Ground handling company Celebi Aviation will focus on technology-led growth for its warehouse and cargo services and is hopeful of complete recovery in its ground handling business once international flights reach pre-covid level in India.
The company has so far invested over $220 million in India with investments catering to upgrading infrastructure to handle more than 700,000 tons per year, increasing perishable cargo capacity to 65,000 tons per year, undertaking security initiatives and adding additional handling equipment and a dedicated transshipment centre. Specifically over the last two years, the company said that it has dedicated its energy towards investment in technology and digitising the workspace.
Going forward, Celebi aims to enhance its warehouse management system to include new features to bring in more productivity and also wants to enable extensive digitisation.
“We shall be exploring technologies like IOT, AI, Blockchain in different areas like temperature monitoring, data integration with airport systems, routine tasks automation etc. Adopting tools for digitisation of manual paper-based processes for improved efficiency would be actively pursued,” Mr Kamesh Peri.
While the company’s ground handling business suffered due to ban on scheduled international commercial flights for almost two years, the air cargo market came under the spotlight and emerged as a major revenue stream with revenue from cargo in the Indian aviation sector growing in the last year from Rs 1,498 crore to Rs 2,300 crore.
“The industry is getting back very slowly as we learn to co-exist with the virus. With this, we’re hopeful that the airlines will start returning back to their pre Covid capacity soon. …the business (ground handling) for us mostly depends on the demand for international flights. We expect that to come back steadily to pre Covid levels by next year early. Our Cargo warehousing stream is almost back to old levels,” Mr Murali Ramachandra, CEO-India.
Currently present at Mumbai, Delhi, Bengaluru, Hyderabad, Cochin and Ahmedabad, the company is planning to expand operations at other airports as well. The company ventured into cargo and warehousing services in 2009 with the establishment of Delhi Cargo Terminal Management India Pvt Ltd, a joint venture between Delhi airport and Celebi Aviation.
“It was only during the pandemic that the Indian air cargo could catch the market spotlight when the financially crashing airlines found solace by focusing their efforts on the cargo operations, which comparatively flourished on the back of pharma, perishables and e-commerce transportation.
Under the ‘Atma Nirbhar Bharat’ initiative of the Government of India, domestic freighters in the country have increased from 8 to 28, a surge of almost 3.5 times. Going ahead, demand is expected to rise faster than passenger belly capacity growth,” Peri added.
While the company has pursued organic growth opportunities in the past, it is also looking at expansion via inorganic route.
“On the Cargo front, we are looking at emerging opportunities in new airports. While most would be pursued on our own, in few others we would work with partners,” Peri added.
In ground handling segment as well, the company is open to “meaningful” opportunities.
“We won the tender to provide BME (Bridge Mounted Equipment) services at Bangalore Airport and have already operationalized the same. We have also won the ground handling licence at the New Goa Airport and at Ahmedabad Airport,” Ramachandra said.
Bridge Mounted Equipment consists of external Pre-Conditioned Air units and Fixed Electrical Ground Power units. BME allows airlines to achieve safer, and more economical operations during ground time by keeping its auxiliary power switched off.
In continuation with the company’s inorganic growth strategy, Celebi is also eyeing Air India’s ground handling company Air India Air Transport Services and is expected to bid once the government invites applications.
Celebi was one of the first to show interest when the government proposed to put AIATS up for privatisation in 2019. If it is put up for sale by the Government, we shall definitely be interested,” Ramachandra added.
Air India’s ground handling unit Air India Air Transport Services Ltd is yet to be privatised and currently provides ground handling services at over 60 airports across the country.