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European cargo carriers report challenging November

By control on December 15, 2011

Last month was rather difficult for European carriers, with Air France-KLM posting an 8.1 percent, year-over-year, drop in cargo revenue-tonne kilometers. Although IAG Cargo experienced much more moderate losses, the British Airways and Iberia amalgamation saw freight-tonne kilometers fall 1.7 percent, year-over-year.

Compounding this loss for IAG Cargo was a 2.4 percent, year-over-year, capacity increase. Interestingly, revenue for the European carrier rose 1 percent, year-over-year; year-to-date, IAG’s cargo revenue-tonne kilometers grew by 6 percent.

Despite reducing its full freighter capacity by 6.9 percent, Air-France KLM's load factor dropped to 68.2 percent. Regionally, Air France-KLM Cargo saw the biggest losses in the Caribbean/Indian Ocean and Africa/Middle East markets, with revenue in these trade lanes dropping 13.1 percent and 10.1 percent, year-over-year, respectively.

Freight traffic in the Asia-Pacific and Americas regions was also sluggish for Air France-KLM. Falling a respective 8.8 percent and 6.3 percent, year-over-year, these markets also experienced capacity reductions of 2 percent and 3.5 percent, respectively, in November.

Although it’s arguably been a roller-coaster year for carriers, David Shepherd, global head of sales at IAG Cargo, explained to Air Cargo World that things are beginning to improve — especially in the Asia-Pacific. “The biggest development has been the rebalancing of air freight trade flows between Asia Pacific and Europe,” he said.

“The industry has long been lamenting the imbalance, so to see a stronger European demand eastbound is welcome,” Shepherd continued. “However, what we hope to see next year is [not only] the continued strength of Europe-to-Asia trade, but also a return to strength of the Asian export market.”

British Airways World Cargo, he explained, will capitalize on rebounding freight volumes by deploying its recently acquired Boeing 747-8F on routes to Hong Kong International Airport and Shanghai Pudong International Airport. Two more 747-8Fs will join the freighter, which Global Supply Systems will operate through a five-year wet-lease agreement, at a later date.

Shepherd told Air Cargo World that such fleet enhancements demonstrate IAG’s “commitment to the air cargo industry, the environment, and providing customers with increased capacity on constrained routes.”

What’s more, he said, IAG has been able to withstand the challenges of 2011 by combining the key strengths of BA and Iberia’s freight operations. “Although we have witnessed many of our competitors and customers transitioning through mergers and consolidation in the past, it was a whole new experience for [us],” Shepherd said. “It’s been an important learning process and one we can build upon as IAG continues its acquisition trail.”

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