United Airlines’ cargo sales fell 37% in the first quarter.

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The performance indicates deteriorating shipping circumstances and economic instability.

The harder they fall, the higher they climb. United carriers is the cargo king of the United States’ international passenger carriers, and it elevated its cargo business to unprecedented heights during the COVID crisis, when supply chains were destroyed and businesses required alternate transportation.

The Chicago-based carrier stated on Tuesday that cargo revenue fell 36.5% in the first quarter to $398 million, outpacing Delta Air Lines’ 28% decline. However, the results report was mainly positive overall, revealing a corporation that is still recovering from the pandemic. United Airlines (NASDAQ: UAL) reported a lower-than-expected adjusted net loss of $207 million (or 63 cents per share) on $11.4 billion in revenue.

United’s cargo revenue decline was unsurprising given that the airfreight industry has been in a depression for the past year, dragged down by high prices, overstocked retail shelves, and economic disruption from the Ukraine war. Global freight volumes were down around 5% year on year in the first quarter, while the cost of carrying products by air is 40% cheaper than a year ago. The only uncertainty was how much of a damage United would take in terms of sales.

In 2022, the airline reported cargo revenue of $2.17 billion, a 7.6% decrease from the previous year’s record of $2.4 billion.

United reported a 7.6% decrease in revenue-ton miles from the first quarter of 2022, owing to a combination of fewer weight and distance carried.

According to pricing reporting agencies, global airfreight traffic fell several points in April compared to prior weeks, when demand and rates regained some footing.

“We are closely monitoring macroeconomic risks, but demand remains strong, particularly internationally, where we are growing at twice the domestic rate.” All of these variables, according to CEO Scott Kirby, “should keep us on track to meet our full-year adjusted diluted EPS target” of $3.50 to $4.

Carriers in the United States have stated that traffic in January and February was a little light, but that they expect robust booking activity in the spring and summer.

Earlier this week, United announced its largest South Pacific network expansion in history, with 66 weekly flights to Australia and New Zealand for the next season. It also added four new international flights between Dubai and Tokyo, as well as three of its core US hubs, during the quarter. It also resumed four routes that had not been flown since the pandemic, as well as nonstop service between Shanghai and San Francisco, making it the first U.S. airline to not require a refueling stop between the United States and Shanghai since November 2020.

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