The aviation industry proved just how resilient it is throughout the pandemic, coping with the ups and downs when no one knew what would happen next.
It has had to cope with operating a cargo-focused network then moving back to cater for passengers who were eager to fly again once travel restrictions were lifted.
Looking back on these last few years, John Cheetham is very proud of IAG Cargo’s performance managing the changing environment.
He chuckles when he describes the business as nothing if not resilient, managing the switches from focusing on passengers to cargo then back to passengers, describing the period as an incredible ride.
He says, “Very quickly we agreed with the business leaders across the operating companies that there was sufficient cargo demand to create a schedule to fly and cover the costs of flying. We worked very closely with our customers to ensure that we could build not just point-to-point traffic but an actual network of cargo-only flying.”
Due to strong customer relations, it was important for IAG Cargo to get a network up and running as quickly as possible, which they appreciated. The transition back as passenger markets opened up was exciting and presented different challenges.
“The passenger business wanted to redeploy their assets and get back with very high passenger demand and get back to the shape of their network as quickly as possible. We worked closely with them to influence the type of equipment to put on certain routes,” says Cheetham.
Giving some examples, widebody aircraft are operating between Frankfurt and London, supplementing short-haul freighters and trucks, which suits both passengers and cargo, and Nairobi flights will be upgraded to an Airbus A350, significantly increasing capacity. Looking at data, IAG Cargo has been able to transition back to a passenger-led schedule with cargo capacity.
IAG Cargo’s work throughout the pandemic means the rest of the group is left in no doubt about the value of cargo, and this relationship has continued post-pandemic.
Cheetham says it is beneficial for both parties because the best decisions possible are being made.
“I think the respect IAG Cargo has managed to build within the group is something that we want to keep hold of,” he says.
The current market is challenging due to high inflation and the cost of living impacting consumer spending, maritime disruption has cleared and fuel prices are high but this is a cyclical business and Cheetham thinks it could be a relatively short cycle so he is optimistic.
Digital focus
Good progress is being made across the industry in the space of digitalisation but there is a long way to go and Cheetham is unsure whether the pandemic was the biggest driver.
IAG Cargo is seeing significant improvements in online bookings, which has been enabled by working with third parties and investing in its own services, with continued investment to further improve functionality and the user experience.
Electronic air waybill penetration needs to increase to maximum levels otherwise IAG Cargo has to run a dual process, which is inefficient.
Data gives IAG Cargo more information to plan its business, which will increase reliability for customers so this is where IAG Cargo is making investments.
Among third party booking platforms, IAG Cargo works with WebCargo, CargoAi and cargo.one, and has API connections with WiseTech.
Cheetham says it is important to reach as many customers as possible and using booking platforms is one way to do it.
“Customers are looking for choice, they will have a preference for how they wish to transact. What’s important for me is that customers are able to access our capacity, understand our network and products and the availability through whichever channel they choose,” he says.
Sustainability is becoming increasingly important, with IAG Cargo signing sustainable aviation fuel deals with customers and the IAG group has committed to operating 10% of its fleet with SAF by 2030.
Other measures include electric tugs being trialled at London’s Heathrow Airport and using biodegradable plastics for wrapping cargo.
Cheetham says, “Whether it be small things or big things, we are trying to have a multi-faceted approach towards sustainability and it will become more and more important. Our customers are telling us it is important for them, it is important for us and the whole planet so we will continue to look at ways in which we can reduce our footprint and offer these options to our customers.”
Looking ahead
In the post-pandemic world, Cheetham hopes that the industry retains its respect for air cargo for its work moving vaccines and other vital goods and keeping the global economy functioning.
IAG Cargo learnt a lot during the pandemic, saying it is becoming a much more data-driven organisation and investments are being made for further improvements in areas such as digitalisation.
Cheetham says, “I think the influence that we have managed to gain and build upon through the pandemic with our operating companies ensure that our customers will have more capacity aligned to their needs than we would have been able to influence before.”
This article was published in the June issue of Air Logistics International, click here to read the digital edition and click here to subscribe.