Etihad posts $1.5bn loss, blaming partners and rising fuel costs
Etihad has turned in another loss, albeit smaller than the previous one. Although it doesn’t publish ...
Continued weak global trade has lead to flat – or worse – air freight results at Europe’s three leading carriers.
IAG Cargo, the least transparent, said its third-quarter commercial revenue, July 1 to September 30, was €238m, up 0.8% on a year earlier. Volumes were down 4.7%, year-on-year.
Noting that market conditions remained “challenging”, it said pressure on yields had led to a 4.5% decline, at constant exchange rates.
Steve Gunning, CEO, said the “new normal” in air freight was characterised by “excess capacity and reduced demand, leading to significant price and yield pressures”.
He explained: “In Q1, the US west coast port strike gave the air cargo market some respite from this ‘new normal’, but the past two quarters have seen a return to more challenging conditions.”
IAG Cargo, which incorporated Aer Lingus Cargo into its results in August, said premium products had accounted for more business than ever before and had record revenue and tonnage figures.
Over the Channel, Air France-KLM Cargo appears to have stemmed some of its losses.
It reduced full freighter capacity by 30% in its third quarter, creating a strike-adjusted capacity fall of 7.4%. Costs fell by 11.6%, but revenue per available tonne kilometre (RATK) also fell by 11.5%, “reflecting persistently weak demand,” said the carrier.
The operating loss was €81m, a 21% improvement, year-on year. However, there are still some large, negative numbers in the results.
Cargo revenue for the first nine months fell 9%, excluding the strike, and 16.7% like-for-like, to €1.8bn, resulting in an operating loss of €222m – down 41% on the previous year. Load factors are at 59.5% so far this year.
The group added that all its MD-11Fs would be retired by June next year, leaving just five full freighters by the end of 2016. It anticipates that the freighter business will be at break-even by 2017. You can read the full results here.
Lufthansa Cargo also cited weak market conditions as it announced that its adjusted Q3 EBIT almost halved to €35m.
The group’s logistics business segment, which includes Jettainer and Aerologic, saw third-quarter revenues fall 8.3% to €556m, but over the nine-month period revenues only fell 0.2%, to €1.76bn.
The third quarter saw tonnage fall 4.3% year-on year, while AFTK rose 2.6%. Load factors fell 4.7 points to 62.4%. Over nine months, AFTK rose 3%, reflecting a 5% rise in belly capacity and 0.9% rise in freighters. RTKs were 7.39bn, down 2% while load factors were flat, at 74.8%.
The carrier said it would try to counteract the weak market by focusing on quality, and flexible capacity management. It will reduce its freighter fleet from 14 MD-11Fs to 12, and also expects to cut operating expenses, mainly staff, by €40m by 2018.
It added it would try to boost the efficiency of its freight centre, having postponed plans for the development of its LCCneo cargo terminal.
Full interim results are here.