South America and Africa boost IAG Cargo in tough Q1

IAG Cargo CEO Lynne Embleton

IAG Cargo managed to record an increase in airfreight traffic in the first quarter despite an overall market decline, although revenues for the period were down.

IAG’s cargo division saw cargo traffic increase by 2.6% year on year to 1.4bn cargo tonne kms, while revenues decreased by 0.4% on a year earlier to €275m. On a constant rate of exchange, revenues were 2.5% down on a year earlier.

Yield for the quarter was down by 5% at constant exchange and load factors would have been hit by a 4.8% increase in capacity. Sold cargo tonnes increased by 2.5% to 174,000 tonnes.

IAG Cargo chief executive Lynne Embleton said that traffic results were boosted by performance in South America and Africa.

Embleton said: “As expected, the international airfreight market has declined this quarter. A weak Asia Pacific market has been partially offset by strong performance from South America and Africa, helping us to steadily grow volumes. This change in regional mix has reduced our average yields.

“Our investment in premium products has continued. In February, we opened our Good Distribution Practice (GDP) certified Madrid Constant Climate Centre and, as a result, have already seen strong flows of pharmaceuticals to the burgeoning Latin American market including significant shipments of MMR and diphtheria vaccines. Meanwhile, at our London Heathrow hub, we have expanded our successful Critical Service Centre to now offer 24/7 round-the-clock support to our Critical customers on their highest priority, must-fly shipments.

“We have expanded the breadth of our network with the addition of our four times weekly services to Osaka, and now provide customers with three gateways into and out of Japan.

“As we continue to broaden our customer base, we have partnered with companies from outside the industry to provide new fully-integrated products directly to consumers. Partnering with Santa Fe Relocation, we are proud to have become the first air freight carrier to offer a simple and convenient home relocation service. Additionally, our new partnership with PetAir UK has helped simplify the world of pet travel.

“No doubt market conditions throughout 2019 will continue to be challenging, but our pipeline of products, digital services and operational investment will position us well to become the carrier of choice for customers worldwide.”

IAG Cargo Q1 2019