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Third quarter global air freight review

Air freight is showing strong signs of improvement across North America, as Air Cargo World reported today that American carriers witnessed strong thir...

Freddie Pierce
|Oct 27|magazine7 min read

Air freight is showing strong signs of improvement across North America, as Air Cargo World reported today that American carriers witnessed strong third quarter performance.

Air freight divisions within Delta and Southwest saw freight and cargo revenues increase by 13 and12.9 percent, respectively, while competitor American Airlines reported revenue growth at 4.8 percent.

Delta in particular has seen its freight division take off. Company officials said that profits rose to $30 million year-over-year, and that Delta’s freight operating revenue increased to $257 million this quarter.

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Also reporting strong numbers in the American air freight market is United Parcel Service. The company reported a higher third quarter profit, with increased rates, cost cuts and technology improvements overcoming a stagnant economy.

According to a report in Reuters on UPS, the company claims that “the U.S. economy appears to have stabilized and is growing slowly, after concern about a possible double-dip recession stifled consumer demand earlier this year.”

While the revenue growth is certainly good news for air freight companies, expenses are growing at a staggering rate. Fuel costs for American Airlines increased by over 40 percent year-over-year, up to $3.15 per gallon from $2.24 per gallon last year.

Those expense increases cost American Airlines $653 million more this year, and was perhaps the biggest factor in the company’s $162 million net loss this quarter.

Those losses are shared by some global air freight companies. Hong Kong International Airport, the world’s busiest air cargo hub, reported a 6.1 percent decline in September volume, thanks in large part to sluggish European and U.S. economies.

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