Fitch Ratings: Air cargo volumes at US airports resilient, but revenues not immune to volatility

Fitch Ratings stated (26-Aug-2020) air cargo volumes have been more resilient to the effects of the coronavirus pandemic than passenger traffic, but the overall effect on stabilising airport revenues is mainly limited to the largest US cargo hubs, given the smaller cargo revenue contributions at the majority of US airports. Details include:

• The 10 largest US cargo airports have recorded "mild" declines or, in a few cases, significant growth in cargo volumes;
• Fitch stated stay at home orders and increased e-commerce have bolstered cargo volumes in the short term. However, Fitch believes volumes could soften in the medium term due to global economic uncertainties;
• For the period Jan-2020 to May-2020:
  • Cargo volumes at major cargo hubs such as Memphis International Airport, Louisville Muhammad Ali International Airport and Cincinnati/Northern Kentucky International Airport were flat year-on-year;
  • Miami International Airport and Los Angeles International Airport recorded moderate single digit decreases in cargo volumes;
  • Ted Stevens Anchorage International Airport and Ontario International Airport recorded double digit growth, bolstered by their west coast location and ability to handle an increasing share of PPE shipments originating from Asia;
• Fitch stated that while cargo volumes have been solid, the extent to which they are able to offset passenger volume declines and help stabilise airport revenues is limited;
• Cargo remains a small percentage of overall revenues at major airports such as Los Angeles, Miami and Chicago O'Hare International Airport. At Miami, the fourth largest cargo airport in the US, cargo only represented an estimated 9.1% of total operating revenues in 2018;
• Cargo volumes were able to help mitigate passenger revenue declines at the largest cargo airports in Memphis (cargo represents 46% of annual revenues), Anchorage (53%) and Louisville (33%);
• Fitch concluded: "Even at the largest cargo facilities, cargo revenues are not immune to the broader volatility in the aviation sector brought on by the pandemic, and could decline as economic pressures increase". [more - original PR]