India-based low-cost carrier SpiceJet and Bahraini flag carrier Gulf Air signed a memorandum of understanding on Nov. 20 to explore greater cooperation, including coordinating cargo services.
SpiceJet’s cargo operation, SpiceXpress, is rapidly growing. It has benefited from the shutdown of Jet Airways, once India’s largest full-service airline, which owned a 10-15% market share of cargo flowing from India. The Indian air cargo industry is projected to reach 17 million tons by 2040, according to a note in SpiceJet’s latest annual report.
India’s second-largest airline operates about 630 daily flights to domestic and international destinations, including 50 destinations in India, with a fleet of 114 aircraft, mostly Boeing 737s. The carrier plans to add four more freighter aircraft to its three dedicated 737 freighters during fiscal year 2019-20.
To underscore SpiceJet’s recent focus on cargo, the carrier has set its sights on an initial public offering (IPO) of its 1-year-old cargo unit, driven by a burgeoning e-commerce market. SpiceXpress could be taken public within 12 months, as Ajay Singh, chairman of SpiceJet, hinted in a September interview, although the size of the proposed capital-raising exercise is not yet clear.
Gulf Air serves 47 cities in 26 countries with 82 weekly flights using 37 passenger aircraft. SpiceJet currently does not operate flights to Bahrain. Gulf Air serves eight destinations in India that mostly overlap with SpiceJet.
“Gulf Air also has strong cargo operations to Europe and Africa, and we can have strong cooperation with SpiceJet on strengthening each other’s cargo businesses,” Kresimir Kucko, CEO of Gulf Air, said in announcing the partnership.