IAG Cargo reports “positive” third quarter
25 / 02 / 2015
IAG Cargo has reported a “positive third quarter”, with "good load factor improvements" across markets despite an increase in capacity.
The cargo arm of British Airways and Spanish carrier Iberia saw third quarter 2014 unadjusted commercial revenue (flown revenue plus fuel surcharges) fall 7.8 per cent to €236m versus €256m for the same three month period last year.
However, on a like for like basis reflecting a comparable freighter operation, IAG Cargo reported a 7.6 per cent rise in commercial revenue versus the three months to end of September 2013.
IAG Cargo terminated its agreement with Global Supply Systems (GSS), under which it leased three B747-8Fs, at the end of April this year. IAG Cargo then signed a long term commitment from May to purchase capacity on Qatar Airways-operated B777Fs, operating five flights a week between Hong Kong and London-Stansted.
As a result of the Qatar Airways deal, IAG Cargo reported cargo tonne km (CTKs) of 1,331m for third quarter 2014 – a like for like increase of 12.0 per cent. Third quarter freight volumes were down 3.5 percent at 219,000 tonnes, versus 227,000 tonnes in 2013 Q3.
Adjusted like for like capacity rose 4.1 per cent in Q3, but overall yield (commercial revenue per CTK) for the quarter fell 3.0 per cent, like for like at constant exchange rates.
For the nine months ended September 2014, IAG group cargo revenue was down 9.2 per cent to €724m, while actual cargo tonnes carried fell 3.4 per cent to 660,000,versus 683,000 in 2013.
Steve Gunning, chief executive at IAG Cargo, commented: “This is a positive third quarter for the business and we’ve seen good load factor improvements across markets, despite an increase in capacity.
“The strong performance of our premium products has offset continued underlying price pressure, particularly in the North American market, with Constant Climate, our market leading product for temperature sensitive freight, delivering impressive volumes.
He continued: “While we have seen a decrease in yield, this is primarily due to flying increased sector lengths. More generally, while trading is good, there are still fundamental issues with the market in terms of excess capacity.”
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