Challenging market conditions hits IAG Cargo’s revenue

IAG CARGO has blamed weak market conditions for its drop in revenue during the first quarter of this year. 
The freight arm of British Airways and Iberia revealed commercial revenue (flown revenue plus fuel surcharges) dropped to €250m from the €270m recorded during the same period in 2013. 
Although cargo tonne kilometres (CTKs) volumes roses by 0.5 per cent to 1,371 million in comparison with last year, capacity remained broadly flat and yields fell by 3.8 per cent.
Steve Gunning, chief executive at IAG Cargo, comments: “The first quarter results are consistent with the weak market conditions that continue to prevail. In such conditions, we continue to maintain our capacity discipline and resist taking business that does not make a positive contribution. 
“We are pleased that our load factor has shown a modest improvement especially as it was the final quarter of our wet-leased freighter programme.”
“From a network perspective, our newest route to Austin, Texas, is already proving to be highly successful with high load factors (88 per cent in the first three weeks) after only two months of operation. Capacity to Tel Aviv has been boosted by the introduction of wide-bodied aircraft, which supports Constant Climate our industry-leading pharmaceutical product.”
As part of a plan to extend its global reach, next generation aircraft, such as its new A380 super jumbo will operate on several key routes including Singapore and Hyderabad. The carrier’s new freighter programme with Qatar Airways got under way this month boasting “strong volumes’, says Gunning.  The long-term agreement with the Oneworld partner will see Qatar operate five B777F flights a week between Hong Kong and London on behalf of IAG Cargo. 
“We are already further developing this programme to expand the network reach,” adds Gunning. “We’ve also started the rapid roll-out of the electronic Consignment Security Declaration (known as eCSD) across our business. This is in addition to the continued implementation of our new revenue management system and eAWB. These initiatives are making good progress and enable our customers to do business with us more easily.
“With these developments and others in progress, IAG Cargo is moving forward with real momentum and we look ahead to the rest of the year with cautious optimism.”
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