American Airlines has reported a 31% decline in cargo revenue in the third quarter. This translates to $193 million for the term ending in September 2023. According to Stattimes, cargo ton-miles increased by 2.5% to 490 million from 478 million the previous year.
A tough market
According to the airline, there are two factors to be blamed for the tough market: prolonged contraction in cross-border shipping volumes and economic uncertainty.
American Airlines received $613 million in cargo revenue for nine months ending September. That’s a significant drop of nearly 40% compared to last year.
According to FreightWaves, the results are not out of the ordinary in an air cargo market that has experienced a drop in volume by 8% to 10% for the last year and a half. Regarding airfreight shipping prices, there is a massive drop of nearly half of the figures seen in 2022.
Change in conditions
“We are operating in a different market environment than we have been for the last couple of years,” says American Airlines Cargo president Greg Schwendinger.
“Lower deck capacity continues to grow, driven by the increase in international passenger demand – great news for the wider industry – and demand continues to be relatively weak, as consumer spending transitions from products to services.”
Schwendinger notes that the change in conditions has not come as a surprise to anyone. “But possibly the extent of the change has been greater than people hoped.”
He told the LoadStar that while top-line numbers reflect the challenging market conditions, there is still a silver lining. “We are encouraged to be registering consistent share growth across our network and with our largest customers and have recorded quarter on quarter and year on year revenue growth which exceeds our peers. We look forward to finishing the year strong.”
The fleet under pressure
STAT Media Group reports that the cargo business has been under pressure with fewer large jets in the fleet. There is also a smaller Asia-Pacific network, contributing to the constraints.
The airline retired all of its Boeing 767 medium widebody aircraft at the start of the COVID-19 pandemic. This includes its Airbus A330s. Schwendinger says that American Airlines Cargo has about 30 fewer jet airliners flying.
The CEO is hopeful things will turn out better next quarter. Schwendinger says: “We’ve doubled down on our efforts to support our customers and are using our expanded network to meet their needs better.”
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