IAG Cargo enjoys ‘strong growth’ in third quarter
27 / 10 / 2017
IAG Cargo’s 2017 third quarter results saw airfreight’s commercial revenue reach €259m, a 10.2% increase over the same July-September period in 2016 when measured at constant exchange rates.
The carrier – which includes British Airways, Iberia, Aer Lingus and Vueling – saw its cargo yield for the quarter up by 2.4% at constant exchange rates while traffic rose by 7.7%, measured in cargo tonne kilometres (CTKs).
Capacity rose by 3.8% year on year, so there was also an improvement in the cargo load factor.
Lewis Girdwood, IAG Cargo’s chief financial officer, observed: “This quarter we have continued to see strong growth as demand grew faster than capacity.
"The upswing in the market over the course of 2017 is encouraging as we approach the peak and year end.
“These results have been largely driven by demand from Asia-Pacific, which has continued to deliver strong volumes following a positive second quarter."
“The ocean congestion between China and Europe continues to be a driver for the region’s success and we have seen high demand for machinery, auto-parts and industrial goods on this route.
“Our time-sensitive products Prioritise and Critical have supported customer demand in the region, ensuring guaranteed delivery of parts.”
Elsewhere: “Other key markets across our network have performed in line with the uptick in global air freight performance, with exports out of Europe growing in all directions which has complemented our network well.
“As we enter the final months of the year we have ensured that we are well prepared for the peak season so we can continue to deliver for our customers over the busiest time in the air cargo calendar.”
IAG Group’s third-quarter operating profit totalled €1.5bn before exceptional items, compared to €1.2bn in the year-earlier period.
Willie Walsh, IAG’s chief executive, commented: “We’re reporting another strong quarter with an operating profit up 20.7%.
“All our companies performed well. Our commercial performance was good despite underlying disruption from severe weather and terrorism. IAG Cargo improved in the quarter due to stronger Asia Pacific demand compared to last year.”
Over the first nine months of this year, IAG Cargo made €775m in revenue (before exceptional items), up by 4.3% on the €743m made in the same period of 2016 (5% at constant currency rates).
IAG Cargo flew a total of 4.2bn CTKs over that period, up by 5.9% over the figure of 4bn CTK flown in the same period of 2016. However, at 498,000 tonnes, freight volumes flown were down by 8.3% on the same period of 2016.
Despite trading conditions remaining challenging in many regions, the cargo-related result benefited from a stronger performance in the Asia Pacific region following a weak performance in the same period last year, IAG noted.