IAG Cargo Q3 volumes up but revenues and yields down

IAG Cargo saw third quarter 2016 commercial revenues fall by 7% to €240m compared with the like period 2015.
Adjusting the prior year’s figures to reflect a directly comparable operation, commercial revenue decreased 6.5% versus last year at constant exchange.
The airfreight arm of British Airways, Iberia, Vueling and Aer Lingus saw “challenging market conditions continue” in the quarter with IAG Cargo’s volumes on a like for like basis up 4.5%, while yields decreased 10.5% at constant exchange.
In the nine months to the end of September, IAG group cargo revenues fell by 6.9% to €743m, or down by 9.4% excluding Aer Lingus and currency effects.
In the same January to September 2016 period, the amount of freight carried fell by 15% to 543,000 tonnes while volumes measured in cargo tonne kilometres were up by 3%. Cargo revenue per CTK in € cents fell by 9.6% to 18.64 cents.
Drew Crawley, IAG Cargo chief executive, commented: “We have spoken about the choices our business has made to stay at the forefront of our industry, exiting from our own fleet of freighters, focusing on premium products and partnerships with other world class airfreight businesses. It is this that has enabled us to offset some of the yield pressures and grow our revenue share in these challenging market conditions.
“Our commitment to develop premium products and customer experience was further reinforced last month, when we announced a £55m investment in a new premium facility at London Heathrow. On October 3 we also launched a new emergency solutions product, Critical, which has already been well received by customers across our network.
Crawley added: “We have also continued to launch new routes this quarter. Tehran commenced operation on September 1, and just last week we announced a new service to New Orleans, making us the first carrier to directly connect London to Louisiana.
“In October, I was also pleased to help launch the IAG global accelerator programme, Hangar 51, an initiative that will find and scale some of the best aviation and logistics tech start-ups who will help us digitise our business processes to speed up and simplify our business. This is something the cargo industry has long overlooked and I am excited to see how we can make IAG Cargo a leader in this area. 
“The IAG Cargo platform, alongside our partnerships and premium focus, place us in a strong position to compete effectively in the current market.”
In 2016, IAG Group reviewed and amended the reporting of individual line items in the consolidated income statement to better reflect the nature of underlying transactions and improve comparability between reporting periods.
As a result, for the nine months to September 30, 2015, revenue of €80m previously reported as other revenue has been reclassified to passenger revenue (€25m) and cargo revenue (€55m).