• IAG Cargo is adapting to a transformed airfreight landscape by investing in digital infrastructure, automation, and real-time pricing systems, enabling responsive, efficient operations amid geopolitical disruptions and changing trade routes.
• The carrier is reinforcing customer trust and operational accountability through online booking transparency, service fees for manual bookings, and expansion of premium offerings for fast-moving and sensitive cargo, including lithium battery shipments.
• Leadership and workforce development underpin the transformation, with structured training, graduate programmes, and diversity initiatives enhancing management capability and ensuring the business remains resilient, inclusive, and aligned with global trade needs.

As global air logistics grapple with geopolitical instability, shifting trade routes, and the accelerating demands of e-commerce, the air cargo sector is undergoing a fundamental transformation. Far from returning to pre-pandemic norms, the industry continues to adapt to a new operating environment shaped by overflight restrictions, uneven passenger traffic recovery, and the need for greater supply chain agility.

Key players in the sector are responding with strategic investment in digital infrastructure, enhanced route planning, and renewed focus on workforce development. The continued disruption to traditional air corridors – particularly due to the Ukraine conflict and restrictions on Russian airspace – has forced airlines to rethink long-haul freight operations, especially across Asia-Pacific.

Technology, flexibility, and leadership are emerging as critical pillars in the sector’s response, as air cargo carriers work to maintain reliability and efficiency in a volatile global landscape.

“Adaptability generally has always been a watchword within aviation,” David Shepherd, CEO of IAG Cargo, said. “No two days are the same. The industry never stands still.

“The shape of our network has not returned to pre-2019 levels. The passenger business is still flying to Asia-Pacific, but in a much-reduced fashion, and with longer routings because of overflying of Russian airspace.”

Against that backdrop, IAG Cargo has prioritised transforming its business, with much of that focusing on automation and technology. “We have re-platformed our commercial operations,” he said. “Our operation at Heathrow is now 25 years old, and we are committed to investing in our infrastructure – physical and digital – to ensure we can continue to cater to the needs of customers in the future.

“It’s clear that our investment is yielding results – not only for our customers, but for the business as a whole,” Shepherd adds. “In the first half of 2025, IAG Cargo recorded revenues of €629 million, marking an 11.1 per cent increase year-on-year, with cargo volumes up 4.5 per cent compared to the same period in 2024.”

“We have brought in new technology that allows us to better react to changes in the market, from a demand and from a capacity point of view,” Shepherd says. “Making sure that it is consistent through your digital channels is absolutely paramount. You are not relying on people manually pricing at the right level.”

That level of automation enables responsiveness down to the minute, creating a real-time pricing advantage. “We are putting a commercially attractive option in front of [the customer] on a minute-by-minute basis.”

But while tech is vital, Shepherd stresses that strong partnerships are just as important. “This new partnership marks an important step forward as we deliver on our strategy into the rest of this decade,” he says, referring to the joint business announced in Munich.

Redefining customer trust

In a sector where timing is everything, building and maintaining trust means delivering with precision. “At the end of the day, the customer is expecting us to deliver,”

This trust is being reinforced through operational clarity and customer accountability. “We are starting to charge for areas of the business where we are seeing inefficiency brought into our operations,” he notes. “These inefficiencies, such as mismatches between booking and actual freight or last-minute changes, don’t just slow operations – they affect others in the supply chain.

“If I book an iPad on a flight and turn up with a grand piano… other customer’s bookings have to bump off that flight,” he explains. “We have recently enhanced our .com platform to offer a faster, more intuitive booking journey. Booking online provides our customers with access to the very best available price whilst equipping them with additional transparency and control over their booking.

“To support this shift, we have applied a small fee to bookings made by phone where an online option exists. This reflects our commitment to evolving with the digital age, being where our customers want us to be, and delivering value in every interaction.”

Meeting the moment

Demand is changing – not just in volume, but in the nature of goods transported. IAG Cargo is expanding its premium services to reflect that shift. “We have developed over the last four or five years a critical product for fast-moving freight,” Shepherd says.

“Whether it’s e-commerce or critical spares… we have seen quite a lot of demand.”

With new demand comes new challenges, particularly with dangerous goods like lithium batteries hidden in everyday parcels. “The proliferation of lithium batteries over the last 10 years [is] one of the biggest developments in the industry,” he says. “We have fastidious cargo safety and security regulations.”

And while IAG Cargo predominantly uses belly-hold capacity on passenger aircraft, Shepherd is confident in the industry’s commitment to safety across the board. “Safety is something that we take very seriously as do other operators within the industry.”

Leading transformation

Beyond technology and operations, Shepherd points to leadership and people as the real engine of transformation. “My approach to leadership is quite simple,” he says. “I like to think I set very clear KPIs for people and for the business. I make sure that I have an executive team that is trusted to deliver.”

“The team combines long-standing employees with new external hires. We have invested in a structured training programme to strengthen leadership capability, team management, and people development, ensuring managers get the very best out of their people.

Over 140 people have gone through the leadership programme to date. “We are really investing in our top-tier management to make sure that they are the leaders they need to be.”

The investment does not stop there. We restarted our graduate programme in 2023, with the first graduates moving into permanent roles in October 2024 and the most recent cohort now transitioning into positions across the business,” says Shepherd. “We have had biochemists, physicists, engineers — people coming off aviation programmes at Cranfield.”

He’s particularly proud of the strides the business has made in diversity, with female representation on the senior leadership team now well above the industry average for logistics. Last year saw a 19 per cent increase in women at global senior leadership level, reflecting the company’s ongoing commitment to building a more inclusive workplace.

Ultimately, Shepherd believes the sector’s purpose is what keeps it resilient. “We are not just here to make money. By keeping goods moving, our operations facilitate global trade and support economies worldwide. In many parts of the world, communities rely on income from getting produce  market, and our diverse product range and global network make that possible.”