Volume up, dollars down as IAG faces ‘challenging market conditions’

IAG Cargo’s 2016 full-year results out today show commercial revenue down 6.6 percent to €1.022 billion. “These are resilient results in the face of challenging market conditions,” said Drew Crawley, CEO at IAG Cargo. “Growing supply from freighter and new-generation passenger fleets have continued to outstrip flat demand for general freight.”

The carrier will focus on cost management and its premium products to offset yield pressure and grow its revenue in the year ahead, Crawley said.

Freight tonne kilometers (FTK) rose 3 percent, to 5.4 billion, while cargo revenue per FTK, fell 9.3 percent to €18.74. In the context of decreased revenue, the results suggest that more volume is moving at lower prices. However, since the carrier doesn’t release operating profits, this data doesn’t measure the health of the company’s freight operations. IAG also moves significant volume on Qatar Cargo freighters.

Crawley noted that falling demand over the second and third quarter placed downward pressure on yields. “The final peak months of the year brought some improvement, driven by stronger-than-expected consumer sales in December and a high demand for last-minute e-commerce products,” he said.

IAG’s new “Critical” product was a strong performer in 2016, processing more than 600 emergency shipments. In a statement, Crawley said that IAG’s premium product mix was 20 percent, with the Constant Climate product registering “significant volume” growth, year-over-year, shipping over 40,000 consignments in 2016.

IAG is also hoping to capitalize on the digital disruption trend in air cargo. The carrier is responding with “a number of new innovations to help drive forward the digitization of cargo and improve our customers shipping experience,” but did not elaborate.

Those interested in learning more about airfreight in 2017, should join us at Cargo Facts Asia in Shanghai, 25 – 26 April.  To register, or for more information, go to CargoFactsAsia.com