UK remains strong despite weak start to 2016

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British Airways and Iberia aircraft at Heathrow Airport

The slowdown of the UK manufacturing sector has made business challenging and Brexit may compound this, but IAG Cargo tells Air Cargo Week it is still one of the best connected economies in the world.

The airline group, which owns Aer Lingus, British Airways, Iberia and Vueling, says the end of 2015 saw a slowdown, which continued into the start of this year, with oil and gas proving slow but premium products growing.

IAG Cargo says: “The first quarter of 2015 benefited from the port congestion on the US west coast which resulted in modal shift from sea to air freight.  However, we saw the market soften in the final quarter of the year and the pre-Christmas surge in demand was down on previous years.”

It adds: “While in 2016 we have witnessed a decline in the oil and gas sector due to the reduction in the number of new exploration projects, there is still strong demand for premium products with perishable and retail demand in particular continuing to hold steady.”

UK manufacturing has had a weak start to the year, which IAG Cargo says explains the softer export market in the first quarter, but it will focus on the premium products. “This year we will continue to focus on key commodity sectors such as pharmaceutical, aerospace, perishable and fashion retail. Some of our new routes to Latin America will undoubtedly prove beneficial for these key sectors.”

This year, IAG Cargo has launched Latin American services including to Peru’s capital, Lima, flying from Gatwick Airport and San Jose – Heathrow flights, operated by British Airways.

The airline says: “The new services have had a good start, particularly San Jose and Lima. The Lima route is proving to be popular across our global network, with pharmaceuticals being one of the major contributing commodities. We are also seeing a strong interest in our new JFK service ex Gatwick.”

In addition, IAG Cargo will be increasing capacity to the Middle East by delinking Bahrain to Doha and Abu Dhabi to Muscat, making them all direct flights. It says this will increase Middle Eastern operations by 20 per cent and 80 per cent to the four destinations.

“We will be able to accommodate the growing demand in the Middle East with the capacity added by delinking our Bahrain to Doha and Abu Dhabi to Muscat routes and replacing them with direct flights to all four destinations.”

IAG Cargo says wherever it is operating in the world; investment in people and facilities is vital for delivering customer service. Using pharmaceuticals as an example, it says: “We have made significant investments in personnel, training and infrastructure at our London hub and across the globe to ensure that we deliver the high level of specialist service required when handling high value and sensitive goods.”

All 110 of IAG Cargo’s Constant Climate stations are Quality Approved, audited and meet International Air Transport Association Chapter 17 regulations as well as being Good Distribution Practices compliant.

IAG Cargo also says: “Our London Heathrow hub was the first air cargo airside hub worldwide to receive Wholesale Distribution Authorisation (WDA) and Good Distribution Certification (GDP) from a National Standards Regulatory Authority (The UK MHRA).  It’s this level of investment that will ensure the UK remains competitive with other markets.”