FROM MAGAZINE: "AAICLAS will set a benchmark on ease of doing business index at AAI airports"
Realising the importance and growth of air cargo industry and its impact on Indian economy, Airport Authority of India (AAI) incorporated an integrated logistics network entity called AAI Cargo Logistics and Allied Services Company Limited (AAICLAS) last year. After almost a year of operations, AAICLAS has appointed Keku Bomi Gazder as its new CEO. With close to three decades of experience in airlines operations across the Middle East, South Asia and the Indian sub-continent region, Gazder is passionate about his new role. Gazder is positive and believes that AAICLAS will be benchmarked against the best in the world. In his new office at Safdarjung Airport, New Delhi where he joined a month ago, Gazder discusses with Rashmi Pradhan his plans and vision for AAICLAS. Edited excerpts.
As the new CEO of AAICLAS, what would be your key priorities? AAICLAS is a 100 percent subsidiary of AAI. The vision of Chairman of AAICLAS, Guruprasad Mohapatra and that of the Board at AAICLAS, is very clear. We will be focusing on cargo handling, security and documentation handling, supply chain, transshipment facility provider, airport free zones developer and project logistics. We would also work as multi-modal interface linking air, surface and water transport as well as connecting to hinterland points in India, thus, becoming the largest networked and fastest growing logistics solution provider in India. We are here to serve the trade and enable ease of doing business for our trade partners by providing them with a facility and service their products deserve. When a manufacturer tells his agent/forwarder/airline to use our airport/facility for his goods; that is what we want to achieve. Hence, we are in the business of creating a favourable environment to enhance and promote business at our airports. We want to grow our cargo business and increase its share from all the airports managed by AAI. This will involve us being disruptive in our current processes. We are also going to benchmark ourselves on best practices worldwide and on the ease of doing business index. Some of the questions I ask myself regularly are: Why would a businessman, forwarder, airline, integrator, manufacturer and various other stakeholders in the supply chain utilise our facilities? What is the best we can offer differently? What additional value are we bringing to the table? How can we act as an enabler to promote trade in the country? How can we make our airports move from handling cargo to a super hub for our airlines? These are my priorities to answer. This is 2017 and now we need to plan as where we want to reach by 2022. A five-year vision document with details on our verticals, a blueprint on how and where the company will go forward along with timelines is being currently worked on.
At the launch of AAICLAS, the Civil Aviation Secretary had mentioned that an annual turnover of Rs 380 crore is expected in two years; are you on track to achieve the targets? In the past 11 months, we have witnessed a positive development in the cargo movement at our airports. We are aiming to achieve the target in the next financial year. We are expecting the business to grow by 10-15 percent in the current financial year and over 20 percent in the next fiscal year. The mandate of AAICLAS is to focus on cargo and increase the cargo handled by our airports using best practices and world class technologies. We are mandated to perform all functions and explore opportunities that contribute to the growth of our airport related business. We will also take into consideration our meetings and discussions with various stakeholders in the government and the private sector to see the sectors that we need to focus on priority to grow in the next five years.
How can AAICLAS benefit from government’s UDAN scheme? There is a study that has been initiated to look at leveraging on government’s Regional Connectivity Scheme under UDAN – Ude Desh ka Aam Nagrik. The aircraft under this initiative are relatively small. We are exploring the opportunities to move certain specialised commodities through these aircraft. We are also leveraging these airports to be mini staging areas for our domestic businesses.
What major initiatives of AAICLAS are in the pipeline? AAICLAS, in accordance to the road-map prepared by AAI for the development of Common User Domestic Cargo Terminals (CUDCTs) at 24 AAI Airports, have been taking forward the air cargo movements at AAI airports in a phased manner and commissioned the cargo facilities during the FY 2016-17 at Ranchi, Goa, and Srinagar (interim) for Domestic Cargo; Indore and Bhubaneswar for international cargo and, Kolkata and Chennai for international courier.
AAICLAS is planning to launch CUDCTs during the FY 2017-18 at Pune (launched), Guwahati, Tirupati, Lucknow, Thiruvananthapuram, Varanasi, Amritsar, Srinagar, Vijayawada and to undertake international cargo handling operations at Pune, Jaipur, Aurangabad, Visakhapatnam, Madurai, Tiruchirappalli.
AAICLAS has taken the lead in the Ministry of Civil Aviation’s initiative of forming a National Air Cargo Community System (ACS), a single window system for uniform interface between all the stake holders of air cargo community using international standards; a common information technology platform connecting all the various stake holders to streamline country’s air cargo industry on one common platform.
Tell us about investments and marketing strategy. We will be heavily investing in our facilities, training and development of manpower. Although the figures cannot be disclosed at this moment, we will make a significant investment. A private organisation will do business where it is profitable. But for us as part of the government, it is our duty to facilitate the building of infrastructure even where there is less commercial viability keeping in mind its national obligations. The company would enter into strategic partnerships based on business demand at airports within the country and abroad. For the first time, we will be open to investment outside India. We will invest in airports and facilities worldwide. Our collective expertise and knowledge in managing domestic facilities for over five decades gives us a strong edge over other operators. In certain models at certain places we will invest in facilities and third parties will manage them whereas in some airports we will build the facilities and operate the facilities ourselves. We also have a strong mandate from the board to explore cargo handling and allied services abroad. On the marketing front, we will conduct roadshows and participate in exhibitions to promote our services. We will also meet various stakeholders in government and private sector to leverage on our strengths.
How will the implementation of GST affect the Indian air cargo industry? It’s a complete game changer. But we need to look at this in a broader spectrum. We are business enablers and with Goods and Services Tax (GST), the exporters of goods will have less burden of taxes since the place of consumption is overseas. This, in my view, will help make businesses more competitive in the international market perhaps even opening India to newer markets as well as export of more commodities resulting therefore in increased tonnage handling.