International Airlines Group carried less cargo in 2015 than a year earlier but its freight revenue grew as it focused on strategic partnerships and premium products to offset lower rates and yields in bearish global market.
The owner of British Airways and Iberia transported 874,000 metric tons of cargo last year, down 2.6 percent on the 897,000 tonnes flown in 2014, and boosted revenue by 3.2 percent to 1.02 billion euros ($1.1 billion).
Cargo stalled in the fourth quarter at 236,000 tonnes, but revenue grew 4.9 percent to 281 million euros compared with 268 million euros in fourth-quarter 2014.
Average yield declined 4 percent year-over-year in 2015 while capacity increased 3 percent.
“These are resilient results in the face of challenging market conditions, where excess capacity and reduced demand are leading to significant price and yield pressures,” said Drew Crawley, CEO of IAG Cargo.
“These structural changes to the market further reinforce our strategy of aggressive cost discipline coupled with focus on growing our premium product offering.”
“Despite an initial boost from the (U.S.) West Coast port strike, 2015 was a year where the market forces of supply and demand become increasingly imbalanced.”
Revenue from express products grew 14 percent in 2015 and pharmaceutical revenue was up 37 percent from the previous year.
IAG Cargo said it will launch new destinations this year including Lima, San Juan, and San Jose, California and San Jose, Costa Rica. It also plans to complete the integration of Air Lingus Cargo, the freight unit of the Irish Airline IAG acquired for 1.35 billion euros in August.
British Airways cargo revenue shrank 8.5 percent in 2015 to £547 million ($766 million) while Air Lingus boosted its freight sales by 12.8 percent to 53 million euros.
Iberia’s cargo revenue stalled last year at 253 million euros.
“IAG Cargo’s model and clear strategic direction has proven its worth in 2015 and we remain confident that the right strategy is in place for 2016,” Crawley said.
The parent IAG group’s operating profit surged by 125 percent to 2.3 billion euros, helped a sharply lower fuel bill that was partially offset by a stronger dollar, on revenue up 13.3 percent at 22.8 billion euros.
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