American Airlines achieved record cargo revenue in the fourth quarter while absorbing an adjusted net loss for the enterprise of $921 million.
Revenue from cargo operations jumped 57.9% to $341 million and doubled to $1.3 billion for the full year versus 2019, American (NASDAQ: AAL) reported Thursday.
The numbers are impressive but pale in comparison to those of United Airlines. The Chicago-based rival generated $727 million in fourth-quarter cargo revenue and $2.4 billion for all of 2021, according to financial results released Wednesday. Delta Air Lines (NYSE: DAL), the other major U.S. international carrier, also set a record for cargo revenue — $304 million in the fourth quarter and $1 billion for the calendar year — and lagged United by a wide margin.
The difference among the three carriers is underscored by cargo’s share of total revenue. At United (NASDAQ: UAL), cargo represented 8.9% of total operating revenue, while at American and Delta the share was 3.6% and 3.2%, respectively. Cargo as a percentage of total revenue is down at United from the peak of 27.3% at the height of the pandemic, when passenger flying virtually disappeared, but is nearly four times greater than the historic average going back many years.
All the airlines rode the market tailwind created by strong demand, supply chain disruptions on the sea and land, and tight supply of aircraft. United separated itself with targeted use of ad hoc charter flights for cargo customers, more extensive international destinations and strong ties to freight brokers.
American Airlines’ fourth-quarter operating revenue was $9.4 billion, the highest since the start of the pandemic, but still down 17% on a 13% decline in seat capacity versus the same period in 2019. The smaller loss ($1.44 per share) and revenue figures coincided with analysts’ expectations and was further evidence of the airline’s recovery from the crisis. Domestic leisure travel is strong, but the carrier is still waiting for corporate and international travel to bounce back. American benefited from fewer omicron-related flight cancellations because it proactively reduced capacity last month and offered bonuses to employees to work through the holidays.
For the full year, American lost $5.4 billion on an adjusted basis.
The Fort Worth, Texas-based airline’s guidance for the first quarter of 2022 is for an 8% to 10% reduction in passenger capacity relative to 2019, with revenue worsening from the fourth quarter to 20% to 22% below the two-year benchmark, because of weather delays and slower bookings due to the omicron outbreak.
Click here to read more FreightWaves/American Shipper stories by Eric Kulisch.
WHAT ELSE TO READ:
In air cargo bull market, United flies dog food and mayo
Delta Cargo celebrates diamond anniversary with $1B in revenue
Brokerage Compliance Symposium
The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
F3 Awards Dinner
The night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
F3: Future of Freight Festival
Industry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowThe night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowIndustry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now