British Airways: Cargo industry should cut capacity
The air cargo industry should cut capacity, following a marked decline in air cargo volumes from December through the end of March, said British Airways World Cargo's chief.
While his company has 'seen some stabilization over the past couple of months, Steve Gunning, managing director, BA World Cargo said 'there are no signs of an imminent recovery. The major challenge we now face across a number of markets is the imbalance between capacity and demand, which has led to unsustainable price pressures. The industry clearly needs to reduce capacity to better align with demand if it is to achieve a sustainable equilibrium.'
Gunning made his remarks as BA World Cargo reported results for its past fiscal year. Commercial revenue (flown revenue plus fuel surcharges) increased 9.4 percent to '673 million ($1.07 billion) for the full year ending March 31. Excluding the impact of exchange rate movements, commercial revenue was up 1.1 percent.
Volume fell 5.2 percent to 4.6 billion cargo ton kilometers (CTKs) for the full year. Cargo capacity for the same period fell 5.1 percent.
Overall yield (commercial revenue per CTK) increased 15.4 percent, driven by higher levels of fuel surcharge. Excluding the impact of exchange rate movements, yield increased by 6.6 percent.
The fourth quarter in particular saw a 15.5 percent drop in volume, the largest quarterly volume decline on record.
Sean Doyle, financial controller, BA World Cargo, said, 'Demand for cargo was strong for the first half of the year, underpinned by excellent operational performance through our London Heathrow hub. As the global crisis hit in the second half of the year, demand for general freight declined significantly across key export markets including the Far East and Northern Europe, though our premium volumes were hit less hard. While general freight volumes fell less dramatically out of the U.S., U.K. and Indian markets, yields continued to drop due to declining fuel surcharges and industry overcapacity.'
British Airways: Cargo industry should cut capacity
