IAG Cargo revenue dips but cargo volumes grow

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British Airways Boeing 777-200
British Airways Boeing 777-200

IAG Cargo’s revenue dipped by 2.1 per cent in the first quarter of 2017, with volumes growing but capacity increasing at a higher rate.

Commercial revenue was €256 million ($279.6 million), a 2.1 per cent decrease at constant exchange, while cargo tonne kilometres (CTK) were up 3.6 per cent to 1.36 billion.

Capacity grew 12 per cent during the period and yield was down 5.5 per cent to 18.73 cents per CTK.

Chief financial officer, Lewis Girdwood describes the first quarter performance as “an encouraging start to the year”, with strong demand on Asia Pacific and North American routes.

He says demand from Asia Pacific grew due to sea freight constraints, saying: “With over 150 flights per week to and from 15 Asian destinations, we are well placed to work closely with our freight forwarding partners to help alleviate this pressure and ensure shippers’ supply chains remain uninterrupted.”

“Through the first quarter of the year we saw a 34 per cent rise in volumes from Europe to Asia Pacific when compared to the same period in 2016, with fashion, spare parts, fresh fish and leather goods performing particularly well.”

Girdwood says UK and European markets performed well, with strong North American demand from the perishables and aerospace sectors while Latin America struggled.

He says IAG Cargo is working on developing products, saying: “We are pleased with the development of our newest product, Critical, which has now surpassed 1000 shipments since its launch helping meet the demands of the emergency shipment market.”

For the second quarter, IAG Cargo will introduce a new website, and Girdwood says: “The second quarter of the year will see us introduce a new website for our customers, which will greatly simplify the way forwarders book airfreight with IAG Cargo. This will be accompanied by an enhanced proposition specifically for our smaller and medium-sized forwarders.”