A late-season updraft in market demand slowed the decline in cargo revenue last year at United Airlines, which reported Monday that shipment sales fell 14.8% during the fourth quarter to $402 million.
United (NYSE: UAL) said full-year cargo revenue was $1.5 billion, down 31% from the prior year. In 2022 and 2021, United topped $2 billion in cargo revenue when global supply chain dislocations fueled demand for air transport.
Cargo-ton-miles, a measure of cargo traffic by distance, increased 16.9% to 894 million, indicating that lower rates hurt the top line even as United was able to fly to more destinations with the return to near-full capacity on international routes following the COVID crisis.
Economic normalization after the pandemic and Russia’s invasion of Ukraine sent the air logistics sector into an 18-month downturn that finally turned into positive year-over-year growth over the final four months of 2023. November and December were the best months of the year, with cargo volumes up 8% to 9% from the same period in 2022.
United outperformed Delta Air Lines, which saw fourth-quarter cargo revenue decrease 24% y/y to $188 million.
Overall, United recorded $13.6 billion in revenue for the quarter, up 9% from the previous year, and net income of $600 million on strong travel demand, solidly beating Wall Street estimates. Net income was down 29% from the prior year.
But the airline projected it will lose 35 cents to 85 cents per share in the first quarter of 2024 because 79 Boeing 737 MAX 9 aircraft are grounded while the Federal Aviation Administration continues to evaluate the type’s safety following the blowout of a false door section on an Alaska Airlines flight this month. United said it expects the aircraft to be out of service for the entire month of January. United’s stock was up nearly 6% in after hours trading.
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