IAG Cargo reports cloudy 2018 results, continues cool-chain investments

United Kingdom-based IAG Cargo released its end-of-year results, which show it increased commercial revenue by about 7 percent to €1.2 million at constant currency in 2018, compared to 2017, but did not provide much information on its Q4 results or profit figures during the period. This doesn’t come as a surprise, as many industry members releasing their annual results experienced a less-lucrative peak season in 2018 than in recent years.

The carrier’s overall yield for the year was up about 8 percent at constant currency, and its sold tonnes barely changed from the previous year – up by less than half of 1 percent. Cargo tonne kilometer (CTK) volumes were down by about 1 percent, while it increased capacity by about 4 percent.

International Airlines Group (IAG) – the carrier’s parent company – released its 2018 results, which show the Group’s operating profits increased by about 19 percent during fourth quarter, year-over-year, to €655 million, and almost 10 percent over the full year.

While those strong figures were largely due to passenger business, the company said they were also driven by changing “unit cost ex-fuel trends,” which many carriers have mentioned were especially high mid-2018.

IAG took the opportunity to address the impending ax-drop of Brexit, which lies four weeks away, stating it is “confident that a comprehensive air transport agreement will be agreed between the E.U. and U.K. – as stated in the E.U./U.K. Political Declaration,” despite the fact that there is still no deal between the two regions regarding the details of new trade relations.

“We have done extensive contingency planning work for a no-deal scenario, covering all aspects of our business,” a statement from IAG Group read.

IAG Cargo said its network grew cargo capacity “on key routings into Latin America” as well as the addition of a London-to-Nashville route. It named pharmaceuticals, automotive and aviation parts, and beer as some increasingly common cargo being carried in its aircraft.

Temperature-sensitive cargo will continue to be a focus for the carrier, looking ahead. It has already invested in Good Distribution Practice (GDP) certification for its Constant Climate Centre in Madrid to address demand for pharmaceutical shipments to the South American market.

Lynne Embleton, CEO at IAG Cargo, foreshadowed that challenges the industry faced at the end of 2018 will likely continue. “2019 looks set to be a more challenging year, with airfreight capacity growth outpacing growth in demand,” she said.