A new express airline, Deccan 360, has been launched in India as a venture of the two domesticairlines Air Deccan and Kingfisher Airlines to tap the untouched potential of the cargo and
logistics sector in the country.Deccan 360 will offer end-to-end express logistics services within India, and between Indiaand some international markets, starting with Hong Kong and Dubai. Initially flying twice a week,the cargo carrier will connect Dubai and Hong Kong with the Indian cities of New Delhi, Chennai andMumbai.
The company started international flights before beginning its domestic operations due to thelow local demand in view of the economic downturn, Deccan 360 said in a statement.
The new express airline launched its first flight between Delhi and Hong Kong last week withan Airbus A310 freighter capable of carrying 35 tonnes and plans to add two more A310s over thenext four months. By September, Deccan 360 expects to also operate six ATR-42s as feeder aircraftsto smaller Indian cities and to have its ground operations in place.
Founded in 2003 as the first Indian low cost, no-frills airline, Air Deccan was sold to itsrival Kingfisher Airlines in 2007. The venture has been set up with an initial investment of $25million by Air Deccan founder and the managing director of Deccan 360 Captain Gopinath.
“Some investors have, however, already shown interest in picking up a stake in the company,”Gopinath said but refused to name the investors. He explained that he was in talks with threestrategic investors—two from the US and one from Europe. Talks with a Singapore-based firm haveended because of the economic slowdown. “I am in talks, but we will wait for two-three months asoperations get started and investor confidence improves,” he said.
He reportedly received an onslaught of applications from potential franchisees, which willhave to invest in their own trucks and other ground handling infrastructure for their designatedservice areas, while operating with the Deccan 360 technology platform.
Gopinath added that the company would require another $25-30 million of working capital whichit plans to raise over the next six months to scale up its operations. Deccan 360 would be thefirst Indian company to function on the hub-and-spoke model for which it is developing facilitiesat multi-modal International Hub Airport at Nagpur (MIHAN), central India.
The idea is to “get operations started, have slots, infrastructure in place” to boostinvestor confidence in the company, Gopinath said.
“Our company will hire around 5,000 people in the next 3-4 years, directly or indirectly. Wehave started the hiring process,” he added. In the first phase, the company plans to appoint 100franchisees in the next three months with each franchisee hiring 10 people.
India’s domestic express logistics market is valued at about $700 million a year, comparedwith about $4 billion for China, but demand is expected to accelerate with economic growth.
