As India’s civil aviation landscape continues its post-pandemic resurgence, four newly launched airlines—Shankh Air, Air Kerala, Alhind Air, and Fly91—are reshaping the country’s domestic aviation profile in a way that could hold considerable promise for growth.

While these carriers have entered the market primarily to serve underserved passenger routes, their operational strategies, fleet choices, and network ambitions signal an untapped cargo potential, particularly across tier-2 and tier-3 cities. In a country where more than 85 percent of airfreight continues to move through six primary metropolitan airports, these new entrants could play a pivotal role in bridging India’s logistical periphery to its economic core.

Regional aviation meets air cargo goals

India’s National Civil Aviation Policy (NCAP) and its ambitious Ude Desh ka Aam Nagrik (UDAN) scheme have long underscored the importance of democratising air travel and regional connectivity. Yet, until recently, cargo operations—especially at smaller airports—remained secondary considerations. That may be changing.

Fly91, which has already commenced over 150 weekly flights with ATR 72-600 aircraft from its Goa hub, exemplifies the operational model that could support decentralised cargo flow. Similarly, Alhind Air, with a focus on intra-state connectivity in Kerala and neighbouring regions using the same turboprop aircraft, has the potential to enable quick cargo transits for time-sensitive commodities like seafood, spices, and apparel.

Meanwhile, Shankh Air and Air Kerala, both adopting the Airbus A320 family for regional operations, are aiming to scale fast across India’s heartland—linking cities like Lucknow, Varanasi, and Kannur to primary urban markets. These routes, while designed for passengers, come with modest but usable bellyhold cargo capacity that can benefit exporters and small businesses.

Cargo potential 

India handled 3.4 million tonnes of air cargo in FY 2023–24, a number projected to increase to 10 million tonnes by 2030 under the National Air Cargo Policy. But most of this capacity is concentrated in Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, and Kolkata, which together manage nearly 88 percent of the national air cargo load.

By contrast, tier-2 cities such as Gorakhpur, Kolhapur, or Kannur—many of which now fall within the networks of these new carriers—lack dedicated air cargo infrastructure or frequent feeder flights. This mismatch between demand and capacity is a long-standing constraint for industries like e-commerce and agriculture.

According to the Agricultural and Processed Food Products Export Development Authority (APEDA), Uttar Pradesh alone accounted for over $2 billion in agricultural exports in 2022–23. The availability of same-day or next-day airfreight services from tier-2 cities could reduce post-harvest losses by an estimated 15 to 20 percent, especially for perishable categories like fruits and vegetables.

India’s e-commerce sector, currently valued at around $70 billion, also stands to gain. Faster order fulfilment from regional warehouses enabled by short-haul airfreight services could reduce delivery times in remote areas, improve customer satisfaction, and lower logistics costs per shipment.

Operational trade-offs

While the ambitions are high, aircraft choice imposes constraints. The ATR 72-600, used by Fly91 and Alhind Air, has a maximum bellyhold cargo capacity of approximately 1.8 to 2.5 tonnes, which fluctuates based on fuel and passenger loads. A320 aircraft used by Shankh Air and Air Kerala offer greater capacity—typically 4 to 5 tonnes—but still far below that of widebody freighters.

In the case of regional connectivity, operators must navigate a tight balancing act. They need to optimise load plans for weight and volume, especially at smaller airports with short runways and limited refuelling or cargo ground-handling capabilities. Further, most tier-2 airports lack cold chain storage, high-speed handling systems, or bonded warehousing for exports. This limits the scalability of perishable cargo operations. Many airports under the UDAN scheme have limited customs clearance capabilities, creating additional layers of documentation and delay.

Infrastructure gaps 

Infrastructure remains a central challenge. As highlighted in various government think tank reports, India’s smaller airports frequently suffer from inadequate last-mile connectivity, limited cargo bays, and the absence of trained handlers for specialised shipments.

In response, the Ministry of Civil Aviation has launched cargo-specific offshoots of UDAN—most notably, Krishi UDAN 2.0, aimed at facilitating air transport of agri-produce. However, implementation remains inconsistent. Policy experts argue that offering viability gap funding (VGF) or operational subsidies to regional airlines that dedicate part of their fleet or frequency to cargo can help create commercial certainty.

In tandem, the Unified Logistics Interface Platform (ULIP), being piloted across sectors, must also be extended to regional airports, streamlining customs documentation and tracking. Regional cargo must move from being a ‘by-product’ of passenger flights to a line of business in itself. However, incentivising dedicated short-haul cargo operations—even using the same fleet—will require a strategic push and regulatory clarity.