Delta reports drop in cargo ton miles for March

Delta Air Lines reported 178.5 million air cargo ton miles in March 2019, a 5.4 percent drop compared to March 2018’s 188.8 million. Year-to-date, the airline reported a 3.2 percent decrease from 2018’s numbers.

Cargo ton miles represent the total number of tons of cargo transported during a reporting period, multiplied by the total number of miles cargo is flown during that same period.

The numbers came from Delta’s operating performance report for March 2019.

“Delta’s March figures are the first monthly numbers we are seeing from any carrier. At 5.4 percent down, they may be disappointing but are not too surprising,” FreightWaves Air Cargo Market Expert Jesse Cohen said. “They are in line directionally with other U.S. passenger carrier figures just reported by the Airlines for America for February. The composite was down 6.6 percent in February and 3.3 percent in January.  

FreightWaves Air Cargo Market Analyst Cathy Roberson agreed that the drop in cargo ton miles was consistent with market expectations.

International Air Transport Association data indicates that the slowdown began in March 2018, with capacity and volume reaching an equilibrium. From that point onward, capacity has been outpacing volume, according to Roberson.

“Part of [the decline] is the weakening global economy overall, the softening Chinese economy, threats of tariffs and unresolved trade disputes,” Cohen said. “All air carriers have been seeing softer year-over-year volumes. Air cargo is often a leading indicator of economic trends and can sometimes move a few percentage points at a time.”

Roberson also noted that Delta has major hubs in Europe, meaning its business could be affected by both Brexit and the manufacturing slowdown in Germany.

Delta’s other performance indicators, including revenue passenger miles (RPMs) and available seat miles (ASMs), came in positive. This, coupled with $1.3 billion in share repurchases, helped propel Delta’s stock upward after the announcement Tuesday, April 2.

The company’s stock was up over 6 percent at 2:30 p.m. Tuesday.