Southwest’s cargo revenue rises 2.4%

Southwest Airlines this week reported a record $6.3 billion in operating revenue for the first quarter of 2024, an increase of 10.9% from the same period last year. The carrier also reported a revenue increase from its cargo operations of 2.4% year over year to $42 million. [caption id="attachment_22158" align="alignright" width="300"] (Courtesy/Southwest)[/caption] While this is in line with Southwest’s Q4 2023 cargo revenue, which increased 2.3% YoY , it is not in line with many other carriers, which have reported cargo revenue decreases. In Q1: Delta Air Lines ’ cargo revenue was down 15% YoY; United Airlines ’ cargo revenue was down 1.8% YoY; and American Airlines ’ cargo revenue was down 16% YoY. Despite Q1’s increased revenue, Southwest reported a net loss for the quarter. The carrier reported in Q1: A net loss of $231 million, or $0.39 per diluted share; and A loss before income taxes of $298 million, while last year’s loss before income taxes was $205 million. Southwest Chief Executive Bob Jordan said expected delays on aircraft deliveries from Boeing will present “significant challenges” this year and next. “We are taking quick action to re-plan based on expected 2024 and 2025 delivery delays,” Jordan said on the April 25 earnings call. “While it’s impactful, I support Boeing taking the time to do the work to understand and fix the issues. A stronger Boeing company for the long term is good for Southwest Airlines.” The FAA launched a formal investigation into Boeing’s production line and suppliers following the Jan. 5 emergency landing of an Alaska Airlines flight after a door blew off the Boeing 737 Max 9 midflight. “We began the quarter with the expectation we [would] receive 79 of our 85 contractual [aircraft] deliveries in 2024,” Chief Financial Officer Tammy Romo said on the call. “That number dropped to an expected 46 to 48 aircraft [in] March ... and has since reduced even further to a conservatively planned 20 to 28 aircraft deliveries. Thus far, we have received five to eight aircraft from Boeing during the first quarter.” Hawaiian Airlines’ non-passenger revenue falls 3.1% Hawaiian Holdings , the parent company of Hawaiian Airlines , reported $645.6 million in operating revenue in Q1, up 5.4% YoY. Non-passenger revenue, including cargo, fell 3.1% YoY to $62.1 million. In Q4 2023, Hawaiian reported an 8.5% YoY drop in operating revenue to $669.1 million and a 15.9% YoY slide in non-passenger revenue to $67.5 million. While revenues were lower in Q1 compared with the previous quarter, the YoY comparisons improved. Q1 is traditionally a slow quarter for airlines. Hawaiian this week reported an adjusted net loss of $143.5 million, down $31.7 million from Q1 2023. Hawaiian also reported in Q1: An adjusted diluted earnings-per-share loss of $2.77, down 60 cents from Q1 2023; and An adjusted EBITDA loss of $116 million, equating to an adjusted loss of $2.77 per share. Hawaiian received its second A330-300 freighter for Amazon Air in Q1. The aircraft operates between John F. Kennedy International Airport (JFK) and San Bernardino International Airport (SBD), according to the earnings report. Hawaiian’s partnership with Amazon Air called for the carrier to operate and maintain a fleet of 10 A330-300 freighters, beginning operations with a single freighter in fall 2023, according to the October 2022 announcement of the deal. “Hawaiian will maintain and fly Amazon’s A330s under Hawaiian’s FAA air carrier certificate to move cargo between airports near the online retailer’s operations facilities,” the release stated. “The current plan is to have seven of the freighters flying by the end of the year,” Chief Financial Officer Shannon Okinaka said on Hawaiian’s April 23 earnings call. The deal initially called for Hawaiian to operate 10 freighters for Amazon by yearend. “The number of aircraft and the pace of deliveries has been moving around a little bit, driven by the pace at which Amazon has been able to get airplanes delivered from the vendor,” President and Chief Executive Peter Ingram said on the call. “I would caution that [the seven freighters expected by yearend] may not all be flying by the end of the year because, during the peak period, our partner doesn’t necessarily want to introduce new lines of flying into the operation.” Alaska Airlines is moving ahead in its quest to acquire Hawaiian . The proposed acquisition for $1.9 billion, announced in December, was approved by Alaska and Hawaiian shareholders but still requires regulatory approval. ANA Cargo revenue falls 46.4% in full-year earnings ANA Holdings , the parent company of All Nippon Airways and ANA Cargo , today reported 2.1 trillion yen ($13 billion) in operating revenue for the year ending March 31, an increase of 20.4% from the prior year. Its cargo revenue fell 46.4% YoY to $1.1 billion. “For international cargo service, despite efforts to capture demand between North America and Asia, volume and revenue for international cargo decreased from the same period of the previous fiscal year, due to a decline in market demand from major industries such as semiconductors, electronics and automotive-related industries,” the earnings report stated. “Nevertheless, its revenue remained at approximately 1.5 times higher compared to fiscal year 2019.” ANA reported for the year: Record operating income of $1.3 billion, up 73.3% YoY; International cargo revenue of $985.9 million, down 49.5% YoY; International cargo traffic volume of 3.5 billion cargo ton kilometers (CTK), down 16.5% YoY; Domestic cargo revenue of $142 million, down 6.8% YoY; and Domestic cargo traffic volume of 280 million CTKs, down 0.4% YoY. Editor’s note: All amounts have been converted to U.S. dollars.

Southwest’s cargo revenue rises 2.4%

Hawaiian’s non-passenger revenue down 3.1% in Q1; ANA Cargo full-year revenue down 46.4%

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