News / Bullish IAG Cargo chief puts his faith in technology as revenue drops

© Alexey Novikov

IAG Cargo on Friday announced a 6.6% decline in commercial revenue last year.

It reported 2016 revenue of €1.02bn, with yield down 9.3% and volumes down 2.9%. However,  cargo tonne kilometres were up 3%.

IAG, which is shortly to launch a simplified online booking system, saw capacity grow 10.5% as it integrated the Aer Lingus network, and added that by adjusting the figures to reflect a directly comparable operation, commercial revenues fell 8% year-on-year.

Nevertheless, CEO Drew Crawley called the figures “resilient”, and pointed to the carrier’s growth in premium products as a reason for optimism.

“The second and third quarters suffered from diminishing demand, leading to significant yield pressures,” he said.

“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%, with our industry-leading Constant Climate product continuing to see significant volume growth year on year, shipping over 40,000 consignments in 2016.”

As well as facilitating the booking process with an easy-to-use website, the carrier is launching a new warehouse management system that will “transform the way freight is processed through our premium operation”.

IAG Cargo, under Mr Crawley, who took over the cargo arm in January last year, is focusing on technology in a bid to work with digital disrupters, and improve customer experience.

“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,” added Mr Crawley.

Cargo accounted for 4.5% of the IAG group’s total revenue in 2016, just shy of the 4.7% the year before.