Blue Dart to replace Boeing 737 with 757

News Clip : Business Standard, Mumbai

16th March, 2008.

Move will help the company increase its carrying capacity without increasing fleet size

The Chennai - based air cargo company, Blue Dart Aviation, has decided to replace all its four ageing Boeing 737 cargo aircrafts with the Boeing 757. The move is primarily aimed at augmenting carrying capacity without increasing the current fleet size of seven.

Last year, the company inducted a 757 freight carrier, which was its seventh from DHL Expresses' European Air Transport. DHL Express press holds 81 per cent stake in Blue Dart.

Tushar Jani, chairman. Blue Dart Aviation, said, "We cannot increase our fleet size because of lack of parking space at airports and hence will replace the Boeing 737 with Boeing 757."

The company intends to have a mix of leased and owned 757 -200 SF (special freighters). At present, the cost of a Boeing 757-200 SF (special freighters) is about $80-85 million.

The BSE-listed company will raise the entire amount through internal accruals. It posted a growth of 21 per cent in gross revenues at Rs 811 crore during the year-ended December 31, 2007 as compared with Rs 668 crore in the previous year.

The replacement of aircrafts will help the company increase its carrying capacity by 32 per cent from 148 tonnes to196 tonnes by the end of 2011.

A Boeing 737 carries 16 tonne of freight whereas a 757 has the capacity of 28 tonne.

The replacement initiative comes at a time when the company is optimistic about starting scheduled overseas operations, perhaps this year. Company executives said the move would help improving aircraft utilisation due to increased flying hours. The company currently is evaluating commercial viability of flying to overseas destinations.

Blue Dart is working closely with parent DHL Global Aviation group to check if its aircraft can be leveraged for international operation. Overseas operations could start in countries bordering India as well as in the south east.

However, insufficient infrastructure support at airports is proving to be the biggest hurdle in expanding operations.

"The crowded airports in India cannot handle any more aircrafts and it does not make sense to just increase fleet size without adequate support," said Jani.

Blue Dart, the only jet express airline in India, is currently the leader in the domestic market, specialising in time-definite scheduled freight services for overnight next day delivery of express and cargo loads.