NewsWeek


IAG Cargo suffers profit fall in tough first half


The air freight industry’s first and only television chan- nel, produced by ACWpublishers The A-Z Group and found at www.aircargoTV.com, leads this week with a study produced by ethics consultant GoodCorporation that suggests a third of the world’s 30 biggest logistics companies are running the risk of prosecution under the UK’s 2010 Bribery Act. GoodCorporation believes that directors who cannot


show that they have taken “adequate procedures” to pre- vent corruption in their organisation, as well as their supply chain, face unlimited fines and up to 10 years in jail. The ongoing tale of litigation in the air freight industry


took its latest turn recently, aircargoTV reveals, when the US Eastern District Court of New York approved a US$207 mil- lion settlement with nine airlines said to be involved in an air cargo cartel. The court has now approved class action settlements totalling $485.8 million with 17 carriers. In Sudan, continued fighting has hampered the efforts


being made to feed refugees. World Food Programme employees have been attacked and one was killed last week. Finally, Lufthansa Cargo has said that it is no more than


“cautiously optimistic” about its business prospects for the rest of this year, having just revealed a year-on-year decline in its freight traffic during the first half of 2012.


IAG CARGO, the single freight carrier business made up of British Airways World Cargo and Iberia Cargo, made 590 million euros (US$724 million) in commercial rev- enue during the first six months of this year, a fall of 0.3 percent over the compara- tive period of 2011. Freight traffic was also


down year-on-year over the quarter, by 1.8 percent, to a lit- tle over 3 billion freight tonne-km. With cargo capacity up by


3.7 percent, the load factor inevitably fell. Yield rose by 1.5 percent


year-on-year unless exchange rates are taken into considera- tion, in which case it fell by 1.8 percent. Steve Gunning, IAG man-


aging director, said that the results represented “solid over- all performance when set against an economic climate that has continued to prove challenging”. However, looking forward,


he warned: “Due to continued questions over the pace and consistency of economic recovery we remain cautious about future performance.”


IATA warns of threat to tenuous industry recovery


ACCORDING to the International Air Trans- port Association (IATA), global air freight volumes increased by 0.6 percent in June com- pared to the previous month, while traffic measured in freight tonne-km was up by 0.8 percent over June 2011. With capacity having risen by 1.7 percent


year-on-year, June’s cargo load factor stood at 45.2 percent. The “minor recovery” currently being seen is


no longer being driven solely by Middle Eastern airlines, IATA noted, pointing out that North


American carriers have been performing more strongly in recent months. Nevertheless, Asia Pacific carriers still hold the largest share of the world’s air cargo market. The association informed: “The positive


trend has been consistent with improvements in business and consumer confidence seen earlier in the year. In the most recent months, howev- er, business confidence has started to soften as has growth in world trade, and a continuation in this trend could threaten the recovery in demand for air freight in coming months.”


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TOKYO-BASED CARRIER ANA saw its international cargo volumes rise in the April - June quarter (the first of its 2012 financial year), but revenue fell year-on-year by 9 per- cent. Revenue earned from domestic freight operations was also down, by 3.5 percent year-on-year.


DANISH FREIGHT FORWARDER and logistics services provider DSV has said it enjoyed the best first-half-year results in its history, with revenue up strongly and earnings rising by approximately 5 percent year-on-year.


Gunning: “we remain cautious about future performance”


The company continues to


leverage the benefits of integra- tion, offering customers an end-to-end global network and a competitive premium product portfolio. “Additionally, we continue


to evolve our customer distri- bution channels to ensure that we provide a service that is dynamic and user-friendly.” Gunning concluded: “By


focusing squarely on network reach, product excellence and dynamic distribution we are building a foundation for the company that will drive long- term growth.”


IJS GLOBAL HAS SIGNED a three-year contract covering the warehousing and distribution of Novartis Animal Health- care products in the Philippines. IJS has a multi-modal facility in the country built to Novartis’s requirements and, while most of the associated shipments are made by sea, many of the urgent movements are made by air.


AIR FRANCE-KLMflew 900 million cargo tonne-km in July, down by 5.5 percent on the same month of 2011. With capacity having been reduced by 1.6 percent year-on-year to 1.46 billion tonne-km, the load factor fell by 2.5 percentage points to 61.6 percent.


WITH 15 NEW A320 and four new A330 aircraft expected to be delivered in the period up to 2014, Cebu Pacific of the Philippines has announced it is to sell its entire fleet of 10 A319 aircraft to Allegiant.


JAPANESE FORWARDER Yusen Logistics saw its sales and net income rise year-on-year in the April - June period, the first quarter of its 2012 financial year.


GERMANY’S Lufthansa Group has reported second-quarter operating profits of 361 million euros (US$441 million), reducing its operating loss for the first half of this year to just 20 mil- lion euros ($24 million) – although it made a profit of 114 million euros ($141 million) in the same six months of 2011. A statement cited consistent capacity and


yield management in cargo traffic, as well as “clear restructuring successes” at Austrian Air- lines, as factors contributing to the encouraging quarterly result.


Lufthansa makes progress on restructuring its business In terms of its cargo business, Lufthansa


noted that “the high price of oil and lower demand for logistics services adversely affected the course of business, as did the strict night flight ban at the hub in Frankfurt”. On the back of the latest results, the group


confirmed its 2012 forecast of an operating profit “in the medium three-figure million euro range”. Lufthansa’s first-half revenue totalled 14.5


billion euros ($17.7 billion), up by 6 percent in comparison to the same period of 2011.


13 August 2012


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