Bruce Barnard, Special Correspondent | Nov 04, 2011 8:40AM EDT
International Airlines Group’s cargo revenue was flat at $395 million in the third quarter, as the Anglo-Spanish carrier’s traffic stalled and yields declined in a sharply deteriorating global air freight market.
Third quarter revenue at IAG, formed by the merger of British Airways and Iberia increased just $1.4 million from a year ago. Traffic rose 1.2 percent in the third quarter while yield shrank 0.8 percent.
Revenue in the first nine months of 2011 was up 10.6 percent year-over-year to $1.2 billion, driven by a 16.7 percent surge in first half sales. Volume was up 5.3 percent year-on-year and yields were 4.9 percent higher during the same period.
IAG narrowly outperformed close rival Lufthansa Cargo, whose third quarter revenue dipped 1.9 percent to $1 billion. IAG didn’t say whether it made a profit on cargo and didn’t provide a breakdown between BA and Iberia, which merged their freight operations in April.
The company's cargo unit is bracing for a tough fourth quarter as October traffic fell 3.8 percent from a year earlier and revenue grew just 0.2 percent. BA’s volume was down 5.2 percent while Iberia’s traffic increased by 0.8 percent.
IAG’s third quarter profit declined 31 percent from a year ago to $497 million while revenues rose 2.2 percent to $6.2 billion.
Separately, IAG said it has agreed in principle to buy Lufthansa’s British Midland unit subject to due diligence and regulatory approval. It expects to sign a purchase agreement in the coming weeks and close on the deal in the first quarter of 2012.
-- Contact Bruce Barnard at brucebarnard47@hotmail.com.