IAG Cargo Q1 revenues down, but load factors up
30 / 04 / 2015
IAG Cargo reported a 2015 first-quarter decline in revenues of just over one per cent on the back of a capacity reduction programme and a resultant volume decrease.
During the first three months of the year, the British Airways and Iberia cargo division saw revenues decline by 1.6 per cent on last year to €246m.
The revenue decline came as a capacity reduction of eight per cent resulted in a decline in volumes of 4.2 per cent year on year to 1.3bn cargo tonne kilometres and a 3.1 per cent slip in cargo carried to 218,000 tonnes.
Last year it announced it would terminate its agreement with Global Supply Systems (GSS) to lease three B747-8Fs, opting instead from May 2014 to purchase capacity on Qatar Airways-operated B777Fs between Hong Kong and London-Stansted.
IAG Cargo also reported a two point improvement in load factor and a 2.7 per cent improvement in yield.
Cargo revenue per CTK for the first three months also increased on last year, jumping 2.7% on year to €18.72.
The performance was welcomed by IAG Cargo chief executive Steve Gunning.
He said: “It’s been a strong start to the year: load factors and yields are up.
“Our decision to address capacity discipline head-on has proven to be the right one. Underpinning our commitment to sensible capacity management is a focus on utilising our substantial bellyhold network while providing freighter services on key routes like Hong Kong to London.
“Throughout 2015 we will continue to explore ways to expand our network with asset light solutions.
“While this has been a good start to 2015 there is no room for complacency.
“It is more important than ever that we continue to exercise strict capacity discipline, invest in operational excellence and further enhance our premium product offering to address the core needs of our customers and our businesses.”
While Gunning is happy with the cargo division’s performance, the decision to terminate its freighter business has drawn some criticism.
Lufthansa Cargo chief executive Peter Gerber said the decision had spooked the air cargo market.
While revenues were down at the cargo division, the overall IAG Group recorded a 12 per cent year on year increase in revenues to €4.7bn but a loss after tax of €26m.
However, the London Stock Exchange-listed company did report a first-quarter operating profit for the first time of €25m, compared with a €150m operating loss last year.
It said that the first quarter was traditionally the weakest period of the year.
The group also benefited from a reduction in fuel costs of 4.5% to €2.35 per ASK.