During the first quarter, IAG Cargo experienced a 7.2-percent hit to commercial revenue, ending the period at 270 million euros ($351.1 million).
Cargo volume declined by 8 percent, year over year, to 1.36 billion tons on a 1.7-percent decrease in capacity. Yield, however, rose by 0.8 percent, year over year.
Officials blamed weak market conditions, especially on IAG’s sluggish North American trade lane, and industrial action at Iberia earlier in the year for the poor load factors.
Much of the poor performance on IAG Cargo’s transatlantic lane comes from overcapacity due to high passenger demand. The success of passenger routings to and from the United States, and the introduction of larger passenger planes with bigger cargo holds means the cargo business suffers a little at the hands of the passenger side.
“We have a huge amount of our capacity on the transatlantic,” Steve Gunning, IAG Cargo’s managing director, told American Shipper
earlier this week. “The passenger business, one of its key routes is the New York to London.”
But Gunning allows that the current cargo climate has been tough for everyone and most airlines are struggling.
“Demand has been relatively soft in the first couple of months of the year,” he said, “and I think we’ve seen that ourselves, and we’ve seen that with our competitors.” - Jon Ross