Cargo revenue slides for US carriers

Major U.S. passenger airlines recently reported declining fourth-quarter and full-year cargo revenue, including American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. Cargo operating revenues in Q4 2022 clocked in as follows: American: $263 million, a 22% YoY decline; Delta Air Lines: $248 million, an 18% YoY decline; Southwest: $43 million, an 8.5% YoY decrease; and United: $472 million, a 35% YoY decrease. Full-year 2022 cargo operating revenues included: American: $1.23 billion, a 6.2% YoY decline; Delta Air Lines: $1.05 billion, a 1.7% YoY increase; Southwest: $177 million, a 5.3% YoY decrease; and United: $2.17 billion, a 7.6% YoY decrease. For American, which operated with 21% less capacity than it did in 2019, a drop in cargo revenue reflects changes in available volume and global economic trends tied to the strengthening U.S. dollar. [caption id="attachment_57133826" align="alignright" width="460"] American Airlines and Delta remain optimistic about 2023. (Photo/Cargo Facts)[/caption] “While our 2022 revenue does represent a small [6.2%] decline vs. 2021, much of this is attributable to foreign exchange,” Greg Schwendinger, president of American Airlines Cargo, told Air Cargo Next. Suspension of cargo services At Southwest, short-term events were to blame for diminishing year-end cargo revenue. “The decline was mostly related to the suspension of cargo services as we worked through our operational disruptions at the end of the year,” a spokesperson for Southwest Airlines told Air Cargo Next. Both United and Delta had different outlooks for cargo volume on their Q4 earnings calls. United’s cargo decline resulted in a shift in one of the airline's key financial figures, with total revenue available per seat mile growth for non-passenger revenue outpacing its passenger revenue available per seat mile in Q4 2022. The airline expects this to reverse in 2023 as its available seat mile (ASM) shifts with fleet growth. “The reversal is due to cargo revenue decline year over year to new post-pandemic run rate that remained well above 2019 and co-brand credit card revenue growing slower relative to our rate of ASM growth for the year,” Andrew Nocella, chief commercial officer at United Airlines, said during the Jan. 13 earnings call. Optimistic for future growth Delta, which reported record-setting cargo revenue, remained optimistic for continued growth. “We expect to grow cargo revenues in 2023, as increased capacity offsets the cargo yield environment,” Glen Hauenstein, president of Delta Airlines, said on the Jan 13 earnings call. American Airlines was also optimistic, saying that it would use technology to increase its operational efficiency. “We remain focused on modernizing all aspects of our business with technology-enabled tools and committed to providing our team members with the resources they need to deliver exceptional operating results and the high-quality customer experience our customers have grown to expect,” Schwendinger told Air Cargo Next . Globally, market forecasts have been mixed. In Asia, while travel has rebounded, cargo traffic declined 19.2% YoY. However, recent Lunar New Year traffic resulted in some rebounds. Outside of the airlines, price volatility had had a negative effect for shippers as airfreight rates dropped 33.6% YoY in January. Other freight forwarders have elected to lay off 20% of their workforces in response to a lull in cargo volumes. Cargo Facts EMEA, the essential event for stakeholders in Europe, the Middle East and Africa, will take place live Feb. 6-8 in Dubai. Register today.

Cargo revenue slides for US carriers

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