United Airlines plans to impose a market disruption surcharge on cargo, as its Q1 freight revenue declines against the trend.

According to reports, United Airlines' cargo division (stock code: UAL) has already notified all shippers last week, clarifying that the surcharge is intended to cover the increased comprehensive costs of global operations, including the surge in aviation kerosene prices and other related expenses due to the conflict in Iran. Unlike the recent adjustments in fuel surcharges by multiple logistics companies, United Airlines' fee encompasses multiple cost factors and is not solely tied to fuel costs.

Aviation kerosene is the second-largest expense for airlines, following labor expenses. Since the U.S. and Israel took military action against Iran on February 28, global aviation kerosene prices have nearly doubled, exerting significant pressure on the air cargo industry. Stephanie Robe Kramer, a spokesperson for United Airlines Cargo, stated that costs from suppliers and partners are continuously rising, coupled with changes in the overall market environment, leading to escalating operational costs for the airline's cargo business. The surcharge is a response to multiple external pressures across the entire air cargo supply chain and is not driven by a single factor.

Financial report data reveals that United Airlines' first-quarter cargo revenue was $422 million, a decrease of 1.6% year-over-year. This performance far exceeded market expectations, especially considering that the global air cargo market grew by approximately 6.5% in the first two months of 2024 compared to the same period last year. Since March, the ongoing Middle East conflict has led to the control of related routes, a contraction in industry capacity, and a 25% to 40% increase in air freight spot rates.

Compared to industry competitors, United Airlines' cargo performance was notably weaker. In the same period, Delta Air Lines reported cargo revenue of 226million,a9219 million, a significant 12.9% year-over-year rise. United Airlines' spokesperson did not provide any explanation for the unexpected decline in its cargo revenue.

In terms of overall performance, United Airlines delivered solid first-quarter results. The financial report shows that the company achieved a pre-tax profit of 900million,withadjustedearningspershareof1.19, surpassing market analysts' expectations. Total revenue increased by 10.6% year-over-year. To address current market volatility and further control operational costs, United Airlines plans to reduce overall flight capacity by 5% for the remainder of the year.

Meanwhile, the global aviation industry is collectively grappling with the cost pressures stemming from the Iran conflict. On the same day, Amsterdam Schiphol Airport announced that it will temporarily reduce airport charges by over 10% from April 27, 2025, to March 31, 2027, to help airlines mitigate the cost pressures from rising aviation kerosene prices and ensure stable capacity on Dutch routes. Earlier this week, the Lufthansa Group also announced plans to cut 20,000 flights at major European hub airports over the next six months to reduce fuel consumption and lower operational costs.