Air cargo comprises goods with high-value, high-time dependency, or perishable cargo. Growing at 6% pa, the world airlifted cargo accounted for 2% of international trade by volume and 30% by value in 2006-07. Its growth has traditionally exhibited strong correlation with world GDP growth. Boeing forecasts that 60 million tonnes of cargo will be transported by air in the year 2017.

Exhibit: Share of air lifted export commodities in India in 2006-07

Source: AAI/Air India and CRISIL Analysis.

Perishable include seafood, fruits & vegetables, cut flowers, eggs etc Miscellaneous includes hazardous Chemicals, Pharmaceuticals, Unaccompanied baggage, Tea, Mica, Dangerous goods etc.

Major destinations for India’s perishable goods are Gulf countries (66% of total perishables) and UK (12%). Mumbai and Delhi are major cargo center of India accounting for 57% of air cargo export and 54% of India’s air cargo import. This is owing to well developed infrastructure and vicinity of industrial activities around these two metros. Mumbai is leading in export of perishable product export with 49% market share.

It can be noticed that Gujarat has strong industrial presence in major air cargo categories. Gujarat’s share of national output is 30%, 16% and 6% in chemical and pharma, textiles, apparel and engineering goods respectively. Currently Gujarat’s airports handle 2% of India’s air cargo of 2007-08 as seen below. Ahmedabad is the leading air cargo center accounting for 83% of state’s air cargo traffic in 2007-08. Cargo traffic of Ahmedabad airport comprised 44% domestic and 56% international cargo (2006-07).

Exhibit: Air cargo traffic at Gujarat's airports (tonnes)

Source: AAI and CRISIL Analysis

Ahmedabad is also the leading airport handling 67% of Gujarat’s domestic air cargo traffic. This is followed by Vadodara (26%) and Rajkot (7%) Rajkot airport. In last three years, the growth of air cargo at Ahmedabad Airport was 16.6% as against 10.5% of national air cargo industry growth .

Ahmedabad is also the leading airport handling 67% of Gujarat’s domestic air cargo traffic. This is followed by Vadodara (26%) and Rajkot (7%) Rajkot airport. In last three years, the growth of air cargo at Ahmedabad Airport was 16.6% as against 10.5% of national air cargo industry growth .

Exhibit: Share of air lifted export commodities at Ahmedabad airport in 2006-07

Source : AAI

In this perspective, Gujarat’s strength in chemical, textiles and horticulture can be leveraged by augmenting air cargo export from the state. Air cargo by definition is extremely time sensitive and/or high value cargo and it is possible to find export orders if facilities for quick transport are available.

Gujarat also has a potential in perishable goods due to considerable emphasis on the development of horticultural crops. The major fruits crops grown in Gujarat are banana, mango, citrus and chikoo. Major vegetables grown in Gujarat are onion, potato, brinjal, tomato, okra and cucurbits. The productivity of fruit crops and vegetable are estimated at 18.18 MT/ha, 16.56 MT/ha which is higher than the national average The State also produces spices such as cumin, fennel, and garlic and enjoys a virtual monopoly in seed spices. Area under flowers like Rose, Lily and Marigold is increasing. Various aromatic plants like pacholi & pamaroza is cultivated in the southern part of the State. There is a scattered cultivation of medicinal plant like allovera, sena, gugal in the State.

Gujarat also has 12 co-operative milk plants with combine milk handling capacity of 70.10 lakh litres per day, 11 private dairy plants and 12991 co-operative dairy societies. South Gujarat region is leading producer of flowers and fruits and central Gujarat region is leading producer of milk and flowers. Thus the production of perishable industries products in central and southern regions can further be strengthened through provision of adequate air cargo lifting facilities at Ahmedabad and Surat.

Given the large presence of chemicals and pharmaceuticals in the air lifted cargo, it could be extremely beneficial to locate an air cargo hub around Bharuch / Dahej area. PCPIR could host a large air cargo complex along with proposed MRO facility.