First Flight, one of India’s leading domestic express companies, is eyeing acquisitions to fuel itsambitious growth strategy but is also open to a ‘strategic alliance’ with an international partner,
a top executive told CEP-Research.“We are the largest independent domestic company,” deputy managing director R.K. Saboo saidin an interview at the recent Asia Pacific Mail & Express conference in Singapore. “We areready to acquire a company. We are looking at companies in India and we have big domestic plans.”
Asked if a sale of the privately-owned company was an option, Saboo replied: “We are open togood ideas. (But) it would have to be a strategic alliance. We are not interested in becoming anIndian delivery agent.”
Established in 1986, First Flight now handles a daily average of 250,000 express shipmentsand is targeting turnover of $85 million in the 2006/07 business year. It claims about 8-9%domestic market share, and about 5% of the total Indian market.
The company, with a nationwide network of 751 branches and 8,000 employees, is aiming for 30%annual growth over the next five years, Saboo said. Its strategy centres on building up itsrecently-launched cargo flights and expanding its small road transport operations.
In the short-term, First Flight plans to expand its recently-launched air operations. Itsfirst two ATP freighters, with 8 tonnes freight capacity, are now connecting Mumbai, Delhi andChennai. The third ATP aircraft is due for delivery by November, and will be used to linkBangalore, Hyderabad and Ahmedabad into the growing air network. The company already has plans fora fourth freighter, and could later switch to larger cargo planes for trunk routes, leaving thesmaller ATPs to operate regional routes.
First Flight decided to launch its own flights to reduce dependence on commercial airlines. “Full passenger planes mean that express shipments are offloaded, so we could not always providesatisfactory service to customers. Our own network will give a better service to customers,” Sabooexplained. The express firm aims to carry about 80% of its volumes on its own freighters, fillingthe capacity to about 65-70%.
The road transport product “First Wheels”, which currently only generates a small proportionof revenues, will also be expanded so the company can offer “one stop” air and road expressservices. The fleet of 1,000 delivery vans and trucks will be expanded, and the road networkextended. First Flight also wants to offer logistics and supply chain services to its customers infuture.
