Air India had dedicated cargo operations to the US till 1996. These were discontinued due to operational reasons. No Indian company currently offers dedicated freighter operations. But international majors including Fedex, UPS, DHL, Lufthansa Cargo, Sri Lankan Cargo and Cathay Pacific are present in India.

The carrier will use five converted Boeing B737 aircraft owned by Indian Airlines, post-merger, to service the domestic cargo market. Only Blue Dart Aviation and First Flight offer dedicated cargo airline services.

Initially, Air India Cargo will operate to the Gulf and the European destinations from Mumbai, Chennai and Bangalore. Mumbai will be the operational hub for wide-bodied aircraft, while narrow -bodied aircraft (B737s) will be operated out of Nagpur.

"Air India Cargo, through its medium-haul flights, will connect Damam, Paris and Frankfurt. The cargoes across the country will be aggregated in Nagpur and international cargo will later be ferried to Mumbai for global destinations. We will be connecting more international destinations and will be having more aircraft on our fleet," said Vasudevan Thulasidas, chairman and managing director, Air India.

Air India Cargo will convert six Airbus A310 aircraft into freighters at an estimated cost of $6-$7 million each. The aerospace major, European Aeronautic Defense & Space Company (EADS) is converting passenger airplanes to freighters for Air India.

Air India Cargo's global operations will be followed by Hyderabad-based Flyington Freighters, which is planning to start operations by early July with two leased Airbus cargo planes.

Flyington Freighters, promoted by the Reddy family, the promoters of Deccan Chronicle and retail chain Odyssey, has confirmed orders with European airplane maker Airbus for six A330-200F freighters, at a cost of $175 million apiece.