Alaska, Delta, United Q3 reports point to uncertain growth trajectory in US cargo

Of the three major American carriers to publish third-quarter results so far, only Alaska Airlines Cargo saw its cargo revenues increase, up 3 percent, year-over-year, to US$31 million – a fraction of its growing passenger revenue. Meanwhile, United registered a 4.7 percent decline in revenues, y-o-y, to $224 million and, as previously reported, Delta continued its losing streak into the quarter, with revenues falling 15 percent, y-o-y, to $167 million.

In all three cases, cargo revenues amounted to a small percentage of overall earnings. Alaska, for example, pulled in $1.32 billion in passenger revenues of the same quarter, suggesting that losses in cargo are easily offset elsewhere. While Q3 cargo revenue numbers were up at the Seattle-based carrier, nine-month measurements were down 1 percent to $82 million, suggesting a slow start to the year. Alaska did not post traffic data.

United’s traffic presented a different picture, with cargo tonne miles for Q3 up 11.6 percent, despite the aforementioned 4.7 percent decline in revenues. United cited lower fuel costs in relation to a decline in total operating expense as a reason for the results, suggesting that there is more to the story than just low oil prices.

The increased volumes at United are in line with global trends. Many of the world’s major cargo carriers and airports have now reported their September results, and the news is almost uniformly positive. Cargo traffic for the month was up 15.7 percent, y-o-y, for United and up 9.8 percent, y-o-y, for American Airlines.

These gains occurred despite a strong dollar that continues to constrain outbound U.S. airfreight. U.S. Census Bureau data, cited by IATA, found that “16 of the top 20 air cargo markets for the U.S. saw air export volumes from the U.S. decline in annual terms in the first seven months of 2016.”