US airlines report Q3 dip in cargo yields

American Airlines, Delta Air Lines and United Airlines in the past week reported a year-over-year decrease in cargo yields for Q3, but volumes remain above pre-pandemic levels. With the winter season, the U.S.-based airlines plan to further expand connectivity, particularly for long-haul flights. Capacity changes have been a turning point for overall cargo volumes and high jet fuel rates have affected operating expenses, which all three carriers noted in their third-quarter earnings statements. American and Delta reported negative impacts from natural disasters, like Hurricane Ian and flooding in the Dallas-Fort Worth area, as factors affecting Q3 results. [caption id="attachment_57065900" align="alignright" width="350"] Photo / Bloomberg[/caption] Cargo earnings American Airlines reported $279 million in cargo revenue, with a total operating revenue of $13.5 billion for Q3, a quarterly record, according to the earnings statement. Cargo revenue decreased 15% quarter over quarter and 15.9% YoY. Of American’s $12.5 billion operating expenses in Q3, the largest expense was fuel and related taxes, totaling $3.8 billion or around 30%, followed closely by salaries, wages and benefits at $3.4 billion, or around 27% of total expenses. Delta, meanwhile, saw Q3 operating revenue of $12.8 billion, 3% higher than September 2019, the highest revenue and unit revenue quarter in the carrier’s history, Chief Executive Ed Bastian said during the company’s earnings call. Cargo revenue clocked in at $240 million, growing 11% QoQ and 27% compared with Q3 2019. The carrier has seen lowering yields with a global return of capacity and does not expect cargo growth to maintain its unusually high pace into 2024, Delta President Glen Hauenstein said during the earnings call. United’s total net income for Q3 reached $942 million with a total operating revenue of $12.9 billion, 13.2% higher than Q3 2019. Cargo revenue was $498 million for Q3, 4% lower YoY and 76% higher compared with 2019. Cargo volumes fell for United “consistent with expectations relative to pandemic highs,” and were 90% higher than in 2019, Andrew Nocella, executive vice president and chief commercial officer, said during the company’s Q3 earnings call. Winter flights United is focusing on resuming its Pacific capacity in the next quarter, excluding China, with specific focus on Japan, Nocella added. The carrier reported 59% lower capacity in the Pacific region for Q3 compared with pre-pandemic levels but continues to experience “much stronger cargo yields,” he said. In September, United announced it would share capacity with Emirates for passenger and cargo operations, with plans to add a Newark/New York (EWR) to Dubai (DXB) route in March. United will begin flights between Washington Dulles (IAD) to Cape Town (CPT) on Nov. 17 and will begin service between Brisbane (BNE) and San Francisco (SFO) this winter, as well, Nocella added. For the winter season, Delta is also adding to its long-haul network. The airline resumed its nonstop service between Minneapolis-St. Paul (MSP) and Incheon Airport (INC) the week of Oct. 3 and will add flights from Los Angeles (LAX) to Tokyo Haneda (HND) on Oct. 30. American executives shared that the airline plans to increase its long-haul destinations for the winter as travel restrictions ease related to COVID-19 but did not mention which destinations. Jet fuel remains costly All three carriers saw dramatic increases in their jet fuel expenses, according to earnings reports. While jet fuel reached its peak this summer, rates remained high in July , August and September . During Q3, United paid $3.81 per gallon, American paid $3.73 per gallon and Delta paid $3.41 per gallon. Compared with 2019 rates, fuel expenses were 63% higher for United, 97% higher for American and 48% higher for Delta. Hurricane impact Delta and American saw cuts on domestic connectivity and operating revenue because of Hurricane Ian and Hurricane Fiona. Delta reported a $70 million impact on operating revenue from Hurricane Ian, which it splits evenly between third and fourth quarters, Delta’s Hauenstein said. “Despite a challenging operating environment — with hurricanes in Florida and the Caribbean and flooding in Dallas-Fort Worth — American restored its operating reliability to pre-pandemic levels in the third quarter,” according to today’s release. United’s only operational impact from Hurricane Ian was its completion factor in September, according to the company’s earnings report. United Airlines, American Airlines and Delta Air Lines ranked No. 21, No. 32 and No. 34, respectively, in Air Cargo World’s Freight 50 ranking of the world’s top carriers, based on 2020 tonnage. Join Air Cargo World for our next webinar, “Dangerous goods in focus: Shoring up air cargo logistics,” on Tuesday, Nov. 15, at 11 a.m. ET. Click here for more information and to register .

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