Star Air, a regional airline based out of India has entered into an agreement with SpiceXpress for the management of belly cargo capacity. SpiceXpress is a dedicated cargo airline, operating a fleet of Boeing 737 freighters.
After this news came out in the market, the airline share surged by around 3 percent to reach Rs 67.35, the intraday high.
Star Air Partners with SpiceXpress
Ghidawat Group-backed airline, Star Air has entered into a contractual agreement with SpiceXpress for carrying cargo for a period of three years. Star Air is the largest regional airline in India connecting Tier-II and Tier-III cities. On the other hand, SpiceXpress is a freighter airline with a fleet of dedicated cargo aircraft. As per information from planespotters.net, the airline has a fleet of 3 Boeing 737-700 Converted Freighters. Two of these are active and one is parked. The airline is due to receive another Boeing 737 freighter, which is currently parked at Yichang, China.
As per the agreement signed between both airlines, SpiceXpress will manage the belly cargo of Star Air across its fleet comprising 9 aircraft. SpiceXpress will carry its cargo in the belly space of Star Air aircraft. With this agreement, SpiceXpress will expand its reach in the domestic cargo infrastructure. Star Air flies to destinations like Kishangarh, Kolhapur, Jamnagar, Jodhpur, Nagpur, etc. This network will help SpiceXpress diversify its cargo network from 39 to 48 destinations. Door-to-door delivery and postal services will be strengthened as well.
Jai Singh Sadana, Chief Business Officer at SpiceXpress said: For SpiceXpress, this collaboration with Star Air represents a critical turning point as we expand our domestic freight network. Our goal of bridging underserved areas is in line with the expanded reach of these nine locations. SpiceXpress now has access to more delivery locations and a higher daily freight volume thanks to the partnership. It will also improve “our last-mile presence.
Largest Regional Airline of India
Star Air currently has 8 aircraft in its fleet – 5 Embraer ERJ145 and 3 Embraer E175. The airline is scheduled to receive delivery of one more E175 in the coming future. In Farnborough International Airshow 2023, the airline extended its lease agreement with Nordic Aviation Capital from 2 E175 to 4.
India is considered as a graveyard for regional airlines. Running a regional airline here is not an easy job. The latest regional airline to get grounded in India was TruJet. Another airline backed by Sanjay Mandavia, FlyBig is also struggling the court. Its lessor along with a bank has filed a fraud case in Economic Offences Wing in Gurgaon for forgery of Rs 8 crore.
In such an environment, Star Air has exceptionally done well. Talking about exceptions, Star Air is the only scheduled airline operating a fleet of Embraer aircraft in India. It has 5 ERJ-145s and 3 ERJ-170. The airline signed a lease agreement with Nordic Aviation Capital for 4 E175s. These aircraft are former Belavia airframes and hence, Star Air has retained the Belavia cabin. As a result of this, these E175s have 12 Business class and 64 Economy Class seats onboard.
From its hub at Bengaluru Kempegowda International Airport and Belagavi, the airline operates to a total of 19 domestic destinations.
Differentiation of SpiceXpress
In August month of 2023, SpiceJet officially announced the differentiation of its cargo arm, SpiceXpress. Earlier, SpiceXpress was a subsidiary of SpiceJet. The balance sheets of both these airlines were mixed. During the pandemic, on the one hand, where SpiceXpress was making consistent profits, SpiceJet was losing money. As a result of this, the cargo arm was separated.
At the same time, lessor Carlyle Aviation Partners joined hands with SpiceJet’s Managing Director and onboarded SpiceJet as a shareholder. Carlyle currently holds a seven percent stake in SpiceJet. Both SpiceJet and Carlyle Aviation Partners are currently holding discussions regarding the strategies for the future of SpiceXpress.
SpiceJet is planning a network expansion, in which it will introduce flights to both Lakshadweep and Ayodhya in the coming future. Yesterday, the airline conducted the Annual General Meeting, in which plans were discussed for the usage of Rs 2,250 crore funding approved by shareholders. The airline will use the majority of this funding to grow its network and reduce its liabilities and dues.
Source: Republic World