en.Wedoany.com Reported - United Airlines' second-quarter cargo revenue increased 22.6% year-over-year to $527 million, driven primarily by a sharp rise in air freight rates due to disruptions related to the Iran conflict, as well as the strongest cargo volumes since the pandemic-fueled boom in 2020.
Global cargo demand grew 4% in the first half of the year, with a 7% increase in June, while capacity remained largely flat. Since the start of U.S.-led military operations against Iran, aircraft cargo space in the Middle East has fallen by more than 12%, as passenger and cargo airlines suspended or reduced operations due to ongoing war risks, putting upward pressure on prices. Spot rates have risen 35% to 40% year-over-year over the past two months. Since hostilities began on February 28, the combined average of spot and contract rates has increased by 17%.
Rates could rise further in the coming months after the U.S. and Iran broke a fragile ceasefire and began launching military strikes against each other in the Persian Gulf region. Shipping consultancy Xeneta forecasts that rates in 2026 could be 5% to 15% higher than last year.
According to financial results released by United Airlines (Nasdaq: UAL) on Wednesday, the company transported nearly 347 million pounds of cargo in the quarter ending June 30, the highest level for that period since the pandemic disrupted supply chains in March 2020. United and other airlines at the time responded by deploying idle passenger aircraft as auxiliary freighters, helping shippers clear manufacturing backlogs as ports, railways, and trucking systems slowed to a trickle.
Among the goods transported by United in the quarter were over 9 million pounds of medical cargo and 232,000 pounds of military equipment.
United said higher yields were the main driver of strong cargo performance. Chief Commercial Officer Andrew Nocella said on a conference call with analysts that most of the growth in cargo revenue was related to yields rather than volumes, a trend expected to continue into the third quarter.
Delta Air Lines reported second-quarter cargo revenue of $294 million last week, up 39% year-over-year. First-half cargo revenue grew 24% to $521 million.
Overall, United raised its full-year earnings guidance after reporting adjusted earnings per share of $1.99 (beating market expectations) and revenue growth of 16% to $17.7 billion. Net profit was $805 million, down more than 17% year-over-year, as a surge in jet fuel prices due to reduced oil flows through the Strait of Hormuz led the company to spend $2.3 billion more on fuel than previously expected.
