- Regional airlines are increasingly focusing on air cargo, especially high-value, time-sensitive shipments, to unlock markets in Tier-2 and Tier-3 cities.
- New carriers like FLY91, Alhind Air, Shankh Air, and Air Kerala are utilising regional airports to facilitate cargo movement, supporting local businesses and exports.
- Challenges such as limited aircraft belly space, infrastructure constraints at regional airports, and regulatory hurdles are being addressed to unlock the full potential of regional air cargo.
India’s aviation sector is undergoing a significant transformation driven by government initiatives aimed at expanding connectivity and fostering regional development. Among these, the Ude Desh ka Aam Nagrik (UDAN) scheme stands out as a flagship program designed to democratise air travel and support economic growth in underserved areas. The Union Budget 2025-26 has announced a substantial overhaul of UDAN, targeting the addition of 120 new airports and promising connectivity to over four crore passengers over the next decade. This strategic push aims to benefit middle-class families, boost tourism, and stimulate trade, especially in Tier-2 and Tier-3 cities, which have historically been underserved by air infrastructure.
A key component of this expansion is the growing role of regional airlines in air cargo logistics. Traditionally, larger airlines prioritised passenger services, with cargo transported mainly in the aircraft’s belly hold. However, increasing demand for rapid, safe, and reliable logistics—particularly for high-value, time-sensitive shipments—has opened new opportunities for regional carriers to develop dedicated or semi-dedicated cargo services. These airlines are emerging as vital players in connecting India’s economic peripheries with major urban centres, thereby fostering faster regional economic development.
In recent months, four new airlines have entered the market, signalling a positive shift in the domestic aviation landscape. Companies such as FLY91, Alhind Air, Shankh Air, and Air Kerala are deploying smaller aircraft like ATR 72-600s and Airbus A320s to facilitate both passenger and cargo movement. For instance, FLY91 operates over 150 weekly flights using ATR 72-600 aircraft, focusing on high-value, low-volume cargo such as electronics, medical supplies, and luxury goods. The limited belly space on ATR aircraft constrains cargo volume but is well-suited for urgent, high-priority shipments that demand rapid delivery.
Manoj Chacko, Managing Director and CEO of FLY91 emphasises the strategic importance of regional airlines in supporting India’s burgeoning economy. He notes that although cargo is not the primary revenue source currently, there is considerable potential in high-value, time-sensitive shipments such as pharmaceuticals, medical supplies, and e-commerce parcels. Chacko states, “While cargo is not our main focus now, we see strong value in leveraging our existing fleet to support niche markets, especially in Tier-2 and Tier-3 cities where logistics infrastructure is still developing.” He further highlights that regional airlines can bridge the gap between remote markets and national supply chains, providing the speed and flexibility needed for high-value cargo.
Other new entrants bolster this trend. Shankh Air, based in Lucknow, plans to operate from Noida International Airport (NIA) at Jewar, using Boeing 737-800NG aircraft suited for both passenger and cargo services. The airline aims to increase cargo capacity and provide vital logistics support for Uttar Pradesh and neighbouring regions. Its initial routes include connections from Noida to upcoming airports such as Bhogapuram, Pune, and Navi Mumbai, thereby expanding cargo links within Uttar Pradesh and beyond. Similarly, Air Kerala, backed by UAE investors, has chosen Kochi International Airport as its primary hub. With a fleet of ATR 72-600s scheduled to start operations, Air Kerala aims to strengthen Kerala’s connectivity and position the state as a regional aviation hub.
Despite these promising developments, operational challenges persist. The ATR 72-600, a popular aircraft for regional logistics, offers limited belly hold capacity—ranging from 1.8 to 2.5 tonnes depending on the configuration. While the Combi configuration allows for some cargo space (around 3 tonnes), the aircraft’s size inherently restricts the volume of cargo it can carry. Moreover, many regional airports lack the necessary infrastructure, such as cold storage facilities for perishables and adequate cargo handling equipment. Customs clearance processes at these smaller airports are often inefficient, leading to delays and increased costs—further hampering the potential of regional air cargo.
To address these challenges, industry experts advocate for integrated logistics solutions like the Unified Logistics Interface Platform (ULIP). ULIP aims to streamline customs procedures, improve cargo tracking, and enhance last-mile connectivity, thereby reducing delays and costs. The government’s Krishi UDAN 2.0 initiative, targeting agricultural cargo transport, is an important step but has faced mixed results so far. Strengthening infrastructure, improving regulatory frameworks, and deploying technological solutions are crucial to unlocking the full potential of regional air cargo services.
Underserved airports present strategic opportunities for establishing micro cargo hubs, which can facilitate last-mile delivery of essential goods. Manoj Chacko explains, “Locally positioned regional airports with growing commercial activity could serve as micro hubs for medical supplies, perishables, and e-commerce parcels. This approach can significantly reduce delivery times and enhance supply chain resilience, especially in remote areas.” These micro hubs can act as focal points for quick distribution, effectively bridging the logistical gap between producers and consumers.
The types of cargo suitable for regional airlines are carefully selected to match aircraft capabilities and market needs. High-value, time-sensitive shipments such as premium e-commerce products, pharmaceuticals, medical supplies, and emergency equipment are ideal candidates. These shipments benefit immensely from the speed and flexibility of regional air connectivity, particularly in areas where ground infrastructure is inadequate or unreliable. For example, medical supplies and pharmaceuticals often require rapid transit to ensure efficacy and safety, making air cargo an indispensable component of healthcare logistics.
Regional carriers like FLY91 are positioned to contribute significantly to India’s economic growth, rural development, and improved connectivity. Their operation in Tier-2 and Tier-3 cities can reduce logistical delays, open new markets for small businesses, and support local exports. Chacko concludes, “Regional airlines have a vital role in strengthening India’s air cargo network. By focusing on niche, high-value shipments and developing micro hubs at underserved airports, we can unlock substantial growth potential.”
However, operational hurdles remain. The absence of cold storage facilities further hampers the transport of perishables and pharmaceuticals. Developing regional logistics infrastructure—including specialised cargo handling facilities, cold storage, and streamlined customs procedures—is essential for expanding regional air cargo services.
Government initiatives like Krishi UDAN 2.0 aim to improve agricultural commodity transportation but have faced implementation challenges. Experts call for a comprehensive approach that combines technology platforms like ULIP, enhanced infrastructure, and clear regulatory policies to foster growth in regional cargo operations. Strengthening these areas will enable regional airlines to play a transformative role in India’s logistics landscape, especially in connecting remote areas to the national economy.
In conclusion, India’s aviation sector is poised for significant growth, driven by government policies, new airline entrants, and a focus on regional development. The expansion of regional airlines into cargo services offers enormous potential to improve logistics, support economic development, and integrate underserved regions into the national and global supply chains. Overcoming operational and infrastructural challenges through technological innovation and strategic planning will be key to realising this vision. The future of India’s regional air cargo network looks promising, with the potential to transform logistics and catalyse rural prosperity across the country.
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