American Airlines’ cargo revenue falls 1.3%

American Airlines Group today reported record quarterly revenue of $14.3 billion for the second quarter, an increase of 2% from Q2 2023. The carrier group’s cargo revenue fell 1.3% year over year to $195 million. [caption id="attachment_57133559" align="alignright" width="300"] (Photo/Al Drago/Bloomberg[/caption] Despite the record quarterly revenue, Chief Executive Robert Isom said on today’s earnings call that “our current revenue performance is not where we want it to be.” He attributed this to “an imbalance in domestic [passenger] supply and demand and our prior sales and distribution strategy.” While cargo revenue remained down in Q2, it improved from Q1, when the carrier’s cargo revenue fell 16% YoY , and from full-year 2023, when the carrier’s cargo revenue fell 34% YoY . American Airlines also reported in Q2: Operating income of $1.4 billion, down 36% YoY; Income before income taxes of $1 billion, down 41.7% YoY; Diluted earnings per share of $1.01, down 46.3% YoY; 515 million cargo ton miles, up 20.6% YoY; Cargo yield per ton mile of 37.87 cents, down 18.2% YoY; Full-year adjusted earnings per diluted share are expected to be between $0.70 and $1.30, according to the earnings report. Shares of American Airlines ( NASDAQ: AAL ) were up 4.23% from market open to $10.60 as of market close today. The company has a market capitalization of $7 billion. American Airlines ranks 29th on Air Cargo Next ’s Freight 50 list of top air cargo carriers, moving 2.9 billion cargo tonne kilometers (CTK) in 2022. Air France-KLM cargo revenue down 10% Air France-KLM Group today reported 7.9 billion euros ($8.6 billion) in Q2 revenue, up 4.3% YoY. Cargo revenue was down 10% YoY to $592.5 million. [caption id="attachment_69154" align="alignright" width="300"] An Air France 777-200 carries cargo. (Courtesy/Air France)[/caption] Air France-KLM also reported in Q2: EBITDA of $1.3 billion, down 11.9% YoY; Net income of $179 million, down 73% YoY; Moving 218,000 tonnes of cargo, up 2.6% YoY; Capacity of 3.6 billion available tonne kilometers (ATK), up 0.2% YoY; Load factor of 45.6%, up 1.1 percentage points; Unit revenue per ATK of 14.08 cents, down 5.2% YoY; The carrier attributed the reduced unit revenue to the “challenging implementation” of a cargo IT system in April and May, which had a financial impact of $16.3 million, according to today’s earnings report. However, June showed a slight unit revenue improvement. “In particular, Asia is performing well, driven by e-commerce and the Red Sea disruption ,” the earnings report stated. “In response to market dynamics, a part of the group’s full freighter capacity is being redeployed to Asia. Additionally, a block agreement was signed with China Cargo Airlines , marking a new step in cooperation and enhancing our presence in this major cargo market.” The agreement, which went into effect July 1, allows China Cargo Airlines to use Air France ’s belly capacity for shipments from Paris Charles de Gaulle Airport (CDG) to Sao Paulo-Guarulhos International Airport (GRU), according to a June release from Air France. Listed separately, Air France ranks 22nd and KLM ranks 32nd on Air Cargo Next ’s Freight 50 list, moving 3.5 billion CTKs and 2.4 billion CTKs of air cargo, respectively, in 2022. Shares of Air France-KLM Group ( OTCMKTS: AFLYY ) were up 8.78% from market open to 92 cents as of market close today. The group has a market capitalization of $2.5 billion. Southwest’s cargo revenue down 4.3% Southwest Airlines today reported record quarterly operating revenue of $7.4 billion, up 4.5% YoY. Southwest’s cargo revenue was down 4.3% to $45 million. [caption id="attachment_75093" align="alignright" width="300"] (Courtesy/Southwest)[/caption] The YoY decrease in Q2 cargo revenue comes after a positive Q1 which saw an increase of 2.4% YoY . “Our overall results ... are not where we need them to be and they are not reflective of what we are capable of delivering,” President and Chief Executive Bob Jordan said on today’s earnings call. Southwest also reported in Q2: Operating income of $298 million, down 49.9% YoY; Operating expenses of $7 billion, up 11.4% YoY; Income before income taxes of $478 million, down 46% YoY; and Diluted earnings per share of 58 cents, down 46.3% YoY. The biggest news to come out of today’s earnings call was that Southwest will implement assigned and premium seating for passenger flights. Shares of Southwest Airlines ( NYSE: LUV ) were up 5.6% from market open to $28.10 as of market close today. Southwest has a market capitalization of $16.8 billion. Editor’s note: All amounts have been converted to U.S. dollars.

American Airlines’ cargo revenue falls 1.3%

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