Air France-KLM, CMA CGM see double-digit cargo revenue drop

Most airlines reported in their second-quarter earnings that overall revenue was up but cargo revenue was down, a result of increased capacity and decreased demand. While the resurgence of passenger travel added to cargo capacity burden with more belly capacity, passenger revenue made up for the cargo loss — and more — for the airlines. Air France-KLM cargo revenue drops 33.9% Air France-KLM Group had a good quarter despite a drop in cargo tonnage and revenue. While the company overall posted Q2 revenue of 7.6 billion euros ($8.4 billion), a 14.1% increase year over year, its cargo operations brought in revenue of $668.7 million, a YoY decrease of 33.9%. Year to date, the company’s cargo operations saw revenue of $1.4 billion, a YoY decrease of 30%. [caption id="attachment_57065295" align="alignleft" width="300"] An Air France Cargo B777 takes off. (Photo/Air France)[/caption] “The resumption of passenger travel resulted in an increase in available tonne kilometers of 6.5% versus the second quarter of 2022,” today’s earnings report said. “Last year, the second quarter still showed a strong demand and therefore the traffic decreased year over year by 8.5%. “As global economic growth is slowing down, container prices for sea freight declined and therefore demand for air cargo softened. The load factor was 7.3 points below 2022 and, due to the increased belly capacity, the yield declined as well, resulting in a decrease in unit revenue per available tonne kilometer of 42.1% against a constant currency.” Increased overall revenue in Q2 was driven by a higher passenger capacity, a higher passenger load factor and a higher passenger yield, according to the report. Lower jet fuel prices and a higher yield to compensate for inflation also factored into the company’s increased revenue. Alaska Air Group’s cargo revenue increases Alaska Air Group , which operates Alaska Airlines and Horizon Air , recorded $2.8 billion in operating revenue for Q2, the highest quarterly total in company history. The group’s revenue increased 7% YoY. Unlike many competitors, Alaska Air Group also saw a positive yield from cargo operations, which earned $70 million in revenue in Q2, an increase of 8% YoY. The lion’s share of revenue came from passenger revenue. “We chose to prioritize reliability, which is imperative to restoring stability, improving predictability for our guests and employees, capturing record revenue and serving as the foundation for our long-term profitable growth,” Alaska Air Group President and Chief Executive Ben Minicucci said in Tuesday’s earnings report. In Q2, Alaska Air Group received eight 737-9 aircraft and six E175 aircraft, bringing the totals in the Alaska and Horizon fleets to 51 and 39, respectively. The group also announced new routes to Nassau, Bahamas, from Los Angeles and Seattle, Wash., and to Guatemala City, Guatemala, from Los Angeles. CMA CGM revenue down 36.9% French shipping and logistics firm CMA CGM Group posted Q2 revenue of $12.3 billion, a 36.9% YoY decline. Downward trends from Q1 remained, resulting from deteriorated market conditions in the transport and logistics industry, the company said in its earnings report today. [caption id="attachment_97045" align="alignright" width="300"] (Photo / CMA CGM)[/caption] “As expected, our industry continued to normalize in the second quarter and, despite difficult market conditions, our performance remains robust,” CMA CGM Chair and Chief Executive Rodolphe Saade said in the earnings report. “In recent years, we have significantly strengthened our two strategic pillars: transport and logistics. On that basis, our group will pursue its transformation, as it continues to expand and to integrate recently acquired subsidiaries, while stepping up investments to decarbonize its activities.” Revenue from “other activities,” which include port terminals and CMA CGM Air Cargo , fell to $474 million, a 5.3% YoY decrease. EBITDA was $50 million, down 61.9% YoY, mainly due to “lower volumes in port terminals and a less buoyant air transport market,” according to the report. CMA CGM is poised to take control of Bollore Logistics after Bollore Group signed a share purchase agreement July 11 to sell 100% of the logistics firm to the shipping company. Hawaiian Airlines sees modest revenue increase Hawaiian Holdings , parent company of Hawaiian Airlines , reported Q2 revenue of $706.9 million, a 2.2% YoY increase. Most of the increase came from passenger revenue, which increased 4.5% YoY, while other revenue, including cargo, decreased 16.8% YoY. Passenger “demand remains strong throughout our network, and we have recently seen a significant increase in bookings by travelers in Japan, an important geography that has trailed in the recovery of the overall market,” Hawaiian Airlines President and Chief Executive Peter Ingram said in Tuesday’s earnings report. In Q2, Hawaiian completed the transition of A330 aircraft maintenance from a vendor-managed services agreement to internal resources. Self-managed maintenance will allow Hawaiian to exercise greater control over its day-to-day operation and control costs more effectively as the operation grows with the introduction of A330 freighter aircraft, the earnings report said. Southwest Q2 cargo revenue flat Dallas-based Southwest Airlines announced Q2 revenue of $7 billion, a 4.6% YoY increase. The company’s freight revenue was $47 million, the same as in Q2 2022. However, freight revenue for H1 was $87 million, a 2.2% YoY drop. “We generated all-time record quarterly operating revenues, produced a very strong operational performance and delivered healthy net income,” Southwest President and Chief Executive Bob Jordan said in Thursday’s earnings report. “Based on current revenue and cost trends, we expect record operating revenue and a profitable outlook again for third quarter 2023 and continue to expect year-over-year margin expansion for full year 2023.” All Nippon international, domestic cargo ops down Tokyo-based ANA Holdings , which operates All Nippon Airways , reported quarterly operating revenue of $3.3 billion, an increase of 31.6% YoY. However, revenue for international cargo operations was $270.6 million, down 59.7% YoY, and revenue for domestic cargo operations was $36.9 million, down 10.4% YoY. [caption id="attachment_67542" align="alignleft" width="300"] (Photo/ANA)[/caption] “For international cargo, despite efforts to capture demand between North America and Asia/China, cargo volume was approximately 80% … compared to the same period last year, due to a decline in demand among major industries, including semiconductors, electronics and automotive-related industries,” today’s earnings report said. “Despite the downward trend, unit price was about 1.8 times higher and revenue was 1.5 times higher compared to fiscal 2019 levels.” These earnings represent the first time in four years that ANA has had a profitable quarter ending June 30. “ANA’s performance this quarter reflects our strategy to be positioned for sustainable growth in domestic and international travel after the restrictions were relaxed,” ANA Chief Financial Officer Kimihiro Nakahori said in the report. Join Air Cargo Next for the second annual Air Cargo Tech Summit on Monday, Sept. 18, and Tuesday, Sept. 19, at the Brussels Marriott Hotel Grand Place in Belgium. For more information on the summit and to register, click here .

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