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.
WHAT ELSE TO READ: