Yield Trends
Over the past two decades, freight yields have declined at an average rate of 3.0 percent per year.
Continuing profit challenges at passenger airlines have focused airline attention on opportunities for lower-hold cargo revenue. On average, cargo revenue represents 15 percent of total traffic revenue, with some airlines earning well over half their revenue from this source. Continuing industrywide declines in yield for cargo and passenger services reflect productivity gains, technical improvements, and intense competition. Declining yields also create pricing pressure on all industry segments (e.g., lower aircraft acquisition and operating costs). Since 1987, scheduled freight yield has declined an average 3.0 percent per year, after adjusting for inflation. Although scheduled freight yield increased briefly from 1989 through 1991, the decline resumed through 2001.
From 2001 through 2007, freight yield increased approximately 3.2 percent per year. Much of the increase in freight yield started in 2003 as fuel and security surcharges were imposed. During 2006 and 2007, freight yield declined slightly, largely because of competitor pricing in response to the pricing transparency created by the proliferation of automated booking systems. In addition, total air cargo capacity increased faster than traffic, further contributing to the decline. However, the rate of freight yield decline slowed to an annual average of 1.0 percent during the past decade.