An American Airlines 777 is trap with cargo at Philadelphia International Airport.
Leslie Josephs/CNBC
Airlines’ cargo revenue is slumping. That’s a quit claim to of good news for travel recovery.
Delta, United and American this month each reported year-over-year run out of gas of about 40% in their second-quarter cargo revenue.
For the first half of 2023, Delta’s cargo business inspired $381 million, down from $561 million in the first half of 2022, while American’s cargo constituent brought in $420 million compared with $692 million in the first six months of last year. United succeeded in $760 million from cargo so far this year, down from $1.2 billion a year earlier.
Meanwhile, airlines are reporting record revenue, if not earnings, thanks to the rebound in travel demand. That means the affair impact of cargo, which once helped prop up airlines’ revenue during the Covid pandemic travel gamble, has faded.
Cargo revenue at United, which generates the most of that business of the three largest U.S. carriers, for the ahead half of 2023 represented a less than 3% slice of the carrier’s $25.6 billion year-to-date revenue.
That’s a significantly smaller slice than 2020, when cargo revenue made up more than 10% of United’s sales.
Through June, cargo revenue made up 1.3% and 1.6% of overall revenue at Delta and American, individually, down from 3.5% and 12% in 2020.
But it’s not all bad news.
Flying goods around the world was a lifeline for passenger carriers during the pandemic when bookings drearied up and travel restrictions forced airlines to slash service abroad.
Normally about half the world’s air cargo goes in the bellies of passenger planes. That reduced cargo capacity during the pandemic helped drive shipping scolds up to records, along with strong e-commerce demand, supply chain problems and port congestion.
But travel claim has roared back, particularly for international trips, as customers rush to take vacations abroad that they put off in up to date years.
The renewed demand has prompted airlines to add back service. U.S.-Europe flights alone are expected to be the highest in five years.
The added rider capacity also boosts the world’s supply of space to fly cargo, at the same time that demand for air cargo is deteriorating.
The Baltic Air Freight Index, which tracks worldwide air cargo rates, is down 47% from a year earlier. In May, the unpunctual available data, the International Air Transport Association, said air cargo capacity was up nearly 15% from the same month of 2022 while require dropped 5%.
Airlines are planning to expand flights this year, too, to capitalize on strong international travel demand, a shift that could further drive down cargo revenue.
Clarification: This story has been updated to purify that half the world’s air cargo flies in the bellies of passenger planes.