New cargo carrier Deccan 360 copies low-fare biz plan

EXPRESS logistics start-up Deccan 360 aims to offer lower cargo tariffs than rivals by keeping costs down, says founder GR Gopinath, who plans to reproduce his own experience in setting up Air Deccan, India's first budget airline.

"We are selling our product on expansion network besides distributing cargo 10-15 per cent cheaper," Mr Gopinath told India's Economic Times.

"The mandate is to keep the cost structure as low level as possible by introducing new technology and operating a larger network. In the next few years, we could be serving 500 cities of the country," Mr Gopinath said, with the report noting that Deccan 360 plans to grow based on a franchisee model in most of the cities.

It said the cargo airline plans to invest INR4 billion (US$87.3 million) in building infrastructure, including warehouses, as well as fleet expansion.

Deccan 360 operates a fleet of seven air freighters, comprising five ATRs and two Airbus A310s that serves about 10 destinations. The company also operates a fleet of nearly 1,000 trucks.

The report noted that India's domestic express cargo industry is growing 15 per cent a year. "The industry has, however, potential to grow at much faster rate given the pace of economic growth in the country," it said.

"We have just 15 cargo aircraft compared to 100 in China. The Chinese air cargo industry is worth about $5 billion," Mr Gopinath added.

(Source: www.schednet.com)