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United Airlines’ cargo business softens in Q2 as company turns profit

Adjusted net income of $471M achieved despite flight disruptions, high fuel prices

Eric Kulisch
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United Airlines climbed to its first profit in two years, but fell short of Wall Street expectations. (Photo: Jim Allen/FreightWaves)

(UPDATED July 21, 2022, 6:20 p.m. EST with comments from earnings call)

Cargo revenue growth at United Airlines decelerated in the second quarter but was barely noticed as a surge in passenger demand pushed the carrier to its first profit since the pandemic despite high fuel costs. 

United (NASDAQ: UAL), which has led U.S. carriers in cargo the past couple years, generated $574 million in cago revenue for the June quarter, a drop of 5.3% from the 2021 period but still 95% above the pre-pandemic level, according to results posted after Thursday’s market close. During the first half, cargo revenue topped $1.2 billion, $98 million above last year’s total and 107% better than in 2019.

Cargo yield remained 107% above the pre-pandemic benchmark.


“As the industry pulls back up to normal passenger schedules, we expect cargo yields will decline in the future months, but remain solidly above 2019 levels. I want to also note that our cargo volumes remained strong and are only constrained by available space now being used by passenger luggage,” Chief Commercial Officer Andrew Nocella said on a call with analysts.

There is little sign of a drop in cargo volume that would signal a recession, he added.

In 2021, United Cargo received $2.4 billion in revenue. The figure could still be achieved with a strong second half, but logistics experts say demand for international freight transportation is more muted this year because of adequate retail inventories and slower consumer spending.

United’s first-quarter cargo sales were $627 million, 26% more than in 2021.


Rival Delta Air Lines’ (NYSE: DAL) cargo business saw its best second quarter in history with $272 million in revenue, a 46% jump from before the pandemic and 8.4% above 2021. For the first half, Delta Cargo pulled in $561 million in revenue.

United recorded adjusted net income of $471 million behind record second-quarter operating revenue of $12.1 billion. Adjusted operating margin was 8.2% and the company said it expects a full-year margin of 9%.

Management said the pandemic recovery in passenger travel will more than offset a slowing economy but acknowledged operational challenges, record fuel costs and a potential recession presented a risk to returns.

United in recent weeks has trimmed its schedule by 15% to prevent more flight cancellations and delays after being caught short on pilots as demand soared. Airport congestion has also slowed operations. The cutbacks impacted United’s top-line potential and increased costs.

Earnings per share of $1.43 were below analysts’ consensus of $1.88. Flight reductions contributed to higher costs – $283 million above the forecast by Cowen investment bank. United cut capacity at its Newark, N.J., hub alone by 12% because it had too many flights scheduled at an airport that is also undergoing runway resurfacing, terminal construction and air traffic control issues.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, Eric was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at [email protected]