United Airlines' cargo revenue surged 22.6% to $527 million in the second quarter, driven by high yields and volumes not seen since the pandemic, as the Iran conflict tightened air cargo capacity and pushed rates higher, according to FreightWaves.
Record Cargo Revenue and Volumes
United Airlines (NASDAQ: UAL) transported nearly 347 million pounds of cargo during the quarter ended June 30, the most for the period since the pandemic disrupted supply chains in March 2020. Among the commodities hauled were over 9 million pounds of medical shipments and 232,000 pounds of military equipment. United and other airlines had responded to the pandemic by deploying idle passenger aircraft as auxiliary cargo jets, a pattern echoed in the current crisis. The carrier's adjusted earnings per share came in at $1.99, beating consensus expectations, and total revenue rose 16% to $17.7 billion. However, net income dropped more than 17% to $805 million, largely due to an extra $2.3 billion spent on fuel because of the spike in jet fuel prices tied to decreased oil flows through the Strait of Hormuz.
Yields Drive Growth Amid War Disruptions
Higher yields were the main contributor to the strong cargo performance, United said. Chief Commercial Officer Andrew Nocella stated on an analyst call: “Most of the gains in cargo were yield related, not volume related. I expect that to continue into Q3 as well.” The yield pressure stems from capacity constraints. Global cargo demand grew 4% in the first half of the year and surged 7% in June, while capacity barely changed. However, shipping space on aircraft fell more than 12% in the Middle East since the U.S.-led military campaign against Iran began, as passenger and cargo airlines suspended or reduced operations due to ongoing war risks. Those conditions pushed spot rates up 35% to 40% year over year in the previous two months. Since the start of hostilities on Feb. 28, the combined average of spot and contract rates has increased 17%.
| Metric | Value | Change/Context |
|---|---|---|
| United cargo revenue (Q2) | $527M | +22.6% YoY |
| United cargo volume (Q2) | 347M lbs | Highest since Q2 2020 |
| Global cargo demand growth (Jan-Jun) | 4% | 7% in June alone |
| Middle East air cargo capacity drop | >12% | Since U.S.-Iran campaign |
| Spot rate increase (last 2 months) | 35-40% | YoY |
| Combined spot/contract rate increase (since Feb 28) | 17% | — |
| United net income | $805M | -17% vs. prior year |
| Additional fuel cost | $2.3B | Due to jet fuel spike |
Delta Air Lines reported similar strength: second-quarter cargo revenue of $294 million, up 39% from the prior year, and first-half cargo revenue up 24% to $521 million.
Implications for Shippers and Forwarders
Shippers and freight forwarders should prepare for continued upward pressure on air cargo rates. Andrew Nocella expects the yield-driven trend to persist into Q3. Xeneta now predicts rates in 2026 could be 5% to 15% higher than last year, with further upside if the U.S.-Iran ceasefire breaks down—as has already occurred after the shaky ceasefire collapsed and military strikes resumed in the Persian Gulf. The capacity crunch in the Middle East is likely to spill over to other trade lanes as aircraft are re-routed or withdrawn. United's strong volume, particularly in medical and military shipments, underscores the critical nature of air freight for time-sensitive goods.
Watch List
Operators should monitor the following factors that could alter the situation:
- U.S.-Iran ceasefire status: Further hostilities could deepen capacity losses and drive rates even higher.
- Jet fuel prices: The $2.3 billion extra fuel cost for United highlights the volatility; any disruption in Strait of Hormuz flows will spike costs and potentially reduce airline profitability and capacity.
- Airline capacity adjustments: Passenger and cargo carriers may further reduce Middle East operations or redeploy capacity to other regions, affecting global air freight availability.
- Xeneta rate forecasts: The predicted 5-15% increase for 2026 may be revised upward if the conflict escalates.
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