IAG Cargo Records 28.4% Year-on-Year Drop in Commercial Revenues for 2023

IAG Cargo saw a steep drop in year on year commercial revenues in 2023 against a backdrop of sustained soft air cargo demand in the industry.

The cargo division of International Airlines Group (IAG) reported commercial revenues of €1.2bn for 2023, 28.4% down compared to 2022.

Cargo volumes, measured in cargo tonne kilometres (CTKs), were 17.2% higher than the previous year, as the Group’s airlines further restored their operations, leading to an increase in both passenger and cargo capacity.

Meanwhile cargo yields, measured as cargo revenue per cargo tonne kilometre, were impacted by the challenging market conditions.

Cargo yields were 38.9% lower than in 2022, “reflecting the substantial growth in global cargo capacity across the industry, together with softer market demand, reflecting the macroeconomic conditions”, noted IAG Cargo.

“In 2022, cargo yields had benefited from disruption to global supply chains, and disruption to shipping, particularly in the first half of the year,” pointed out IAG Cargo.

Revenues were, however, up 3.5% (€39m) from pre-pandemic levels in 2019.

“The increase was primarily driven by a 23.8% increase in cargo yields compared with 2019, which included the impact of transformation initiatives. The higher cargo yields more than compensated for a decline in volumes, which were 16.4% lower than in 2019, mainly due to weaker market demand and reduced cargo capacity, particularly from the Asia Pacific region,” said IAG Cargo.

In 2023, IAG Cargo continued to invest in services for long-term growth. One of the main focuses was improving its facilities, and the business opened a 10,000 m2 warehouse at its London-Heathrow hub, doubling its capability to handle premium shipments.

Additionally, the business completed itsinvestment in a perishable goods handling facility at its Madrid facility, increasing capacity for importing fresh produce into Europe.

IAG Cargo also completed the opening of additional pharmaceutical stations in Cincinnati and Cape Town, bringing the total number of its certified Constant Climate stations to just over 100 globally.

“Leveraging key partnerships remained a priority for the business, providing customers with the ability to link shipments across a range of carriers connecting into the IAG Cargo network,” said IAG Cargo.

David Shepherd, chief executive at IAG Cargo, commented: “Against a challenging macro-economic backdrop and unforeseen disruptions within the cargo industry, we remained laser-focused on future proofing our business through investing in premium products, upgrading facilities and upskilling our talented workforce. As a result, the business continues to perform well against pre-pandemic levels.

“My priority for the year ahead is to build on this momentum, improving how we deliver for customers whilst ensuring our people grow with us”.