United Airlines Imposes Regional Cargo Surcharge to Offset Surge in Jet Fuel Costs
United Airlines will levy a market disruption surcharge starting May 1 to offset surging jet fuel costs and operating expenses driven by the Iran war, with rates varying by region. Q1 cargo revenue fell 1.6% year-over-year to $422 million despite global air cargo market growth and spot rate increases.
1. Surcharge Implementation
Starting May 1, United Cargo will apply a market disruption fee on shipments to recover rising operating costs—primarily surging jet fuel prices and supplier charges—across specific trade lanes, with rates determined regionally and subject to adjustment as conditions evolve.
2. Q1 Cargo Revenue Decline
United’s cargo division reported $422 million in first-quarter revenue, down 1.6% year-over-year, a surprise given a 6.5% global market expansion and spot rates climbing 25–40% since March, signaling capacity constraints failed to translate into higher yields for United.
3. Competitive Comparison
Rival carriers outperformed, with Delta Cargo revenue rising 9% to $226 million and American Airlines cargo revenue increasing 12.9% to $219 million, underscoring United’s struggle to capitalize on tightened industry capacity driven by Middle East flight restrictions.
4. Overall Earnings and Capacity Plan
United’s overall first-quarter pre-tax profit reached $900 million with adjusted EPS of $1.19 on 10.6% revenue growth; the airline plans a 5% capacity reduction for the remainder of the year to manage costs during market volatility.