Iran War Fuels Record Hauls: United Airlines Cargo Revenue Soars

Geopolitical tensions triggered by the Iran war are disrupting global supply chains, revealing an unexpected beneficiary in the aviation sector. United Airlines drove its cargo revenue up 22.6% to $527 million in the second quarter, capitalizing on a sharp rise in air cargo rates caused by operational disruptions in the Middle East. The carrier benefited from the strongest volumes since the Covid-fueled boom, alongside price advantages created by war-induced shortages.

Gulf Tensions Constrict Global Air Cargo Capacity

The U.S.-led military campaign against Iran has severely impacted aviation capacity in the region, tipping the supply-demand balance in favor of carriers like United. While global cargo demand grew by 4% in the first half of the year and surged by 7% in June, capacity remained stagnant.

■Available shipping space on aircraft in the Middle East fell by more than 12% as passenger and cargo airlines suspended or reduced operations due to ongoing war risks.

■These conditions pushed spot rates up 35% to 40% year over year in the previous two months.

■Since hostilities began on Feb. 28, the combined average of spot and contract rates has increased by 17%.

Following the breakdown of the shaky ceasefire and renewed military strikes in the Persian Gulf, Xeneta predicts that rates in 2026 could be 5% to 15% higher than last year.

Yield Gains Drive Financial Performance

United Airlines (NASDAQ: UAL) transported nearly 347 million pounds of cargo during the quarter ended June 30, marking the highest volume since the pandemic disrupted supply chains in March 2020. Similar to pandemic strategies, the carrier deployed idle passenger aircraft as auxiliary cargo jets to help clear manufacturing backlogs.

■Commodities hauled included over 9 million pounds of medical shipments and 232,000 pounds of military equipment.

■Chief Commercial Officer Andrew Nocella stated on an analyst call, "Most of the gains in cargo were yield related, not volume related. I expect that to continue into Q3 as well."

■Competitor Delta Air Lines reported a 39% increase in second-quarter cargo revenue to $294 million, with a 24% rise for the first half to $521 million.

Fuel Costs Weigh on Net Income

Despite raising its full-year earnings guidance and posting adjusted earnings of $1.99 per share—beating consensus—and a 16% gain in revenue to $17.7 billion, United faced significant headwinds. The spike in jet fuel prices tied to decreased oil flows through the Strait of Hormuz impacted profitability.

■Net income dropped by more than 17% versus the year-ago quarter to $805 million, after spending an extra $2.3 billion on fuel than previously expected.

These data clearly demonstrate how the geopolitical risk premium is transforming into a structural rise in not just commodity prices, but logistics costs as well. Capacity constraints caused by the Iran war are pushing freight rates toward Covid-era levels, while simultaneously keeping energy inflation alive. From an ECB perspective, such supply-side shocks complicate efforts to lower inflation and highlight the cost-push pressures of global trade conflicts and tariff policies. United’s revenue gains illustrate the micro-level opportunities created by macroeconomic uncertainty.