IAG Cargo praised for quick reaction to pandemic, but group is in the red
IAG Cargo’s 18.5% rise in revenue to €1.3bn ($1.6bn) was severely overshadowed by the group’s ...
As trade between Iran and the EU grows, IAG Cargo has become the latest airline to launch services to the Middle Eastern country, while KLM is due to start flights in October. Air France resumed services in April.
Iran, which has the second-largest population in the Middle East, also has its second-largest economy after Saudi Arabia, with an estimated nominal GDP of $397bn in 2015.
EU trade with Iran stands at some $8bn and is expected to quadruple in the next two years. Non-oil exports from Iran rose to $16.3bn in the first quarter, up 21%.
According to German financial data, exports to Iran jumped 15% in the first six months of this year to €1.13bn, as Iran imported machinery and equipment, as well as chemicals and electrical engineering. The renewable energy sector is also seeing growth. German exports to Iran are expected to rise by about 25% this year and by 30% in 2017.
Iran’s economy in 2016 and 2017 is expected to grow by 4.8% and 5.4% respectively.
IAG Cargo is offering six flights a week to Tehran with a 777- 200 aircraft, providing forwarders with bellyhold capacity of six pallets and up to 20 tonnes of lift on each flight.
“With Iran’s economy predicted to grow, as new companies wish to expand and modernise, we expect to see demand increase for businesses looking to trade in the region,” said a spokesperson for IAG Cargo.
“Therefore we have put ourselves in the best possible position to compete effectively and deliver what shippers and forwarders need.”
Sanctions against Iran eased in January following talks last year, although some remain. Companies still need to exercise caution and understand the remaining restrictions.
The main imports to Iran are non-electrical machinery, iron and steel, chemicals and related products, transport vehicles, electrical machinery, tools and appliances. The government is also keen to boost infrastructure and it is anticipated that $1trn of investment will be needed.
Key opportunities will also include the energy, automotive and airline manufacturing sectors. There may be an increased demand for consumer goods such as electronics and clothing.
IAG Cargo said it anticipated “that commodities on the route will include perishables, spices and confectionery, foodstuffs like pistachios and caviar as well as building materials and Iranian carpets”.
The value of Iranian handicrafts exports rose 36% in the first four months of the Iranian calendar year, to $92m.
“The country’s predicted economic growth over the coming years means that connecting Iran via our London hub to the rest of the world will be of real benefit to our customers,” said David Shepherd, IAG Cargo’s head of commercial.