Higher cargo yields offset weaker volumes as Middle East disruption and reduced third-party freighter capacity weigh on IAG’s air freight operations.
International Airlines Group (IAG) reported higher cargo revenues in the third quarter of 2026 despite a significant decline in freight traffic, with improved yields helping offset lower transportation volumes.
The group’s cargo division generated revenue of €294 million in the three months ended 30 September 2026, representing a 3.9% increase compared with €283 million in the corresponding period last year.
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However, cargo traffic, measured in cargo tonne kilometres (CTK), declined by 13.9% year on year to 1.101 billion CTKs, compared with 1.279 billion CTKs in the third quarter of 2025.
The contrasting performance reflects stronger revenue generation per unit of cargo carried. Cargo revenue per CTK increased by 20.7% to 26.70 euro cents, compared with 22.13 euro cents a year earlier.
The results indicate that improved pricing and a focus on higher-yielding cargo helped IAG maintain revenue growth despite reduced freight volumes.
Middle East disruption affects cargo capacity
In its financial results, IAG identified operational disruption in the Middle East and the cancellation of third-party long-haul freighter capacity as key factors affecting cargo operations during the period.
The reduction in available freighter capacity particularly affected cargo volumes from the Asia-Pacific region, placing pressure on the group’s overall transportation performance.
These developments highlight the continuing sensitivity of international air freight networks to geopolitical disruption, capacity availability and changes in long-haul operating arrangements.
For airlines with significant cargo operations supported by passenger aircraft belly capacity and dedicated freighter services, changes in available capacity can have a direct impact on shipment volumes and network connectivity.
Nine-month cargo performance remains under pressure
Despite the improvement recorded in the third quarter, IAG’s cumulative cargo performance for the first nine months of 2026 remained weaker than the previous year.
Cargo revenue for the nine months ended 30 September reached €864 million, down 5.3% from €912 million in the corresponding period of 2025.
Cargo volumes declined by 12.8% to 3.378 billion CTKs, compared with 3.875 billion CTKs a year earlier.
However, cargo revenue per CTK increased by 8.7% to 25.58 euro cents, against 23.54 euro cents in the first nine months of 2025.
The figures suggest that higher cargo yields have provided some protection against weaker demand and reduced capacity, although they have not been sufficient to fully offset the decline in year-to-date revenue.
Group revenue increases despite higher operating costs
At group level, IAG reported third-quarter revenue of €9.744 billion, an increase of 4.5% compared with €9.328 billion in the same period last year.
Passenger revenue increased by 3.8% to €8.580 billion, while cargo revenue rose by 3.9%. Other revenue, which includes activities such as loyalty and related businesses, increased by 11.3% to €870 million.
However, the group faced considerable cost pressure during the quarter. Fuel costs and emissions charges increased by 30.4% year on year to €2.444 billion, while employee costs rose by 2.8% to €1.705 billion.
Profit before tax declined by 12.9% to €1.628 billion, compared with €1.869 billion in the third quarter of 2025.
The results underline the challenging operating environment facing airlines, with higher fuel expenditure and operational disruption affecting profitability despite growth in overall revenues.
Cargo yield improvement offers some resilience
IAG’s third-quarter performance demonstrates how airlines can maintain or increase cargo revenues even when freight volumes decline, provided they achieve stronger yields and prioritise higher-value traffic.
The 20.7% increase in cargo revenue per CTK during the quarter was particularly significant, indicating a stronger revenue contribution from each unit of cargo transported.
However, the decline in cargo volumes remains an important concern, particularly given the impact of reduced freighter capacity and disruption across key international trade routes.
For IAG Cargo, the coming quarters will be important in determining whether improved yields can be sustained and whether capacity availability and cargo volumes recover as network conditions evolve.
The latest results highlight a mixed outlook for the group’s freight business: stronger pricing performance in the third quarter, but continued pressure on overall cargo volumes and cumulative revenue.
