SpiceJet has scripted one of the most remarkable stories in Indian aviation, especially during the ongoing crisis, transporting over 17,535 tonnes of essential cargo on more than 2478 flights, of which 920 were international cargo flights. The carrier also continues on its mission to help Indian farmers maintain continuity of their supply chains by transporting fresh produce across India and abroad, with an ever-growing ambitious fleet and route expansion underway. Sanjiv Gupta, CEO, SpiceXpress informs Upamanyu Borah, on the most critical aspects that have helped the carrier to offer efficient and viable solutions, ultimately driving the growth that lies ahead.
How may we best summarise the current state of the air cargo market? Does it continue to strengthen, or has it plateaued?
IATA projects that the global airline industry will lose $314bn in 2020, representing a 55% reduction from 2019 revenue.
The current air cargo industry witnessed a correction over the last three months. Needless to say, this is a phenomenon that was observed across industries and countries. We must not forget that business cycles always take a correction before the next wave of growth.
The market will continue to grow as far as air cargo is concerned. We view this as an opportunity to re-create our organisation in-line with our customers’ re-engineering efforts.
What are the biggest macroeconomic drivers for the industry and how are they re-shaping India’s air cargo market?
The emphasis for ‘Make in India’ is a shot in the arm for local industry, with the Vocal-For-Local initiative to drive up economic growth and bring a positive impact across sectors.
Additionally, the Indian agriculture, fruit farming, aquaculture and animal husbandry communities have now started to embrace the change and make the best of opportunities to market their produce internationally.
Then there is the newly evolved medical supplies sector, which forms a large part of the cargo movement– including PPE Kits, face masks and ventilators.
In June, the first market segments to see re-start of transportation by air again are technology products and mobile phones.
Each country has slightly different interpretations of certain regulations and compliance, given their unique regulatory development path. Coming from a slightly domestic perspective what you see as some of the differences, the unique interpretations of compliance?
There is an open skies approach as far as cargo is concerned. As we operate in various countries, we have learnt about the required regulations and compliance and have been adhering to it.
Can you give us an overview of the emerging cargo gateways in the developing world?
There are a few developing cargo hubs in Asia and Middle East region. We feel that these could be upcoming cargo gateways to cater to the local needs. The ones that we have explored to cater to Central Asia in the last few months are:
- Almaty International Airport, Kazakhsthan
- Islam Karimov Tashkent International Airport, Tashkent, Uzbekistan
- Manas International Airport, Bishkek, Kyrgyzstan
Apart from these, Dhaka in Bangladesh and Yangon in Myanmar could be the upcoming hubs in South Asia owing to the growing local consumption.
How should companies use technology to leverage emerging patterns during disruption?
During such disruptions, supply chain technology and data play a role which is paramount. Organisations across the globe are trying to stabilise or alter their supply chains, or completely re-engineer it. At this point, it is the data gathered that will help decision-making. Additionally, newer technology could be used for first and last-mile transportation as well as intra-warehouse pick and pack operations. One such technology that we are seriously considering are drones. You will hear more about this from us in the days to come.
With SpiceXpress extending its international cargo operations more than ever, how well are you positioned in terms of fleet and overall infrastructure?
As far as SpiceXpress is concerned, we are now poised to take off. We have the unique advantage of being a successful airline for the last 15 years.
We have the best combination of passenger and cargo fleet and well positioned to cater to the regional requirements including Asia Pacific, Central and Southeast Asia, and Arabian countries. We are using Boeing 737 freighters for cargo purpose. We have also started using our smaller aircraft (Bombardier Q400) as cargo freighters. Most recently, we pioneered the usage of ‘Cargo on Seat’ flights in the country. We have gained immense learning and developed an international market in the last three months.
This experience and infrastructure is invaluable, and helping us to be flexible in our international cargo operations.
In addition, we are using UAE’s Ras Al Khaimah International Airport (RKT) as a hub and have been able to connect to Africa.
Any best-in-class solution that you have implemented recently as part of the ongoing venture into cargo-only operations?
Our proprietary enterprise resource planning (ERP) system ‘SpiceTag’ has helped a lot in offering visibility to our customers. Therefore, we have decided to extend the service to our airport-to-airport business as well.
Today, we use SpiceTag with a combination of ultra high-frequency radio-frequency identification (RFID) tags, smart apps, global information system (GIS), and for EDI and API integration into customers’ cloud ERP systems. Other than that, our new customers initiate engagement with us through our website and are managed on Salesforce CRM software.
Then there are simple solutions that take us back-to-the-basics. We employ bikers for last-mile delivery in areas that are hard to reach through conventional use of vehicles. This also supports our social commitment on employment generation.
Going forward, we plan to use electric vehicles for first and last-mile operations in accordance with our commitment to sustainability.
How flexible is SpiceXpress when it comes to last-minute calls for any urgent transport of mission-critical shipment?
We have been able to demonstrate to our customers that we are the most flexible cargo carrier. Domestically, we have been able to place flights within a few hours of being notified. Internationally, we have been able to do this within 24 to 72 hours. This has turned a key differentiator for us.
Could you explain on how human resources have been important to the bottom line of your business during the crisis?
In the air cargo business, the variables are too many – including weather, geopolitical disruptions, and so on. We are always prepared for eventuality and exception even during usual business times. A crisis like this one can almost never be completely planned for.
This single most important factor helping us successfully sail through choppy waters are our people. Since the beginning, we always ensured that building up a resilient team is an important part of our ethos. This resilience was tested and proven during this time of crisis. Like I mentioned earlier, we managed to keep our operations running with minimal downtime. Our corona warriors really stood up and delivered when it meant the most.
What is your growth strategy for the medium to long-term?
As SpiceJet, we are in a unique position where we can leverage our fleet strength, and our strong dominance in the Indian cargo market.
We have grown by 72% for the period of March to June against the same period last year. Based on the demand from the market, we will assess our growth strategies from time to time.
As an organisation, what is the biggest threat you face living in a fragile global economic system and disrupted times?
The biggest threat is the inability to plan beyond a few days, in the current fragile economic system. As it is, 65% of air cargo dispatches are always planned on the day of dispatch, or a day before. However, with every threat comes opportunity. Due to the fragility, we have been able to demonstrate to our customers that we are the most flexible cargo carrier.
What the industry needs to do right now to get the services back and strong to those who need it?
While global passenger traffic has almost completely evaporated, global air cargo volumes declined by only 47% by the end of March 2020 compared to March 2019, and there has been a rebound with volumes down only 32% by the end of April 2020. The rebound clearly indicates that the global economy is trying to get back to normalcy.
The air cargo industry needs to be available and flexible to the market because consumption demand will grow back to early-2020 levels, if not more. Air cargo management should be challenged to provide air cargo products that meet the new realities of consumer and industrial demand- for quality, speed and transparency throughout.