Forget the flag, IAG proves branding is key
The next item on the agenda, in integration terms, is merging the respective cargo reservation systems, a task slated for early next year. Ahead of the creation of the new super cargo group, Iberia Cargo had already committed itself to investing $85 million in a new cargo terminal at Madrid-Barajas Airport, with a further $60 million being invested by Aena, the Spanish airport operator. When completed in 2015, the development will include a 40,000-square-meter facility, with 15,000 square meters reserved for perishables.
The new terminal will more than double existing handling capabilities for the group at Madrid and improves handling efficiency, being 7 kilometers closer to the main passenger terminals. Just a year into IAG Cargo’s life, Gunning is already being required to get his set of spanners out and bolt on IAG’s new addition of British Midland International. The formerly Lufthansa-owned British carrier operated a modest European and more distant network, but its single greatest asset was the number of slots it held at London Heathrow, which IAG was more than eager to snatch. “The BMI cargo business was modest by global standards, but still produced sales of $30 million, which we are happy to add to our bottom line,” Gunning said.
For 2011, IAG Cargo turned in commercial revenues of $1.5 billion, an 8.6-percent, year-over-year, increase, with cargo volumes at 6.15 million CTKs, up by 4.2 percent. These numbers were matched by a similar increase in yields, which also saw cargo capacity increase by 5.6 percent for the year. “Our premium products performed well, with Prioritise, our express product, increasing revenues by 20.4 percent,” Gunning said. “Resurgence in previously sluggish markets also contributed to our success with growth in Europe and the U.S.”