Airlines’ Earnings Show Continued Gains in Cargo Business, Corporate Travel Rebound

For travel, for the airlines, buffeted by virus variants, the recovery might not be a straight line.

But earnings results from major airlines show that we’re gaining ground on 2019’s pre-pandemic activity, with green shoots in business travel and the shift to cargo/freight continuing to bear fruit.

By way of example, and in evidence of the (gradual) recovery, American Airlines Group Inc saw its losses shrink a bit as travel demand returned amid the holiday season, per results posted on Thursday (Jan. 20).

No surprise: The snapback is reflected in huge gains in passenger related revenues, where that line item was $8.3 billion, compared to $3.2 billion, measured year over year. The operating loss for the most recent quarter stood at $790 million, compared to $2.5 billion last year.

Digging into the data a bit, cargo related revenues were $341 million in the most recent quarter, compared to $285 million last year.

Delta, which reported earnings earlier this month, and as noted in this space, marked its best top-line revenue showing since 2019, with total operating revenue of $9.5 billion, per a Jan. 13 announcement.

Read also: Delta Airlines Q4 Earnings Shows That Travel Still Faces A Long Haul to Recovery

Domestic passenger revenue, the company said in its own results, was 78% of 2019 levels, to $7.2 billion. Business demand continues to improve, with domestic passenger volumes approaching 60% of what had been seen pre-pandemic. Cargo revenue was $304 million, a 63% boost over December’s fourth quarter and up 24 percentage points sequentially, the company said.

United Airline’s results showed passenger revenues were $6.8 billion, roughly 69% of pre-pandemic tallies, and cargo related revenues surged to $727 million, up from $560 million last year, and fully 130% above 2019’s levels.

Some Bumps in the Recovery

None of this is to say there’s only smooth flying ahead. Business travel is recovering but in a lumpy fashion. In commentary on the current environment, Delta CEO Ed Bastian noted that “the omicron case surge is impacting business travel and international recovery the most. As meetings are canceled, planned office reopenings are postponed and countries put restrictions back in place.” The overall rate of recovery across business and passenger related travel is, in January and looking into February, at about 70% of pre-pandemic levels, where it had been 80%.

“And while the downturn in demand has been quick, we expect an equally rapid improvement once U.S. case counts begin to decline, remain confident in a strong spring and summer travel season with significant pent-up demand for consumer and business travel, both domestically and internationally. We expect the month of March to return to the recovery trajectory that we were on in December,” said Bastian.