Kingfisher Airlines has tied up with logistics player Bax Global, recently taken over by Deutsche Bahn AG.
According to an industry source, the arrangement between the two companies envisages Bax helping Kingfisher with setting up the logistics infrastructure for the latter's cargo initiative.
At a later stage, the two may work together in the international arena. Sources in Kingfisher confirmed the development.
Meanwhile, Kingfisher is in talks with TNT, a global player in the mail, express and logistics spaces, to consider utilising each other's resources. TNT, which launched its services in India has planned capex of euro100 million over five years.
TNT, sources said, may consider using Kingfisher aircraft to transport cargo, while the latter would benefit from TNT's extensive road network.
Again, the two firms could also be partners in the international market. The discussions are at a preliminary stage, according to sources.
However, a senior Kingfisher Airlines executive declined to comment.
With regards to Bax Global tie-up, it will help Kingfisher set up warehouses and IT systems. Schenker, the logistics subsidiary of Deutsche Bahn, which has expertise in setting up warehouses, the use of electronic tracking devices and other fields of logistics, would also assist Kingfisher with creating the domestic infrastructure.
Kingfisher, which plans to roll out its full-fledged cargo operations -- King Cargo -- sometime in mid-August this year, plans to invest between Rs 60 (Rs 600 million) to Rs 65 crore (Rs 650 million) in the venture.
Initially, it would offer airport-to-airport services and may consider a fully integrated product -- door to door deliveries. In the first phase it would utilise the belly space available in its fleet and will purchase aircraft for cargo transportation.
"The management believes it will be able to price its services 30 per cent lower than those of integrators. However, the pricing would be at par with that of other airlines, the company's value proposition being its ability to deliver the goods in less time," Kingfisher sources said.
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