The current challenging market conditions, characterised by falling rates and volumes, justify the asset-light model adopted by IAG Cargo, the European airline group said today as it announced its third-quarter results.

In the three months from 1 July to 30 September, the IAG airline group’s cargo division reported commercial revenue of €238 million, including figures from Aer Lingus, up marginally from the €236 million for the same period last year.

It said that in the third quarter, market conditions “have remained challenging. This has placed pressure on yields, which decreased 4.5% at constant exchange rates, with volumes also finishing 4.7% down on the prior year”.

Steve Gunning, CEO of IAG Cargo, commented: “We have made the point in the past that the air cargo market has established a ‘new normal’, with excess capacity and reduced demand leading to significant price and yield pressures. In Q1, the West Coast port strike in the US gave the air cargo market some respite from this new normal, but the past two quarters have seen a return to more challenging conditions.

“In light of this, our strategy and operational model is more relevant than ever; with a strong focus on cost control, premium products and smart partnerships critical to our success. We have made good progress over the quarter against all these strategic goals, and our decision to remove our wet-lease freighter capacity from our fleet and focus on a partnership model has proved justified.

“We have also seen our premium product strategy succeed, with particularly strong growth for our important Constant Climate product. Premium products as a whole now represent more of our business than ever, with record revenue and tonnage figures.

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