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Delta Air Lines’ cargo revenue retreats in soft freight market

Higher operating expenses push carrier to $363M loss in Q1

IAH Airport Houston, TX

Cargo revenue at Delta Air Lines dropped 28% in the first quarter from a year ago, mirroring weakness in shipping markets caused by a sputtering global economy and fewer orders for hard goods amid high inflation, a war in Ukraine and bloated retail inventories.

Delta said Thursday cargo revenue was $209 million in the first quarter.

Delta’s business carrying cargo in the lower hold of passenger aircraft exploded when the pandemic wiped out most air travel and disrupted supply chains, creating heightened demand for air transport. Cargo revenues in 2022 topped $1 billion, setting a record even though sales slid over the remainder of the year from the first-quarter high of $289 million and airlines’ typical fall spike in bookings failed to materialize.

The air cargo market’s return to normal dynamics has continued this year, with volumes down between 4% and 8% and rates lower by more than a third compared to last April, according to market intelligence firms. 

Delta’s (NYSE: DAL) first-quarter cargo revenue in 2019, before the pandemic, was $192 million.

Last month, Delta Cargo moved into an enhanced refrigerated warehouse at JFK airport in New York to handle more pharmaceutical and perishable business.


Overall, the Atlanta-based carrier reported a $363 million first-quarter loss in its earnings report, as high fuel and labor costs outpaced a 36% jump in revenue to $12.8 billion. Weather-related delays also increased operating expenses.

The first quarter is traditionally the slowest travel period for airlines.

Excluding the cost of the pilot bonuses and other one-time items, Delta said it would have earned $163 million.

Management said travel demand remains robust despite inflationary pressures, rising layoffs in the tech sector, recent bank failures and economic uncertainty. The company forecast record revenues for the second quarter and 15% to 20% revenue growth for the full year, along with stronger profits. A big assumption is that international travel will boom this summer as more destinations become available after pandemic restrictions were lifted, especially in Asia.

Analysts say long-term bookings appear to be strong, but there are concerns over recent data showing domestic bookings are tailing off and American Airlines (NASDAQ: AAL) issuing pre-release guidance Wednesday that profits could be small for the quarter.

Airlines have lower flying capacity than anticipated because of difficulties rebuilding staff after the pandemic downturn, understaffing in the air traffic control system and supply chain glitches slowing delivery of new aircraft. The tight supply has contributed to high fares. Delta said it expects to increase seat capacity by about 15% this quarter.

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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. In December 2022, he 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. Eric is based in Portland, Oregon. He can be reached for comments and tips at [email protected]