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IAG Cargo's Q2 revenues and traffic down, but yields up

IAG Cargo's second quarter revenues and cargo traffic fell year on year due to the Middle East conflict, although the business boosted yields through a focus on premium cargo. Cargo revenue was £295m in the second quarter ending 30 June. This was down 5.1% from £311m in the second quarter of 2025. IAG Cargo's cargo traffic was also down 16.9% on the second quarter of 2025 to 1.1bn cargo tonne kms (CTKs). Though revenues and volumes were down, cargo yields, measured as cargo revenue per cargo tonne kilometre (RTKs), were up 14.2%. In its first half results release, IAG said: "Cargo capacity was impacted from March onwards by cancellations to destinations in the Middle East. The impact of lower revenues was mainly offset through operating cost savings and fuel-related price increases." "The cargo business continued to prioritise premium and higher-yielding flows, particularly across Asia Pacific and India, supported by strong demand for specialist products." IAG Cargo said it has also advanced the planned launch of its joint global cargo business with Qatar Airways Cargo and MASkargo, with operations commencing across 59 markets while continuing to invest in its network and customer offering. The joint business aims to bring together the combined expertise and infrastructure of the airlines and is expected to enable a streamlined product offering, enhanced connectivity, faster transit times, and new routing opportunities across the airlines' combined networks. Once fully launched, the joint business is expected to provide customers with access to more than 400 destinations worldwide. IAG Cargo saw both revenues and cargo traffic decline in the first quarter of the year as the Middle East conflict, a weaker dollar and a strong comparison period last year affected comparisons.

Air France-KLM gains from Middle East capacity reduction and high-tech demand in Q2

Air France-KLM Group recorded a cargo revenue increase of 25% year on year in the second quarter, supported by reduced industry capacity due to the Middle East conflict and demand for high-tech shipments. Total cargo revenues for the Group were €711m in the second quarter, up 25.7% compared to the second quarter of 2025. Cargo unit revenues (per Available Ton Kilometers - ATK) were up 26.7% for Air France KLM Martinair Cargo (AFKLMP), said the Group. "Cargo unit revenues increased significantly (26.7% at constant currency) thanks to strong demand resulting in an increase in load factor and yield and, especially in Asia, high unit revenues." The Group added that "increased pricing following the rising fuel price" also contributed to revenue increases. AFKLMP volumes for the quarter amounted to 237m kilograms, an 8.9% increase year on year, while capacity was up 2.9% year on year. The Group commented: "Global air cargo capacity started to normalize towards the end of Q2, as Middle East disruption eased, Gulf hub capacity was restored and operational pressure reduced. However, demand continued to outpace capacity growth on several key lanes, keeping the market relatively tight. "In 2026's second quarter, the Group's Cargo business achieved an impressive increase of revenue per ATK against a constant currency of 26.7%. Since the Middle East conflict started, reduced industry capacity and strong industry demand, fueled by demand for semiconductors and AI-related hardware, increased the Group's yield by 17.2% and load factor by 3.7pt to 49.2%. "Cargo carried 237 million kilograms, representing an 8.9% increase year-on-year. The capacity grew 2.9%, despite limitations in full freighter capacity due to scheduled and unscheduled maintenance and traffic increased by 11.3% year-on-year." The Group confirmed that as of 30 June, it had six Airbus A350 freighters on order. Total Group revenues increased by 9.7% to €7.6bn.

Changes to US postal requirements may cause problems

The changes in de minimis rules in the US are creating complexity and problems for many and the difficulties are continuing to broaden in scope. David Taylor, global commercial director at London-based e-commerce logistics specialists Mark 3 International, pointed out: "In the 12 months since President Trump signed the executive order suspending duty-free de minimis treatment for all countries, the trade environment has become increasingly challenging for exporters." For example, on 1 July the EU introduced a temporary €3 customs duty on low-value parcels imported from outside the EU, mainly through e-commerce. EU member states agreed in December to introduce the customs duty charge per item on parcels valued below €150. And, in late June, in response to the indefinite suspension of the $800 de minimis exemption, US Customs and Border Protection (CBP) introduced new postal informal entry procedures. This new process, known as Entry Type 13, has been established to bring international mail into parity with other American entry modes, Taylor noted. The new rules are intended to meet three goals; "Firstly, to capture duty revenues that were historically exempted; secondly, to use richer data to screen for admissibility and IP [intellectual property]/consumer-protection violations; and finally to disrupt narcotics smuggling that CBP argues is concentrated in the low-data, low-scrutiny postal channel." The so-called 'interim final rule' came into effect on 24 July and is expected to present a series of challenges for UK exporters amongst others. Postal entries into the US that previously only attracted the 10% Section 122 duty are now subject to all applicable duties. Moreover, while the International Mail Duty Worksheet (IMDW) continues to be used for the moment, there are enhanced data requirements and new levels of complexity are being added. The IMDW is used by carriers and mail operators to declare and pay import duties on international postal packages. It must be submitted monthly to CBP along with duty collections. Taylor observed: "While the IMDW process remains in place for now, businesses need to prepare for more detailed compliance requirements. "Logistics customers are already experiencing greater costs, worsening service, and greater uncertainty, and this will almost certainly impact importers, and the end consumers. "Compounding this is the fact that many of the larger carries and postal companies are still poorly equipped to deal with such a seismic change." He noted that according to a recently published factsheet from the UK Government, there has been a decrease of 10.3% (£6.8bn) in UK exports of goods to the US over the last year. Taylor concluded: "While UK exports of services have risen in recent months, the exporting of goods to the US has already declined sharply. "The changes which the industry is going to experience in the next three months - and possibly longer - will make this process even more difficult. "As a result, it's vital that British exporters find trusted partners who can best navigate these complex and evolving changes in the market. By doing so, they reduce the burden on importers and ultimately improve their commercial competitiveness."