Bruce Barnard, Special Correspondent | Aug 03, 2012 9:37AM EDT
Cargo revenue at International Airlines Group, the merged British Airways-Iberia carrier, stalled in the second quarter as strong growth at the U.K. airline was offset by a weak performance by its Spanish partner.
Revenue slipped 0.3 percent to 299 million euros ($367.8 million) in the three months to June 30 from $371.5 million in the year-earlier period. This left first half sales unchanged from the first six months of 2011 at $725.7 million.
The gap between the two carriers is widening, with BA’s cargo traffic rising 3.2 percent in July from a year ago while Iberia slumped 16.4 percent, leaving IAG’s combined volume 1 percent lower. Revenue grew 3.7 percent on 4.1 percent extra capacity, trimming the load factor by 0.3 percentage points to 77 percent.
Despite Iberia’s problems, IAG outperformed its larger European rivals, Lufthansa, which saw revenue dip 9.3 percent in the second quarter, and Air France-KLM, which was down 4.4 percent.
IAG did not say whether it made a profit on cargo in the second quarter or in the first six months of the year.
IAG swung to an operating loss before exceptional items of $4.9 million in the second quarter from a $223.7 million profit a year ago. There was a $575 million first half loss against an $108 million profit in the same period in 2011, with Iberia falling $323.5 million into the red while BA posted a $16 million profit.
IAG announced a radical restructuring of Iberia involving job losses and a restructuring of its network.
“Iberia’s problems are deep and structural and the economic environment reinforces the need for permanent structural change,” said IAG Chief Executive Willie Walsh.
“The plan should be completed by the end of September and will encompass every aspect of Iberia’s business.”
IAG did not say whether the cargo unit will be impacted by the restructuring.