoing issue facing air cargo has been the volatile price of ATF, which accounts for our highest cost input. The Indian Rupee’s depreciation has impacted lease and inventory costs. Creation of capacity and cost-efficient logistics solutions in tier II and III airports to feed into domestic hubs, and global gateways will support rural India’s market reach. States and 3PL providers have come together to find innovative solutions to address this challenge. The government has designed LEEP to improve logistics efficiency using infra such as building 35 MMLPs, and introducing tech and digital solutions.”
Agents to lower rates once Indian skies open
Amit Maheshwari, Founder and CEO Softlink Global
The policy will unlock new opportunities by allowing carriers flexibility in choosing routes and schedules. This freedom leads to more capacity, reduced costs, and faster service, vital in today’s fast-paced logistics environment. For agents, this policy means more choices in routes and airlines, enabling them to respond faster to client needs and helps build competitiveness. By increasing flight frequencies and opening new routes, trade can move faster. This step is critical for India as it positions itself as a player in supply chains, providing access to global markets.”
Policy to transform India into key logistics player
Nihar Parida, Air Cargo Consultant & specialist
Expanding the Open Sky policy for air cargo is an essential step toward improving the nation’s logistics network, boosting export efficiency, and enhancing global competitiveness. It aligns well with India’s economic ambitions and has the potential to transform it into a significant global logistics player, provided there is concurrent investment in infrastructure and technology. At the same time, India should consider the scope of an the policy for air cargo, balancing the potential benefits of increased efficiency and global linkage with risks of market saturation, security concerns, and need to protect domestic airlines and infrastructure among others.”
Open Sky framework to optimise air cargo flow
C.K. Govil, CMD, Activair Airfreight and President, ACAAI
The policy would enable connectivity by allowing airlines to operate routes, improving access to global markets. This will help Indian businesses expand globally. Increased cargo flights would alleviate existing capacity constraints, especially during peak seasons when demand for freight transport is high. Competition between the various airlines leads to improved service levels, including faster transit times and better handling. Flexibility in flight scheduling under this new policy helps optimise air cargo movement, reducing delays and improving time-sensitive deliveries.”
Movement of goods across borders will be efficient
Nikhil Agarwal, President, CJ Darcl logistics
The policy allows agents to enter unexplored markets without limitations, enabling them to form partnerships with a wide range of global carriers. By gaining access to an expanded market, the agents can capitalise on increased revenue streams and opportunities. The frequency of flights under the Open Sky policy will provide them with flexibility in scheduling, essential for managing time-sensitive shipments and optimising operations. The improved connectivity between major international hubs leads to more efficient transit times and reduced lead times thus benefiting both the air cargo agents and clients.”
Slashing dwell times, delay for boosting efficiency
Balajee Bobba, Director, Bobba Group
Incentivising and promoting digitization of end-to-end processes and reducing manual interventions to speed up workflow. The existing manpower should be educated and made aware about latest updates in advanced technology. This creates a win-win synergy on personal and organisational growth. Similarly, expansion of facilities with a strong focus on future growth and reduction of dwell times for quick clearance and maximising efficiency. Stronger links with key global trade hubs will ease movement of goods, reducing logistics costs and speeding up exports and imports positioning India as an integrated and competitive player in global trade.”
Cargo ops from global airports will reduce costs
Abhishek Goyal, Executive Director Aeroprime Group
Air cargo agents can leverage the presence of foreign carriers to access new markets, routes and handle larger volumes that were, unavailable or limited. This will enhance competitiveness by reducing operational constraints, increasing efficiency, and offering more cost-effective solutions. The Open Sky policy will facilitate the movement of perishables and time-sensitive products, which is crucial for exporters who depend on timely deliveries to global markets. Seamless movement of goods will allow exporters to reach unexplored markets faster and at lower costs.”
Security of products during transit will be main challenge
Sunil Kohli, Managing Director Rahat Cargo
The challenge before the agents and the carriers are to adhere to safety components of air cargo by implementing fool proof security measures. It goes without saying that implementing high-end technology and stringent security protocols at every step of air transport entails a hefty investment. The cargo shipments undergo screenings and tests, before loading, during transit, and after landing. The thorough background checks on employees and equipment to facilitate air transfer with caution, save the products from tampering or theft.”
Agents can build biz ties, leading to collaborations
Neetu Chadha, Associate Director, Air Exports, WIZ
Open Sky policy has expanded network improves linkage and reduced transit times and increased capacity. Lower costs can translate into reduced freight rates thus making cargo an attractive option compared to other modes of transport. By improving connectivity and reducing costs, the policy supports global trade. Businesses can reach new markets and products move quickly across borders. The agents’ access to global markets allows them to facilitate trade between India and other countries efficiently.”
