Yield Trends
Freight yields have declined at an average rate of 4.9% per year over the past 20 years.
Continuing profit challenges at passenger airlines have focused airline attention on opportunities for lower-hold cargo revenue. On average, cargo revenue represents 15% 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 1989, scheduled freight yield has declined at an average rate of 4.9% per year, after adjusting for inflation. Although scheduled freight yield increased briefly from 1989 through 1990, the decline resumed through 2002.
From 2002 through 2008, freight yield increased approximately 4.1% per year. Much of the increase owes to fuel and security surcharges that were imposed beginning in 2003. In 2007, freight yield declined slightly, due to a great extent to price competition spawned by the proliferation of online booking systems, which allowed shippers to compare prices. Significant fuel surcharges were imposed in 2008 in response to the fuel crisis, and freight yield increased 16%. Freight yield fell 22% with the rapid decline in fuel prices (and corresponding surcharges) between mid-2008 and mid-2009. Total air cargo capacity increased faster than traffic, putting an additional damper on yields. However, over the entire decade, the average rate of decline slowed to 1.6% per year.