IAG Cargo’s 2013 performance is satisfactory
IAG Cargo’s 2013 full year results, reported commercial revenue of €1,073 million for the period January 1 to December 31, 2013, a decrease of 11.8 percent on 2012. Commenting on the results, Steve Gunning, CEO, IAG Cargo, said, “With challenging conditions, the results are broadly in line with our expectations. I think we managed our yield well. Given the market conditions, a 2.3 percent decline in yield is satisfactory.”Among other factors like weak demand and excess capacity in the market, exchange rate fluctuations too had a significant impact on IAG Cargo revenues and yield.
Volumes of5,653 million cargo tonnekilometres (CTKs) for the year represent a decrease of seven percent on 2012. Overall yield (commercial revenue per CTK) for the year decreased by 5.2 percent versus 2012.
The Europe-LATAM route proved to be imperative to the carrier’s business performance. “It is a key part of our network. Our market share has grown to over20 percent [LS1] which we continue to pursue,” said Gunning. Notably, IAG also strengthened its position last year in the Indian sub-continent with markets like Hyderabad and Sri Lanka. As for Africa, the region may not have contributed significantly to IAG’s business but it is an important region. “We have grown our market share out of Africa in 2013 and it is going in the right direction.”
Recently, IAG Cargo signed a long-term commercial agreement to purchase capacity on Qatar Airways-operated air cargo freighters. Referring to it as an exciting development, Gunning said, “Maintaining key freight lanes along with capacity discipline is key. It’s cost-effective and a big decision for us. The way to go forward is joining networks and sharing capacity.”Starting May 1st, Qatar Airways will operate five 777F flights a week between Hong Kong and London, via Doha, on behalf of IAG Cargo, strengthening the Asia-Pacific network.
Going by the present market conditions that are less likely to show improvement, Gunning said, “The market needs to reach equilibrium between supply and demand. Hence, it is important to make sure that the existing capacity is utilised well.”Looking forward to this year, Gunning added, “I don’t think 2014 will be any different. We will continue to invest in infrastructure and be well positioned for the year. Our focus will be driven more by pharmaceuticals and express products, at the same timeright service levels and cost-efficiency are also key.”