Domestic airlines see mixed cargo results
The main domestic U.S. carriers showed mixed cargo results during the first quarter, with American Airlines and Southwest experiencing revenue increases, while United saw cargo activity drop off.
American Airlines finished the quarter with cargo operating revenues of $206 million, a 32.2-percent increase, year over year. Cargo ton miles rose 11.9 percent to 560 million, but cargo yield per ton mile fell by 6.3 percent to $36.88.
Overall, American achieved a net profit of $480 million in the first quarter, which officials said was a record.
At Southwest, cargo operating revenue ticked up 2.6 percent, year-over-year to $40 million. Overall, the carrier turned in $4.17 billion in revenue during the first quarter, a 2-percent increase over the first quarter of 2013. Passenger revenue increase of 2.5 percent accounted for the majority of the revenues, but both cargo and passenger traffic helped Southwest achieve a record of $126 million in first-quarter income.
United saw cargo operating revenue fall by 7.9 percent, year-over-year, to $209 million. This drop in revenue was accompanied by an uptick in activity; cargo ton miles increased during the period by 7.1 percent to 585 million miles.
As a whole, United reported a first-quarter loss of $489 million. Officials blamed $200 million of the combined loss on weather issues. Total revenue ticked down 0.8 percent to $8.7 billion.
"This quarter's financial performance is well below what we can and should achieve. We are taking the appropriate steps with our operations, network, service and product to deliver significantly better financial results," United’s President and Chief Executive Officer, Jeff Smisek, said in a statement. "The entire United team is sharply focused on accomplishing the goals we have laid out for long-term financial success."
Delta reported Wednesday that its cargo revenue fell 9 percent during the first quarter, to $217 million, due to lower yields and volumes.
UPS also blamed a drop in profit on the weather. The integrator turned in total operating profits of $1.5 billion, a $106-million drop from the first quarter of 2013. At the same time, UPS officials said average daily shipments, propelled by e-commerce, increased by 4.2 percent.
Domestically, UPS experienced a 1.5-percent increase in Next Day Air revenue, finishing the period at $1.59 billion. Deferred air products increased 5.3 percent to $855 million. Total international package revenue rose by 5 percent, year-over-year, to $3.13 billion. Average daily package volumes increased across the board, rising by 6.3 percent and 1.5 percent for Deferred and Next Day Air, respectively; total international package volumes rose by 7.9 percent to 2.58 million pieces. Revenue per piece, however, declined across the board. Total international package per-piece revenue fell by 2.1 percent, as domestic next-day air rates fell by 0.9 percent. Deferred revenues fell by 1.7 percent.
"During the quarter, the momentum of the underlying business was masked by the disruption of inclement weather," UPS’ Chief Financial Officer Kurt Kuehn, said in a statement. "We are encouraged by the positive trends in our business and expect the remainder of the year to perform as we originally guided. However, due to the challenging start to 2014, we anticipate diluted earnings per share to be at the low end of our full-year guidance range.”