United

IAG Cargo reports 2016 revenue fall, promises digitisation innovations

Latest News
Friday, 24 February 2017

Europe’s IAG Cargo has reported commercial revenue of EUR1022 million over the period 01 January to  31 December 2016, a decrease of 6.6 per cent on 2015. Adjusting the prior year's figures to reflect a directly comparable operation, 2016 commercial revenue decreased eight per cent.

 

The competitive trading environment of 2015 continued into 2016 and on a like for like[1] basis, overall yield for the year was down 9.3 per cent on 2015. Volumes were up three per cent, while capacity grew by 10.5 per cent, partially reflecting the integration of the Aer Lingus network. 

Commenting on the results Drew Crawley, chief executive at IAG Cargo (pictured) said: “These are resilient results in the face of challenging market conditions. Growing supply from freighter and new generation passenger fleets have continued to outstrip flat demand for general freight. Our focus on aggressive cost management combined with premium product growth has enabled us to offset some yield pressure and grow our revenue share of the market this year.

 “While there was a robust start to 2016, the second and third quarter suffered from diminishing demand, leading to significant yield pressures. The final peak months of the year brought some improvement, driven by stronger-than-expected consumer sales in December and a high demand for last minute e-commerce products. 

“Our new ‘Critical’ product performed well during the peak, processing over 600 emergency shipments. More broadly our premium product mix now sits at 20 per cent, with our  Constant Climate product continuing to see significant volume growth year on year, shipping over 40,000 consignments in 2016. 

“The integration of Aer Lingus into IAG has added further breadth to our network as well as opening new markets to Irish industries such as the growing pharmaceutical sector. We have also continued to invest to provide our customers with a strong network offering, and in 2016, IAG Cargo launched several  destinations: Lima, San Juan, San Jose (California), San Jose (Costa Rica) and Tehran; and confirmed the launch of Santiago, New Orleans, Fort Lauderdale and Oakland for 2017. 

“We will continue to invest in our infrastructure and our technology through 2017 to make our operation as efficient as possible.   In addition to the continued development of our new Premia building we will be implementing a new warehouse management system that will transform the way freight is processed through our premium operation.

“Our strategy is being developed to embrace the digital disruption in our industry. We believe digitisation will play a significant role in shaping our industry in the coming years and we recognise the benefits this can bring in relation to costs and improving customer experience. Throughout 2017 we will introduce a number of  innovations to help drive forward the digitisation of cargo and improve our customers shipping experience."                  

[1] Excluding Aer Lingus in Q1, and at constant FX

HACTL
Cathay Cargo
United

IAG Cargo reports 2016 revenue fall, promises digitisation innovations

Latest News
Friday, 24 February 2017

Europe’s IAG Cargo has reported commercial revenue of EUR1022 million over the period 01 January to  31 December 2016, a decrease of 6.6 per cent on 2015. Adjusting the prior year's figures to reflect a directly comparable operation, 2016 commercial revenue decreased eight per cent.

 

The competitive trading environment of 2015 continued into 2016 and on a like for like[1] basis, overall yield for the year was down 9.3 per cent on 2015. Volumes were up three per cent, while capacity grew by 10.5 per cent, partially reflecting the integration of the Aer Lingus network. 

Commenting on the results Drew Crawley, chief executive at IAG Cargo (pictured) said: “These are resilient results in the face of challenging market conditions. Growing supply from freighter and new generation passenger fleets have continued to outstrip flat demand for general freight. Our focus on aggressive cost management combined with premium product growth has enabled us to offset some yield pressure and grow our revenue share of the market this year.

 “While there was a robust start to 2016, the second and third quarter suffered from diminishing demand, leading to significant yield pressures. The final peak months of the year brought some improvement, driven by stronger-than-expected consumer sales in December and a high demand for last minute e-commerce products. 

“Our new ‘Critical’ product performed well during the peak, processing over 600 emergency shipments. More broadly our premium product mix now sits at 20 per cent, with our  Constant Climate product continuing to see significant volume growth year on year, shipping over 40,000 consignments in 2016. 

“The integration of Aer Lingus into IAG has added further breadth to our network as well as opening new markets to Irish industries such as the growing pharmaceutical sector. We have also continued to invest to provide our customers with a strong network offering, and in 2016, IAG Cargo launched several  destinations: Lima, San Juan, San Jose (California), San Jose (Costa Rica) and Tehran; and confirmed the launch of Santiago, New Orleans, Fort Lauderdale and Oakland for 2017. 

“We will continue to invest in our infrastructure and our technology through 2017 to make our operation as efficient as possible.   In addition to the continued development of our new Premia building we will be implementing a new warehouse management system that will transform the way freight is processed through our premium operation.

“Our strategy is being developed to embrace the digital disruption in our industry. We believe digitisation will play a significant role in shaping our industry in the coming years and we recognise the benefits this can bring in relation to costs and improving customer experience. Throughout 2017 we will introduce a number of  innovations to help drive forward the digitisation of cargo and improve our customers shipping experience."                  

[1] Excluding Aer Lingus in Q1, and at constant FX

HACTL
Cathay Cargo
HACTL
Cathay Cargo