News / IAG Cargo annual revenues beat the €1bn mark, as airlines reap the rewards of the capacity crunch

They will not be the only ones to announce significant growth in 2017, but both Atlas Air and IAG Cargo this week revealed a strong 2017.

The Loadstar will report on Atlas Air in more detail next week, but in brief, the carrier enjoyed a 17% rise in revenues to $2.16bn, while volumes rose 20%.

IAG Cargo was somewhat less stellar – but its revenues for the calendar year went up 8% at constant exchange, to €1.08bn, while volumes grew 8%. The carrier increased capacity by 4.8% – and yields inched up 2.2%.

“The market improved throughout the year, culminating in a very strong fourth quarter,” said Lynne Embleton, CEO. “We handled large volumes across each of our hubs and demand for our premium products was particularly high.”

Perhaps a touch controversially, the carrier lauded its “non-off-loadable critical product”. It noted that it was used by “a huge variety of goods ranging from oil and gas equipment to spices and dried fruit in the run up to the festive period”.

In the past year, particularly during the capacity-stricken fourth quarter, carriers have increasingly promoted ‘non-off-loadable’ products, which of course come at a higher rate.

But market sources have told The Loadstar that the implication of this, inevitably, is that other freight – which in the fourth quarter was also facing high rates – could be off-loaded, a situation that was not embraced by loyal, year-round air freight customers.

Nevertheless, IAG Cargo noted that customer service would be a watchword this year.

“In parallel with product innovation we have continued our customer focus,” said Ms Embleton. “The launch of FWD.Rewards in May 2017 saw us pioneer a loyalty programme that rewards small and medium sized freight forwarders through points that are redeemable against flights, hotels and cargo credit. Nine months on from its launch, we have more than 1,000 customers participating in the scheme, which continues to go from strength to strength.

“As 2018 progresses, our emphasis on digital, technology and investment for growth will be key as we continue to focus on delivering the best possible service for all of our customers.”