IAG Cargo revenues drop 12% in Q2 2016

The airfreight carrier reported commercial revenues of 241 million euros for the quarter, a 12 percent decrease from second quarter 2015, according to the company’s most recent financial statements.    IAG Cargo saw revenues in the second quarter drop 12 percent to 241 million euros (U.S. $269.3 million) for the quarter, a 12 percent decrease from second quarter 2015, according to the company’s most recent financial statements.
   The airfreight carrier, which was created following the merger of British Airways World Cargo and Iberia Cargo in April 2011, did not disclose figures for net profit/loss or earnings per share from cargo operations.
   IAG Cargo attributed the decline in quarterly revenues to continued challenging market conditions, noting that on a like-for-like basis IAG Cargo’s volumes were flat, while yields decreased 13.4 percent at constant exchange rates.
   Drew Crawley, chief executive officer at IAG Cargo, said more competitive trading conditions in 2016 and excess capacity are putting downward pressures on rates.
   “Flat demand for consolidated general cargo and excessive freighter capacity in the industry is causing supply to continually outstrip demand,” he noted. “These challenges are not solely restricted to airfreight, with increasing competition and capacity coming from road, rail and sea freight, exerting significant price pressures. These challenges are not new and despite these conditions, we have grown our revenue share.
   “We continue to concentrate on the growth of our premium products, strong cost control and precision management of our capacity and yields,” added Crawley. “Despite the weak demand for general cargo, our premium products are consistently seeing strong tonnage growth and we are further investing in our premium portfolio.”
   Crawley also noted how the company’s recent addition of the former Aer Lingus network, along with its continued partnerships and interline agreements with Finnair and Qatar Airways, have allowed IAG Cargo to expand its reach considerably.
   “We have successfully launched several new South American routes this year, which are proving to be strong cargo destinations,” he said. “These routes have been well received by our customers, with volumes being driven from pharmaceutical and perishable sectors in particular. Our new Madrid to Shanghai service commenced last month and we will also be adding several new routes to our network, such as, London to Santiago, as well as Madrid to both Tokyo and Johannesburg.”
   A subsidiary of International Airlines Group, IAG Cargo offers airfreight service to a network of over 350 destinations worldwide from its two global hubs at London Heathrow and Madrid-Barajas Airport.