IAG Cargo revenue down 28.5% YoY in H1

IAG Cargo , the cargo subsidiary of International Airlines Group , posted revenue of 603 million euros ($665.9 million) in the first half of 2023, a year-over-year decrease of 28.5%, the company reported during its earnings call today. However, the cargo division reported an 8.5% revenue increase in H1 compared with H1 2019, demonstrating a normalizing market despite weak demand and low volumes. IAG Cargo reported 2.2 cargo tonne kilometers in Q2, a 15% YoY increase. International Airlines Group (IAG), which includes Aer Lingus , British Airways , Iberia and, Vueling , posted a record Q2 operating profit (EBIT) of $1.3 billion, an increase of 70.5% YoY. IAG’s total reported revenue was $8.4 billion, about a 24% YoY increase. WHY IT MATTERS: Following a successful first quarter , IAG expected its profits to continue to climb with increased passenger demand during peak season, its leaders said during today’s earnings call. IAG Cargo, meanwhile, was expected to face challenges because of increased capacity and weakened demand, an industrywide trend in Q2. Despite this, IAG Cargo still saw an increase in airfreight volumes year over year. “While the operating environment has changed significantly in recent months, and the air cargo industry normalizes following the pandemic, our primary efforts in the first half of the year have been dedicated to implementing essential transformation,” IAG Cargo Chief Executive David Shepherd said in an earnings statement. WHAT THEY’RE SAYING: The first half of the year “saw substantial growth across North America, approaching pre-pandemic levels as IAG Cargo launched a new route between London and Cincinnati,” according to the company. This brings its total locations in North America to 29. “We’ve been focused on how we can increase efficiency as a business whilst better serving both our customers and colleagues,” Shepherd said. “We are already benefiting from the actions we are taking, all with the goal of cultivating a great place to work and building long-term customer loyalty. As a business, we remain well positioned to serve the industry that keeps the world’s economy moving.” MARKET REACTION: International Airlines Group ( NASDAQ: BABWF ) opened today at $1.99 per market share, a 5.9% increase from Thursday and closed at $2.03 per market share, an increase of 8%. FLASHBACK: IAG Cargo expanded its network coverage this year, resuming flights between London and Beijing and Shanghai. It also increased flights between Hong Kong and Japan. Company leaders placed emphasis on a normalizing market, allowing for growth and more investments into facilities, such as New Premia , a $110 million project that launched this year to expand and automate cargo facilities at London Heathrow Airport (LHR). “Investing in our facilities, operations and senior leadership team [ensures] that we are in a strong position to adapt to the changing market,” Shepherd said. “As well as opening our New Premia operation at Heathrow, we have focused on improving operational processes to make better use of our capacity.” Join Air Cargo Next for the second annual Air Cargo Tech Summit on Monday, Sept. 18, and Tuesday, Sept. 19, at the Brussels Marriott Hotel Grand Place in Belgium. For more information on the summit and to register, click here .

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