Sunday, October 25, 2026
The news that moves freight
Air Oct 25, 2026 · 6 min read

US airline belly cargo: up 29%, priced off fuel

American and Delta both grew cargo revenue 29%. Fuel is doing much of the work. American Airlines made $274m from cargo in the third quarter, up 29.1% on a year earlier. Delta’s cargo revenue also rose 29%, to $301m. In our view this is not a demand boom. It is belly space (cargo carried under passenger cabins) being priced off fuel. American’s fuel bill rose $1.9bn and it expects fuel near $4.70 a gallon in Q4, nearly double last year. Delta said yield and volume drove its gain about equally. Our call: both airlines report Q4 cargo revenue up at least 20% when they publish results in January.

US airlines are pricing belly cargo off a fuel bill that is about to get bigger

American Airlines made $274m from cargo in the third quarter of 2026. That is 29.1% more than the $212m it made a year earlier, according to the results it published on Thursday 22 October. Delta, which reported on 9 October, grew cargo revenue by the same 29%, to $301m from $233m.

Two of the biggest US passenger airlines growing cargo at nearly 30% sounds like a boom. Our view is that it is something narrower. It is belly space, the cargo hold under the passenger cabin, being priced off a fuel bill that has jumped by more than half. Some of the gain is real volume. But much of it is price, and the price is following fuel. With American now guiding to fuel near $4.70 a gallon for the fourth quarter, we think forwarders should plan for belly rates and surcharges to keep climbing through peak season.

What the airlines reported

American’s third quarter was a record for revenue. Total operating revenue was $16.3bn, up 19.3%. Chief executive Robert Isom called it “record third-quarter revenue and the strongest year-over-year revenue growth in my career.”

Profit did not follow. American still lost $269m on a GAAP basis (the standard accounting rules), against a $114m loss a year earlier. The reason was fuel. American paid an average of $3.85 a gallon in the quarter, against $2.37 a year earlier. Its release says that “increased fuel expense by $1.9 billion year over year.” Fuel and related taxes came to $4.6bn, up from $2.8bn.

Isom put it plainly: “historically high fuel prices significantly impacted our financial results.”

Delta’s picture is similar. Its adjusted fuel price averaged $3.61 a gallon in the September quarter, up 60%, Cargo Newswire reported. Delta said volume and yield (the revenue it earns per kilo carried) each contributed about half of its 29% cargo gain.

That split matters. If half the growth is yield, then about 14 to 15 points of the 29% is price. That is a large price rise for a single year in air freight.

Why we think fuel is setting the price

Start with the market as a whole. IATA’s latest monthly data, published on 29 September, shows global air cargo demand up 4.4% year on year in August. Demand is measured in CTKs, cargo tonne-kilometres, or one tonne flown one kilometre. Global capacity was down 0.1%.

North American airlines did best of any region, with demand up 6.6%. But their capacity fell 2.5%. More freight chasing less space is the classic setup for rising yields. IATA also noted that yields rose month on month for the first time since April.

Then add fuel. IATA put jet fuel prices in August 79.2% higher than a year before, and 8.3% higher than in July.

Put those together. Demand at North American carriers is growing in single digits. Capacity is shrinking. Fuel is up by more than half. Cargo revenue at American and Delta is up nearly 30%. Volume alone does not get you there. Yield does, and yield is following the fuel bill.

There is one more factor. On Delta’s second-quarter call in July, chief commercial officer Joe Esposito said the airline was benefiting from cargo diverted away from the Middle East because of the conflict there, as well as from its Asia growth, Cargo Newswire reported. So some of the volume is freight that would normally move through Gulf hubs. That freight is not guaranteed to stay.

Small business, big leverage

Cargo is a sideline for these airlines. American’s $274m was about 1.7% of its $16.3bn quarterly revenue. Its quarterly results release does not discuss cargo outside the financial tables.

That tells you how the pricing works. A passenger airline does not schedule flights for cargo. The belly space comes with the passenger network. The cargo team’s job is to fill it at the best price it can get. When fuel costs jump, there is no reason to cut cargo rates to win market share. Losing a few points of cargo volume barely moves the group result. Holding price does.

It also helps to look back. In the third quarter of 2019, before the pandemic, American’s cargo revenue was $208m and Delta’s was $189m, FreightWaves reported at the time. American is now about 32% above that level. Delta is about 59% above it. Delta has grown faster, helped by its push into Asia.

What this means for forwarders

Belly space carries a large share of air freight between the US, Asia and Europe. So US airline pricing matters well beyond the airlines’ own results.

First, fuel surcharges. These are the per-kilo charges airlines add on top of the base rate to cover fuel. They generally follow jet fuel prices with a lag. American’s guidance is the clearest signal. Based on the fuel curve on 19 October, it expects to pay about $4.70 a gallon in the fourth quarter, “nearly double the price paid in the fourth quarter of 2025.” That is about 22% above its third-quarter average. American expects fuel to cost it about $2.8bn more than a year earlier in the quarter. Forwarders should expect surcharges to rise again as that feeds through.

Second, peak-season allocations. Many forwarders lock belly capacity for the year-end peak in blocks agreed weeks ahead. Where those deals were priced off third-quarter fuel, expect airlines to lean on surcharges or to hold space back for the spot market. Read the surcharge terms in any block agreement carefully.

Third, quoting. A shipper quote that holds a single all-in air rate for the whole of Q4 carries real fuel risk. Quotes that separate base rate and fuel surcharge, and pass the surcharge through as it moves, protect the forwarder’s margin.

Fourth, the Middle East reroute. If part of the volume growth is freight diverted from Gulf carriers, it could go back quickly if routes reopen. That would take away the volume half of the gain and leave airlines leaning even harder on price.

Fifth, the lanes. IATA had Asia to North America traffic up 13.2% in August, its seventh straight month of growth. That lane made up 23.5% of global air cargo traffic in 2025, Cargo Newswire noted. Europe to North America was up 4.3%. Transpacific belly space is where the squeeze is tightest.

Our call

American expects fourth-quarter revenue to grow between 19.5% and 22.5% year on year. Fuel is guided nearly double last year. Capacity growth, measured in seat miles, is guided at 5.5% to 6.5%. That brings more belly space, but not enough to offset the fuel move.

Our prediction: when American and Delta report fourth-quarter 2026 results in January 2027, both show cargo revenue up at least 20% year on year. We also expect US airline fuel surcharges on transpacific and transatlantic belly space to be higher in December than in October.

What would prove us wrong: a sharp fall in jet fuel through November, or diverted Middle East freight returning to Gulf hubs faster than expected. Either would take the edge off yields. Neither looks likely before the end of the year.

Sources