Lufthansa Cargo

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Contact info Expand

Senior Management Expand

 Chairman & Chief Executive Officer - Lufthansa Group  Carsten Spor
 Chief Financial Officer - Lufthansa Group  Simone Menne
 Chairman & CEO - Lufthansa Cargo  Peter Gerber

Ownership Expand

Lufthansa Cargo is a wholly owned subsidiary of Deutsche Lufthansa AG.

Brief Profile Expand

Lufthansa Cargo is the Logistics division of the Lufthansa Group. As well as offering air freight services, Lufthansa Cargo provides additional logistics services including the arrangement of ground transportation for customers' air freight.

In addition to its own freighter services, the company manages the cargo capacity of its parent's passenger aircraft. It also has equity investments in a number of other airlines which it can transport cargo on. 

Lufthansa Cargo operates from its main hub in Frankfurt, while Munich, Leipzig-Halle and Vienna are also important hubs. In 2014, Lufthansa Cargo reported revenues of €2.4bn while the Lufthansa Group recorded revenues of €30.47bn.

Strategic Analysis Expand

Lufthansa Cargo continued to pursue its Lufthansa Cargo 2020 programme.

Market Conditions

The most important traffic regions for Lufthansa Cargo are still Asia/Pacific and North and South America. In terms of total revenue, Germany and the rest of Europe still represent the most important sales markets, with a share of around 50 per cent.

Strategic Partnerships

Lufthansa Cargo again concentrated its efforts on developing the long-term relationships with its strategic partners in 2013. The Global Partner programme plays a vital role in this respect; Eleven Global Partners account for nearly 50% of Lufthansa Cargo's revenue. The programme aims to retain customers over the long term and for all partners to participate in the global growth of the airfreight market by integrating their operations in the best possible way.

Investment

The contraction of the airfreight business that began in 2012 continued in 2013. Average yields fell sharply, although freight volumes remained stable.

Lufthansa Cargo was one of the few cargo airlines worldwide to invest in new aircraft, modern technologies and its route network in 2013, despite the difficult economic conditions. The first two new Boeing 777 freighters have been in service on scheduled operations since late 2013. This puts Lufthansa Cargo in an even stronger position for the future. The modernisation of the fleet is just one of many projects in the "Lufthansa Cargo 2020" programme, with which Lufthansa Cargo aims to maintain and develop its position as a leading airfreight service provider. Altogether, the company expects to take delivery of five new B777 freighters by 2015, which will replace some of the current MD-11 cargo aircraft.

In 2013, Lufthansa Cargo concentrated on strengthening its position in North and South America. A new flight was scheduled to Lima in Peru, and the Mexican high-tech centre Guadalajara was included in the flight timetable for the first time.

© 2014 Transport Intelligence
In 2012 Lufthansa Cargo continued to pursue its Lufthansa Cargo 2020 programme which began in 2011.

During the year the business launched its project to modernise the IT environment, as well as completing preliminary work for the capital expenditure on the construction of a Lufthansa Cargo Center in Frankfurt.

Progress was also made as part of its fleet development programme, two of the five Boeing 777 freighters were ordered and were expected to be delivered and put into service in the company’s own operations in late 2013.

Lufthansa is yet to decide whether to use the deliveries as additional or replacement aircraft will be taken at a later date.

© 2013 Transport Intelligence
Strategy: 2016 News

2016

August – Lufthansa Cargo has taken over complete ownership of the time:matters Group, which specialises in global same day delivery and time-critical international spare part logistics. The cargo airline, which spun off time:matters as a subsidiary in 2002, had already held a 49% share. The majority 51% shareholding had been held by financial investor Aheim Capital and time:matters management. Lufthansa Cargo and time:matters had already been cooperating successfully on express products. The takeover is in line with the Lufthansa Group's "7 to 1: new concepts for growth" strategy.

"time:matters has established itself in recent years as the leading specialist for same day delivery and emergency logistics in Europe", said the CEO and Chairman of the Executive Board of Lufthansa Cargo. "With time:matters, we are aiming to grow our business in the special segment as well. Our focus is all about maximum reliability, exceptional service and customised solutions", he added. time:matters is to be maintained as an independent company.

The CEO of time:matters commented, "With its technology and service platform, hardly any other logistics company can match time:matters in terms of service and flexibility. Since 2006, we have more than tripled our revenue to over €65m." Miller also believes there is potential for further growth in the segment.

A spokesperson from Aheim Capital said, "After around ten years of intensive cooperation with the time:matters management team, we are pleased to be in a position to hand over to Lufthansa Cargo, a company which, with its employees, is among the most innovative and creative in its industry and therefore represents an excellent platform for future air freight logistics concepts for the Lufthansa Group."
Strategy: 2012 News

2012

April - Lufthansa completed the sale of British Midland Ltd. (bmi) to International Airlines Group (IAG), the parent company of British Airways. The completion of the sale took place after close of business on April 19, 2012. The purchase price amounted to £172.5m (€207m).

As price adjustments were agreed as part of the transaction structure, the net purchase price would be determined at the end of the second quarter 2012, at which point the final amount would be transferred. It was expected that the net purchase price would be negative. However, the costs of the transaction for Lufthansa would amortise within one year. The gross purchase price was expected to be reduced by a number of items including agreed deductions for not selling bmi regional and bmibaby prior to the completion of the transaction.

bmi’s underfunded Pension Scheme was to be transferred to the UK Pension Protection Fund. The pension shortfall for the members of the bmi Pension Scheme would be offset to a large extent by a one-off contribution from Lufthansa of £84m to a supplementary pension scheme.

On November 4, 2011, Lufthansa and IAG agreed in principle to the sale of bmi to IAG, prior to a legally binding purchase agreement being signed by both parties on December 22, 2011. The validity of this contract was subject to regulatory approval by the European Commission, which was received on March 30, 2012. By carrying out the transaction, Lufthansa sold a consistently loss-making company.

March - Jade Cargo International, a Lufthansa Cargo/Shenzhen Airlines joint venture that temporarily suspended operations earlier in the month, signed a letter of intent with China’s UniTop Group to restructure the company.

The sale was expected to take two months to complete, and would completely divest Lufthansa Cargo of its 25% stake in the company.
March - Lufthansa would most likely not buy the remaining 55% of Brussels Airlines this year, chairman and CEO Christoph Franz revealed.

Franz said, “Our strategic commitment is clear, but we are not in a hurry to exercise our call option. We still have another two years to do so. At this point of time the priority is on our bottom line.”

In September 2008, Lufthansa bought 45% of Brussels Airlines parent company, SN Airholding for €65m via a capital increase. As part of the agreement, Lufthansa has an option of acquiring the remaining 55% from 2011. The option could be exercised during three weeks in April. 

Franz also confirmed that “if necessary we will offload more loss-making airlines in our portfolio. We started to offload loss-making carriers last year, with the sale of bmi to IAG, we closed Lufthansa Italia and withdrew from Jade Cargo.”

January - Lufthansa Cargo was considering replacing its fleet of 18 Boeing MD-11Fs and would decide by 2014 which aircraft to go with, according to chairman and CEO Karl-Ulrich Garnadt.

“We know we have to order more [Boeing] 777Fs and there is no other option,” Garnadt said. Lufthansa Cargo finalised an order for five 777 freighters valued at $1.35bn last spring.
January - Lufthansa Cargo revealed some of its expectations for the year ahead. CEO Karl-Ulrich Garnadt said that he expected no growth in 2012. "Currently we are 10% down compared to last year. The demand is much weaker,” he said.

The company's outlook was much more positive until last October, when it was announced that night flights would be banned at Frankfurt Airport. The ban removed 17 night-flights at the airport, 10 of which were Lufthansa Cargo's, costing the company €20m in profit in 2011. If the ban was contiually upheld in 2011, Lufthansa Cargo anticipated it would lose €40m in profit and a three digit figure in revenue.

Garnadt also remarked that the ban would alter the company's fleet development plans. He said Lufthansa Cargo had planned to lease two more freighters for the coming summer schedule but had "axed" those plans. "If this scenario continues to go in the wrong direction, then we will start to replace some MD-11Fs with the first 777s instead of expanding our fleet."

Garnadt said that if the court reverses the ban, the carrier will "switch some important night flights back to Frankfurt from July." He said that 50% of Lufthansa Cargo's business was high-value express cargo.
Strategy: 2011 News

2011

September - Lufthansa's fleet modernisation was continued in with the ordering of
a further twelve aircraft (two Airbus A380s, one A330-300, four A320s, five Embraer 195s).

March - Lufthansa's Supervisory Board approved an order for 35 aircraft.

The order included 30 aircraft from the Airbus A320neo family and five Boeing 777 freighters. The passenger planes were planned to be delivered in 2016 and the freighters from as early as 2013.
Strategy: 2005-2011 Archive

Lufthansa Cargo 2020 Strategy

Lufthansa Cargo's 2020 strategy identifies six key points that are necessary for the company to achieve profitable growth in the years ahead:

Fleet Development: In 2011, Lufthansa Cargo ordered five new Boeing 777 freighters which were planned to be delivered between 2013 and 2015. The order would cover anticipated growth and their fuel efficiency would deliver cost advantages.

Modernisation of IT: Replacemnet of the old IT system to bring the new network up to industry standards.

Frankfurt Cargo Hub: The development of a new logistics centre in Frankfurt to replace Lufthansa Cargo's existing 30 year-old facility.

eCargo: The exchange of information between Lufthansa Cargo and customers would become inceasingly digitalised, reducing costs.

Quality/Lean Logistics: Lufthansa Cargo aimed to use more lean management methods. This philosophy had already been established at stations in Dusseldorf, Johannesburg and New York where productivity was increased substantially.

Cooperation: Lufthansa Cargo wanted to arrange more agreements with airline partners, giving the company access on strategically attractive traffic flows. Agreements would also extend the range of products on offer to customers.

Lufthansa Cargo CEO Karl Ulrich Garnadt summed up the 2020 strategy in a nutshell. "With the 'Lufthansa Cargo 2020' programme launched last year (2011), the company has clearly defined its long-term strategy, explained the Chairman. With orders for new Boeing 777 freighters, the upgrading of the IT platform, plans for a new logistics centre in Frankfurt to replace the existing 30 year-old facility as well as other long-term projects, the key markers are in place to ensure that the company remains industry leader also in 2020."

Financial Targets

In Lufthansa Cargo's 2011 results press release, Peter Gerber, Lufthansa Cargo Board Member Finance and Human Resources, pointed out some of Lufthansa Cargo's main financial targets in the short and medium term.

He declared that it was the company's aim to "raise earnings by a minimum of €70m euros yearly from 2015.

The company also revealed that for 2012, it expected its business to develop on a positive note, and was again anticipating an operating result in the region of three-digit millions. However, it also expected that it would not replicate the results attained in 2011.

Jade Cargo International Withdrawal

In March 2012, Jade Cargo International, a Lufthansa Cargo/Shenzhen Airlines joint venture that temporarily suspended operations earlier in the month, signed a letter of intent with China’s UniTop Group to restructure the company. The sale was expected to take two months to complete, and would completely divest Lufthansa Cargo of its 25% stake in the company.

Frankfurt Airport Night-Flight Ban

Lufthansa Cargo CEO Karl-Ulrich Garnadt  revealed that the ban imposed on night-flights at Frankfurt airport in cotober 2011 would alter the company's fleet development plans.

He said Lufthansa Cargo had planned to lease two more freighters for the coming summer schedule but had "axed" those plans. "If this scenario continues to go in the wrong direction, then we will start to replace some MD-11Fs with the first 777s instead of expanding our fleet."

Garnadt said that if the court reverses the ban, the carrier will "switch some important night flights back to Frankfurt from July."
Lufthansa Cargo concentrates on its core competencies. Business activities which are not part of its core business and require smaller, flexible organisational structures are spun off into independent companies.

Lufthansa Cargo's strategy aims for growth in the major global centres of production and consumption and is based on collecting freight flows where they arise. In the growth market China, Lufthansa Cargo has a strong position thanks to its equity investments and joint ventures. The investments in Shanghai Pudong International Airport Cargo Terminal, the International Cargo Center Shenzhen, Tianjin Aircargo Terminal Ltd. and Jade Cargo International represent key pillars of the China strategy.

Lufthansa Cargo's strategy focuses also on profitable growth in every traffic region. The company derives almost 40% of its capacity from its MD-11 fleet.


Lufthansa Cargo is cautiously optimistic for 2010. It expects sales to improve as a result of slightly increased freight volumes and a further industry-wide recovery in freight rates. The volume is expected from Asia and, in particular, from China. 

With "Lean Lufthansa Cargo 2010ff"* strategy, the company wants to use of 2010 and the following years to return profitable growth levels from before 2009 and to develop Lufthansa Cargo from as a leaner company. Following its new strategy, the company intends to:

  • increase revenues by 20% and to reduce the unit costs by 10% per sold freight tonne km
  • cut the material cost budgets in the administrative area by 20% in 2010, and in the operative areas by 10%
  • reduce 10% in personnel and the administrative areas, as well as in the operative. The short-time working quota for the ground staff of Lufthansa Cargo in Germany was reduced from 25% to 20% as of 1 March 2010. As a result of signed agreements, Lufthansa Cargo can continue to flexibly adapt its personnel capacities to reductions in demand in the airfreight business due to the economic situation.

In 2010, Lufthansa Cargo will concentrate its project portfolio on operationally necessary projects. Overall, the company will continue its restrictive investment policy.

With the "Lean Lufthansa Cargo 2010ff", programme, Lufthansa Cargo expects to improve its operating result.

*ff - following

 Crisis management in 2009 and future orientation in 2010ff.
 Source: Lufthansa Cargo

The strategy at Lufthansa Cargo remained based on growing in the major global growth markets and on collecting freight flows wherever they arise. The company continued to have a foothold in China with an equity investment in the Shanghai Pudong International Airport Cargo Terminal (PACTL).

In addition, the company was well positioned in the Pearl River Delta as it had a stake in the International Cargo Center Shenzhen (ICCS) as well as shares in the cargo airline Jade Cargo International which connects centres worldwide and is based in Shenzhen.

From the start of 2008 it also has operations in the Chinese region on the Yellow River Delta where it had another equity investment in the handling company Tianjin Airport Hua Yu Air Cargo Terminal Co. Ltd. (HYACT) at the emerging cargo hub in Tianjin.

This strategic involvement in China gave the company a good platform from which to benefit from future economic growth as well as service traffic flows from Asia to other regions.

Deutsche Lufthansa AG's cargo unit planned to build its own freight alliance combining its Chinese unit Jade Cargo and Swiss World Cargo with Aerologic, which it owned along with Deutsche Post AG.  The new group, which was expected to be ready for operation in 2010, would have 36 airfreight planes and the use of freight space in 400 passenger planes.

Lufthansa Cargo wanted to grow asset-light so the joint foundation of a new cargo airline with the Deutsche Post World Net subsidiary DHL Express fitted into this approach. 

In October 2007, Lufthansa Cargo moved its freighter traffic from Cologne to Leipzig, where DHL Express had set up its European express hub.

The new company AeroLogic was set to commence operations from Leipzig in 2009, deploying 11 new Boeing B777-200LRF cargo aircraft.  This joint venture strengthened Lufthansa Cargo's position in the increasing competition between cargo companies and also with respect to integrators such as FedEx and UPS.


Lufthansa Cargo's aim is to generate average annual growth of five per cent in the next few years by expanding its partnerships and taking advantage of any expansion in the airfreight market.  Lufthansa Cargo's focus is on the Asian growth markets, first and foremost China and India.  The company had several aims for 2007:
  • Do its utmost to bring about a practicable nightflight ruling at Frankfurt Airport. 
  • Focus on standard cargo/BUPs (Bulk Unitization Programme), and express freight.
  • Continue modernisation of buildings and technologies at the Frankfurt location and work on improving infrastructure.
  • Increase the presence of Lufthansa Cargo at Frankfurt Airport's CargoCity Süd. 
  • On the international front, intensify partnerships.

In the 2007 financial year, Lufthansa Cargo anticipated an operating profit well in excess of earnings in 2006 which were depressed by non-recurring items. Operating earnings are to be boosted yet further at this higher level in 2008.


Strategic History

During the past decade Lufthansa has been transformed from a functionally structured monolithic airline company into an aviation group with several business segments.

 Lufthansa Portfolio Management
 
 Source: Lufthansa

The Passenger Transportation Business segment is the Group's central business segment in terms of both core competencies and size. The relevance of the other business segments depends on the extent to which they reinforce the competitiveness of the passenger business by providing supportive functions for essential production factors and infrastructures. This determines the course of development and their lasting affiliation to the Group.

 Focus on Passenger Business
 
 Source: Lufthansa

Lufthansa Cargo has focused its products and processes on the needs of the shippers and they have worked to reduce the complexity of the offer with fewer products, fewer product and process options and quick and easy to use booking systems.

The premium products have been expanded to include the fast-growing standard segment and the share of load units pre-constructed by the shipper has been increased considerably. This allows cost reductions with sustained increases in production quality.

As Europe's largest cargo airport, Frankfurt is to be expanded and developed further and Lufthansa Cargo still assumes practicable night-flight regulations for Frankfurt airport.

The freight company responded to the structural changes in the airfreight industry with a strategy entitled "Excellence + Growth" launched in early 2004. As a result extensive activities have been initiated, in particular the re-alignment of the company as a process-oriented organisation with pronounced customer orientation.  Within the framework of "Excellence + Growth", administration and management have been reduced. By the end of 2005, around 400 jobs had been cut.

The focus lies on cost reductions when purchasing services and on network optimisation, sales growth, improving revenues and pay settlements.

Customers

During 2005 Nippon Express Co. Ltd became a new member of the Lufthansa Cargo Global Programme.  Twelve worldwide active shippers belong to this customer loyalty programme with which Lufthansa cargo conducts around 45% of its business.

The companies included: ABX, DHL Global Forwarding, EGL, DHL Exel Supply Chain, Geologistics, Hellmann, Kuhne + Nagel, Nippon Express, Panalpina, Schenker, UPS, UTI.

The focus of this group is on growing together in the market, creating synergies in sales, reducing transaction costs and pushing important subjects such as automation of business processes.


Finances Expand

2016

June – The overcapacity in the air freight market is inflicting real pain on some airlines' cargo operations, including previous market leaders such as Lufthansa. The German airline has just announced a substantial shrinkage in its workforce.

Results for the first quarter of this year saw a decline in revenue of 21.8% as compared to the same period in 2015 and the company stated that it was "bracing itself for a challenging financial year". Yet even before this the profitability of the cargo subsidiary was under pressure. 2015 saw profits fall by 40% to €74m, a result depressed by strikes in the wider Lufthansa Group.

The first response to this has been the announcement of 700-800 jobs losses, representing approximately 20% of its workforce. Presumably this is simply to reduce the cost base of Lufthansa Cargo along the lines of the cost-reduction programme announced earlier in the year that aims to strip-out €80m annually over the next several years. Most of these appear to be in Germany where Lufthansa has traditionally had some of its most expensive staff, although previous attempts to tackle high pay have led to severe strikes, notably amongst its pilots.

The company has been briefing that it is aiming to reposition its business to be more responsive to customers, more orientated to e-commerce and- as reported by Lloyds Loading List - to target "private customers".

The underlying problem is that the cargo market is over supplied and growing too slowly. However, Lufthansa Cargo is also suffering from the competitiveness of the Gulf airlines, notably Emirates Sky Cargo, which may also be experiencing lower profits but which continues to invest heavily in new infrastructure and aircraft.

Fortunately for the Lufthansa Group, the passenger business has rebounded leading to a doubling of profits, so what may be happening over the medium-term is a restructuring of Lufthansa away from its traditionally large cargo business and towards greater reliance on passengers, which is the sort of business model seen at IAG/British Airways.
Lufthansa Cargo Finances: Total

2015

Lufthansa Cargo reported revenues of €2,355m for 2015, representing a year on year fall of 3.29% compared with 2014’s €2,435m. Adjusted EBIT for the business was also down on the previous year, by 39.84% to €74m, compared with the previous year’s €123m. As a result, EBIT margin for 2015 fell by 1.91 percentage points compared with the previous year.

The company stated that Germany and Europe remain its main markets, accounting for around 50% of sales in 2015. Its main traffic regions were Asia Pacific and North America. Despite a slight upturn in global demand for airfreight at the end of 2014, growth slowed in the second and third quarters, with business suffering from flat markets. As a result, Lufthansa Cargo’s earnings in this period were very poor. Business stabilised slightly in the fourth quarter of 2015 for seasonal reasons but was interrupted by strikes at Lufthansa Passenger Airlines, amongst other things.

Lufthansa Cargo noted that cargo tonnage was down year on year by 2.4%. Available tonne-kilometres increased by 2%, but cargo tonne-kilometres fell by 2.9%, resulting in a year on year cargo load factor decline of 3.4 percentage points. Additionally, yields contracted by 0.7% and traffic revenue declined by 3.8%. It was this load factor decline however, that the company attributed as the main reason for the fall in revenue and earnings.
2014

It is a tribute to the strength of Lufthansa Cargo's management that it can prosper despite all the threats facing the company.

The most immediate issue is the apparent endless dispute with its pilots. March saw another strike over 'pay and conditions' bringing much, but not all of the airline to a halt. Competition is also tough in the airline business generally, with Lufthansa once again complaining about the strength of the Gulf airlines.

Yet, over 2014, it increased operational profits 26.6% to €100m with margins hardening from 3.2% to 4.1%. The sharp rise in profits was achieved in spite the company's falling market share. Although the market generally increased in low single digit percentages over 2014 Lufthansa Cargo actually saw a fall of 2.9% in tonnage carried. The load factor did edge-up slightly but the available freight capacity shrank marginally as well. Consequently revenue went nowhere, with 2014 seeing sales of €2,435m, a 0.3% rise year-on-year.

Reading between the lines it appears that the improved demand picture seen around Christmas 2014 underpinned what was otherwise a poor year. It enabled Lufthansa Cargo to focus on improving margins by selecting the most profitable business without too much of a loss of revenue. Other factors that may have contributed to Lufthansa's success were the phasing in of a fuel efficient Boeing 777 fleet and its investment in IT such as the ‘eCargo project’.

The overall strategy of Lufthansa Cargo appears to be based on the export activity of Germany. The company's CEO, summarises this by stating that, "Frankfurt is the epicentre of Europe’s industrial sector. Geographically, it’s much better positioned than London or Paris. The metropolis is the main European hub for our customers, the major international freight forwarders. They have their main consolidation centres here. It’s an ideal location for us to continue investing". All of this may be true, however the world's economy is far more complex than just exports moving in one direction and these trade flows hold great potential for further growth.

Note: In 2015, Lufthansa stopped recording figures for 'Operating Result' and replaced this with 'Adjusted EBIT' as the main earnings metric.
Lufthansa Cargo Finances: Total [€] Convert to
  2008 2009 2010 2011 2012 2013 2014 2015
Revenues 2907.00 m 1951.00 m 2794.90 m 2943.00 m 2688.00 m 2443.00 m 2435.00 m 2355.00 m
Adjusted EBIT       248.00 m 133.00 m 106.00 m 123.00 m 74.00 m
Operating Profit 164.00 m -171.00 m 310.10 m 249.00 m 105.00 m 79.00 m 100.00 m  
EBIT margin       8.43 % 4.95 % 4.34 % 5.05 % 3.14 %
Export to Excel      Source: Lufthansa Cargo,  Last update: 21/06/2016

Source: Lufthansa Cargo
Lufthansa Cargo Finances: Net Traffic Revenue by Geographic Segment % to Total

2015

In 2015, the region responsible for the majority of Lufthansa Cargo’s revenue was its Americas region, which represented a shift compared with 2014, which saw the Asia Pacific region as the largest revenue contributor.

All geographic segments recorded a fall in revenues, however the Americas segment recorded the least significant of these falls, of €8m, which represented a drop of 0.83% compared with 2014. For Asia Pacific, which in 2014 was the largest contributing region to revenue, the segment recorded a fall in revenue of 5.16% to €919m. The Europe and Africa/Middle East segments recorded slightly harsher year on year falls in revenue of 6.16% and 8.26% respectively.
2014

Lufthansa Cargo's revenue spread by geographic region indicated a mixed picture for the airline during 2014, where two regions posted year on year growth, and two posted year on year contractions.

In all cases, the year on year shifts were minor, with Europe noting the greatest change; a revenue decline of 2.77%. In addition, Asia Pacific revenue fell by 1.82%. Conversely, the Americas reported a year on year gain of 1%, whilst Africa/ Middle East improved by 1.4%.
Lufthansa Cargo Finances: Net Traffic Revenue by Geographic Segment % to Total [€] Convert to
  2010 2011 2012 2013 2014 2015
Europe 215.00 m 245.00 m 248.00 m 217.00 m 211.00 m 198.00 m
Americas 886.00 m 1087.00 m 1050.00 m 956.00 m 966.00 m 958.00 m
Asia Pacific 1328.00 m 1267.00 m 1064.00 m 987.00 m 969.00 m 919.00 m
Africa/Middle East 205.00 m 218.00 m 215.00 m 215.00 m 218.00 m 200.00 m
Export to Excel      Source: Lufthansa Cargo,  Last update: 21/06/2016

Source: Lufthansa Cargo
Lufthansa Cargo Finances: Air Cargo Revenues and Volume
Note: In 2014, the company restated its 2013 revenue figure for its Logistics business. The original figure was €2,442m.
Lufthansa Cargo Finances: Air Cargo Revenues and Volume [€] Convert to
  2008 2009 2010 2011 2012 2013 2014 2015
Revenue 2907.00 m 1951.00 m 2795.00 m 2943.00 m 2688.00 m 2443.00 m 2435.00 m 2355.00 m
Volume 8283.00 RTKm 7425.00 RTKm 8905.00 RTKm 9487.00 RTKm 8727.00 RTKm 8731.00 RTKm 8612.00 RTKm 8364.00 RTKm
Export to Excel      Source: Lufthansa,  Last update: 28/06/2016

Source: Lufthansa
Lufthansa Group Finances: Total

2015

For 2015, the Lufthansa Group recorded revenues of €32,056m, representing an increase on the 2014 figure of 6.81%. Operating profit increased significantly from €75m in 2014 to €1,722m in 2015.

As has been the case for many years, the Passenger Transportation business segment was the largest contributor to group revenues, accounting for 70%. The second largest contributor was the MRO business segment, which noted a year on year increase in revenues of 17.57% to €5,099m, which represented 14.6% of total group revenues. The group’s catering business recorded an increase in revenues of 14.77% to €3,022m, which represented 8.6% of group revenues. Finally, the group’s Logistics business segment was in fact the smallest contributor to revenues. It was also the only business segment to report a year on year decline in revenue for 2015, generating only €2,355m. This represented a fall of 3.29% compared with 2014. As a result, the Lufthansa Cargo Logistics business segment accounted for 6.7% of total Lufthansa Group revenues.

2014

The Lufthansa Group reported an overall revenue decline in 2014, with the top level figure contracting by 0.06% to €30,011m.

The passenger segment remained the largest business unit of the group, though declined as a proportion of overall revenue, by 0.7 percentage points to 69.9%. Logistics again made up 7.3% of the total, with IT also accounting for the same proportion as the previous year; 1.9%. Lufthansa Technik and Catering grew to 13% and 7.9% of total revenues, respectively.

Note: 2011 operating profit was restated from €1,311m.

Note: 2010 revenue figure was restated to €26.46bn.
Note: 2008 revenues, operating profit and margin restated from €24,870m, €1,354m and 5.44% respectively.
Lufthansa Group Finances: Total [€] Convert to
  2008 2009 2010 2011 2012 2013 2014 2015
Revenue 24842.00 m 22283.00 m 26459.00 m 28734.00 m 30135.00 m 30028.00 m 30011.00 m 32056.00 m
Operating Profit 1280.00 m 130.00 m 1386.00 m 773.00 m 1205.00 m 326.00 m 75.00 m 1722.00 m
Margin 5.15 % 0.58 % 5.24 % 2.69 % 4.00 % 1.09 % 0.25 % 5.37 %
Export to Excel      Source: Lufthansa,  Last update: 21/06/2016

Source: Lufthansa
Lufthansa Group Finances: Revenue by Business Segment % to Total (New Structure)
Note: In 2015, the IT Services business segment ceased to be an independent strategic operating segment of the Lufthansa Group, following the division of the restructured Lufthansa Systems AG into the Airline Solutions, Industry Solutions and IT Infrastructure companies.
Lufthansa Group Finances: Revenue by Business Segment % to Total (New Structure) [€] Convert to
  2009 2010 2011 2012 2013 2014 2015
Passenger Transportation 16798.00 m 20912.00 m 22290.00 m 23559.00 m 23513.00 m 23320.00 m 24499.00 m
Logistics (Lufthansa Cargo) 1951.00 m 2795.00 m 2943.00 m 2688.00 m 2442.00 m 2435.00 m 2355.00 m
MRO 3963.00 m 4018.00 m 4093.00 m 4013.00 m 4180.00 m 4337.00 m 5099.00 m
Catering 2102.00 m 2249.00 m 2299.00 m 2503.00 m 2514.00 m 2633.00 m 3022.00 m
IT Services 605.00 m 595.00 m 599.00 m 609.00 m 640.00 m 646.00 m  
Export to Excel      Source: Lufthansa,  Last update: 21/06/2016

Source: Lufthansa
Lufthansa Cargo Finances: 2004-2013 Archive

2013

Cargo Total

Lufthansa Cargo ended 2013 with a revenue figure of €2,442m, having seen a decline of 9.15% year on year.

Objectively, the cargo volume performance was weak, with Lufthansa Cargo carrying 1.7m tonnes over the past 12 months. In the words of its CEO, "Tonnage almost equalled the previous year's level," although Lufthansa's annual figures report that in 2012 the airline carried 1.9m tonnes, itself a fall of 7% on 2011.

What appeared to underpin his optimism was that he had been able to fill his planes, effectively achieving a load factor of 69.9% up from 66.9% in 2012.This was certainly higher than the industry average which was in the low 40s percentage-wise.

It might be suggested that Lufthansa's cost base had also fallen due to lower fuel costs and more efficient aircraft. What also appeared to be the case was that Lufthansa's cargo fleet was shrinking disproportionately as its passenger fleet related belly freight continued to expand.

Indeed, compared to AirFrance KLM, Lufthansa had ridden the poor market conditions well. AirFrance KLM announced that it was to continue to shrink its freighter fleet with the retirement of two B747Fs, whose costs had become unsustainable. Despite such continuing cuts, AirFrance KLM's Cargo business remained loss making in the third quarter, with a load factor of 61.8%.

Lufthansa posted an operating profit of €77m for the year, which represented a relative decline of 26.67%. Overall it appeared that Lufthansa Cargo had remained profitable through the effectiveness of its operational management.

However the strategic issues around both the continuing low growth in the airfreight sector and the threat from Gulf based carriers remained significant barriers to Lufthansa Cargo in exploiting the weakness of others.

Cargo Revenue by Geographic Segment

Lufthansa saw cargo revenues fall in all geographic regions, with the exception of Middle East/Africa, where the figure was unchanged.

Europe was most significantly affected, with revenues falling by 12.5% as the result of a deliberate capacity reduction. The Americas saw a revenue decline of 9%, influenced by a 1.9% drop in tonnage. Asia Pacific fell by 7.2%, which, as with Europe, was influenced by a capacity reduction.

Group Total

For 2013, the Lufthansa Group reported revenues of €30,028m, having fallen by 0.36% year on year.

The passenger segment represented a 70.6% share of the total company revenues, having decreased by 5.2 percentage points from 2012. The Logistics segment represented 7.3% of total revenue, whilst Lufthansa Technik accounted for 12.6%, catering for 7.6%, and IT Services for 1.9%.
2012

Cargo Total

Lufthansa Cargo closed 2012 with a profit, despite weaker demand and lower revenue. Revenue for the year was 8.7% lower than that reported in 2011 at €2,688m.

Operating profit for the year was down following the confirmation of the night-flight ban at Frankfurt Airport. The result for 2012 was 58.2% lower than the operating profit for 2011 at €104m.

In January Lufthansa Cargo announced that for the full year 2012 it transported 1.7m tonnes of freight and mail, approximately 8.5% below the year–earlier figure. The company stated that despite the decline, its utilisation levels remained stable.

The company believed the decrease in tonnage was attributable to restrained demand in all traffic regions, to which the company reacted by sharply scaling back capacity. All in all, the Lufthansa airfreight subsidiary trimmed capacity by more than 8%. The cuts enabled the cargo airline to hold utilisation levels stable, with a marginal increase to 69.6%.

"We had to contend with an extremely difficult market environment in 2012. So we focused firmly on capacity utilisation and the profitability of our freighter routes," emphasised Lufthansa Cargo Chairman and CEO. "Despite the necessary capacity cuts, we further developed our customer services and brought new destinations, such as Detroit, Montevideo or Tel Aviv, into the route network."

Cargo Revenue by Geographic Segment

Lufthansa Cargo revenues generated in Europe reported a 1.2% increase year over year to €248m. This was the only region that the company reported growth for.

The America and Middle East/ Africa regions saw decreases in repespective revenues of 3.4% and 1.4%, however the region to report the largest decrease in revenues for the cargo business was the Asia/ Pacific region of 16.0%. Despite this, it remained the largest contributing region, with €1,064m.

Group Total

For 2012, the Lufthansa Group reported that its revenues increased by 4.9% to €30.1bn.

The Passenger Airline Group segment's share of total revenue increased to 75.8% due to higher traffic volumes. Whilst the Logistics segment accounted for 8.8% of total revenue, Lufthansa Technik for 8.1%, Catering for 6.4% and IT Services for 0.9%.

2011

Cargo Total

Lufthansa Cargo described the year as being "dynamic", with its freight markets split between growing German and America markets and "cooling" demand in China and India. In the year, Lufthansa Cargo increasingly switched capacities from Asia to North America.  Revenue was up 5.3% at €2,943m, however profits were down sharply with EBIT (Earnings Before Interest and Tax) 25.6% lower at €244m.

Profits were also depressed by higher fuel costs, as its operating result fell from €310m to €249. Although this does represent a sharp fall in profits, 2010 represented a record high and margins remained strong in 2011 at over 9%.

In addition, operations were impacted by a temporary night flight ban which was imposed in October 2011, at Frankfurt Airport, which Lufthansa Cargo said had cost the company €20m in profit. “There is a real danger of Frankfurt losing its position as the best and most attractive air freight hub in Europe,” emphasised Karl Ulrich Garnadt, CEO of Lufthansa Cargo. The company estimated that a permanent night-flight ban would deprive Lufthansa Cargo alone of major express connections and cost the company €40m in profit in 2012, and a three-digit million euro number in turnover.

Around 50% of Lufthansa Cargo's business was high-value express cargo.

Group Total

Group revenues increased 8.6% to €28.73bn in 2011 from the 2010 restated figure of €26.5bn.

Passenger transportation contributed 69.2% of the total revenue, while Lufthansa Cargo contributed 9.1%. The two divisions saw the most significant revenue increases across the company as passenger and cargo transport revenues increased by 6.6% and 5.3% respectively.

2010

Cargo Total

Lufthansa Cargo recorded an operating result of €310m for 2010. This corresponds to an increase of €481m compared with the previous year (2009: minus €171m). The operating margin rose as a result by 19.9 percentage points to 11.1%.

Revenue went up by 43.2% to €2.8bn (2009: €2.0bn).

The traffic revenue included in total revenue rose by 42.4% to €2.6bn (2009: €1.9bn). Charter revenue, a component of traffic revenue, fell by 54.3% to €71m. This was due to the charter partnership with DHL Express coming to an end and transports shifting to the joint venture AeroLogic in mid 2009.

Group Total

The Group's external revenue increased in total by 22.6% to €27.3bn*. The Passenger Airline Group's share of total revenue went up to 74.0%, largely due to the better course of business and changes in the group of consolidated companies. While the revenue share of the Logistics segment rose to 10.1%, the other segments' shares fell accordingly.
2009

Cargo Total

In 2009, Lufthansa Cargo achieved an operating result of minus €171m. This represented a decline of €335m in 2009 compared to the previous year (2008: €164m). As a consequence, the comparable operating margin decreased by 14.2 percentage points to minus 8%.

Revenues declined by 32.9% to €2.0bn (2008: €2.9bn). Traffic revenues contained in the sales revenues dropped by 33.2% to €1.9bn (2008: €2.8bn). Charter revenues as a component of traffic revenues dropped by 56.0% to €155.1m. The cause of this was the termination of the charter cooperation with DHL and the shift of the transport to the joint venture AeroLogic.

Group Total

Lufthansa's revenues declined by €2.56bn and posted an operating profit of €130m. The group earned about €1.2bn less than during the previous year. The past year's figures were burdened by economy-related weaker demand and the disproportionate decline in average yields in the passenger business segment, both consequences of the financial and economic crisis.

2008

Cargo Total

Lufthansa Cargo was able to improve its operating result. In 2008 it achieved an operating result of €164m, an increase of €28m. The comparable operating margin increased by 0.5 percentage points to 6.2%.

Sales revenues increased by 6.3% to €2.9bn (2007: €2.74bn). Traffic revenues once again accounted for the largest part of this figure in 2008, increasing by 6.7% to €2.8bn. Charter revenues, part of the sales revenues, increased by €37.8m to €352.1m, largely resulting from the cooperation with DHL.

Group Total

In March 2009 the Lufthansa Group announced that it had generated revenues totalling €24.9bn, a year-on-year increase of 10.9%. The traffic revenue rose by 13.8% to €20bn. Besides the full consolidation of SWISS in the first half of 2008, this was mainly due to the increased passenger figures with currency adjusted higher average revenues in the Passenger Transportation business segment. During the reporting period, the Group's operating income increased by altogether 12.1% to €27bn.

Operating expenses rose to €25.6bn during the past year, mainly as a result of the rise in fuel costs to €5.4bn. This was equivalent to an increase of 39.3%. This increase was due to price and quantity-related factors, as well as the change in the scope of consolidation with the full consolidation of SWISS in the first half of 2008.

The Group recorded an operating result of €1.35bn in 2008, €24m less in comparison with the record figure in 2007. The decline can mainly be attributed to the negative developments in the Passenger Transportation business segment. The Group posted a result of €599m. Last year this figure was at €1.7bn, however, it included €503m of profit from the sale of the shares in Thomas Cook, as well as book gains of €82m from the repurchase of own stock by WAM Acquisition S.A.

Lufthansa's capital expenditure during the reporting period totalled €2.2bn, of which €1.3bn were spent on the expansion and modernisation of the fleet and €214m were spent on the acquisition of a minority stake in the JetBlue Airways Corporation on 22 January 2008. Operating cash flow totalled €2.5bn.

2007

Cargo Total

In March 2008 one of the market's leading players, Lufthansa Cargo, still appeared optimistic about its own prospects, despite recent suggestions in some quarters of tougher times to come in 2008 for the international air cargo industry.

During a briefing held in Frankfurt, Germany, to discuss what the German carrier claimed were its generally strong 2007 operating results, senior executives suggested that Lufthansa Cargo was expecting to continue that "positive trend" in 2008. "In fiscal 2008, Lufthansa Cargo expects to build on the good operating results which it returned in 2007."

On the financial side, those "good operating" results for 2007 included a 66% jump in the organisation's operating profit, compared with the previous year, to €135.6m, even though revenue dropped by just under 4% to €2.74bn.

Traffic-wise, Lufthansa Cargo transported 1.8m tonnes of freight and mail in 2007, an increase of 2.6% on the previous year. The carrier's overall cargo load factor was up by 1.4 percentage points to 69.1%.

However, Lufthansa Cargo's senior management also referred, directly or indirectly, to a range of problems confronting the industry. Inevitably, there was mention of "uncertainty in the international finance markets and high oil prices". They also admitted that Asia's share in total traffic revenue was down "owing to declining yields".

One key element of Lufthansa Cargo's approach to dealing with such problems had been strict cost control - the workforce was trimmed again in 2007 and major efforts had been made to improve the fuel use efficiency of its 19 MD11 freighters.

Another was its strategy of combining capacity from several companies under one roof, including that of its own freighter operations, the bellyhold space on the 400 aircraft of parent passenger airline Lufthansa, Sino-German joint all-cargo carrier Jade Cargo International and the recently-formed AeroLogic joint venture (with DHL Express) cargo carrier. Such a set-up, claimed Lufthansa Cargo, provided the organisation with great flexibility when it came to matching capacity with demand.

The big question, of course, was if the general air freight market did suffer the sort of slowdown recently suggested by the International Air Transport Association for example, would such strategies be sufficient to enable Lufthansa Cargo to buck the trend?

Group Total

In March 2008 the Lufthansa Group reported revenues for 2007 €22.4bn representing growth of 13%. Traffic revenue increased by 14.4% to €17.6bn. As of the third quarter of 2007, the figures also included the first time consolidation in the Group accounts of SWISS International Air Lines for the July to December period.

Lufthansa posted an operating result of €1.4bn for 2007. This represented an increase of 63.1%. The increase by two percentage points in comparison with the previous year reflects the good performance in all the business segments.

The Group posted book gains of about €503m from the sale of its shares in Thomas Cook AG. The Group result consequently rose to €1.7bn (€803m).

Lufthansa invested a total of €1.4bn in 2007, of which more than €1.1bn were invested in the purchase of new aircraft.

2006

Cargo Total

In March 2007 Lufthansa Cargo reported that in 2006 revenue increased 3.4% to €2.8bn and traffic revenue by 3.6% to €2.7bn. Adjusted for exchange rate effects, revenue growth was 3.8% due mainly to positive volume trends. Average yields were down slightly on the year (-0.4%).

Other operating income was unchanged at €131m and included book gains of €29m from the sale of shares in time:matters GmbH.

Lufthansa Cargo was able to increase its cargo business by 1.3% to 1.76m tonnes of freight and mail. Sales rose by 3.5% to 8.1bn tonne-km. The cargo load factor improved by 2.7 percentage points.

Group Total

In March 2007 the Lufthansa Group reported revenues of €19.8bn in 2006, representing growth of 9.9%. Traffic revenue increased by 10.4% to €15.4bn. There was a significant rise in the average yields during the reporting period. An increase of 5.2% was registered across the board for all traffic segments.

Other operating income dropped by 9.4% to €1.4bn, in comparison to last year, when higher book gains of around €245m were included, mainly due to the sale of shares in Amadeus and Loyalty Partner.

Operating expenses rose by 6.9% to €20.3bn with the significantly higher cost of kerosene again a major cost factor. A total of €3.4bn was spent on fuel during the reporting period, equivalent to a year-on-year rise of 26% or €693m.

The Lufthansa Group improved its operating profit for 2006 by 46.4% to €845m and the Group result after tax rose by 77.3% to a new record level of €803m. Investments increased to €1.9bn and, as during the previous years, could once again be financed entirely from cash flow.

2005

Cargo Total

In the 2005 financial year the Logistics segment (Lufthansa Cargo) was able to implement higher prices and thus stabilise average revenues. Revenues also increased due to fuel price surcharges that rose by 10.8%. As a result the logistics group increased traffic revenue by 10.2% at €2.6bn. Sales increased from €2.5bn to €2.8bn (+11.5%). Revenue from partial chartering to other airlines also grew to $54.6m.  Together with other segment income of €144m, total segment income grew to €2.9bn.

Segment costs grew disproportionately and increased by 6.9% to €2.7bn. Due to the extreme fuel price increases, material costs grew by 11.3% to €1.8bn. Charter costs also rose considerably because of the additional charter requirements for the DHL J/V.

Lufthansa Cargo also posted operating results of €108m which was a €74m improvement year on year. The measures for minimising costs in their "Excellence + Growth" strategy were critical to this result. The segment result of €152m was also considerably better than the previous year when only €59m was achieved.

Group Total

In March 2006 Lufthansa, Europe's second-largest airline, reported that operating profit was €577m in calendar year 2005, up 51% from €383m the previous year.

The German carrier credited strong passenger growth in Asia and a doubling of cargo earnings that outweighed soaring fuel prices. It expects this year's profit to match or exceed 2005 results.

2004

Cargo Total

In April 2005, Lufthansa Cargo reported an operating profit of €33.5m for its 2004 financial year, an improvement of €50m on 2003 when it made an operating loss of €16m. Turnover grew strongly by 14% to €2.47bn, tonnage rose 10.7% to 1.75m tonnes of cargo and mail, and volumes increased 12.3% to 7,961 freight tonne kilometres (FTKs). The cargo load factor also improved by 1.4 percentage points to 67%. Growth was driven by the recovering world economy, the DHL intercontinental joint venture launched last spring, the takeover of US Airways' freight capacity on ex-Europe flights, rising sales through the WOW alliance network and new cargo management contracts for several regional passenger airlines. But profits were hit by a 36% rise in fuel costs to €332m and the continued rise in the euro, in which the airline has 40% of its revenues but 62% of its costs. Moreover, average yields dropped as much as 10%.

For 2005, Lufthansa Cargo chairman Jean-Peter Jansen said growth would be lower than in 2004 due to the slow German air cargo market, rising fuel costs, the high euro exchange rate and continuing pressure on yields because of imbalanced traffic flows. CFO Stephan Gemkow said the airline hoped for improved profits and noted yields had been stabilised in recent months. The airline would focus this year on further revenue improvement and cost reduction measures under its Excellence + Growth programme that was designed to contribute €233m to the bottom line by the end of 2006. This included reducing staff levels by the equivalent of 480 full-time jobs by the end of 2006.

On plans for cargo cooperation with Swiss Worldcargo as part of the Swiss acquisition by Deutsche Lufthansa, Jansen said the two sides would seek the highest possible level of synergies but did not disclose any firm plans. The much smaller Swiss Worldcargo generated revenues of CHF442m in 2004. It transported 208,165 tonnes, generated traffic volume of about 1.14bn FTKs and achieved a load factor of 86.3%. In addition to marketing bellyhold capacity on Swiss passenger aircraft, it offers freighter capacity in cooperation with several international airlines, including Korean Air Cargo. Based on 2003 world air cargo market share figures, Lufthansa Cargo (7%) and Swiss Worldcargo (1.3%) would jointly still remain behind the Air France-KLM group, the new international air cargo market leader with a combined market share of about 8.8%.

Lufthansa Cargo also announced that the new Chinese airline Jade Cargo International, in which it owns 25%, would launch scheduled flights within China and to Asian destinations from its Shenzhen base this autumn with three freighter aircraft. The freighter type had not yet been decided. The planned launch in spring 2005 with charter flights had to be delayed due to changes to Chinese aviation laws.

Operational Analysis Expand

Operations: Overview
Lufthansa Cargo Global Network
Source: Lufthansa Cargo / Transport Intelligence 

Lufthansa Cargo is the service provider for the logistics business in the Lufthansa Group. Its operating hubs are located in Frankfurt, Munich, Leipzig-Halle and Vienna and it serves a global network of 274 destinations  in over 106 countries worldwide.

The company has 18 Boeing MD-11 freighters of its own, each with a maximum capacity of 534 cu m. This is supplemented by the freight capacities of the Lufthansa and Austrian Airlines passenger fleets as well as the equity investment AeroLogic.

The shareholders of AeroLogic GmbH are Lufthansa Cargo and DHL Express, which each hold 50%. The two companies are the sole users of the capacities of the eight Boeing 777F freighters, with Lufthansa Cargo mostly using capacity at weekends.

The freight capacities of Lufthansa subsidiary SWISS and stake Brussels Airlines are not marketed directly by Lufthansa Cargo, but the group nevertheless enjoys a close partnership with the freight divisions of these airlines.

Lufthansa Cargo also has further airline cooperation agreements with SAS Cargo, Singapore Airlines Cargo, Japan Airlines Cargo, Air China Cargo, Eva Air Cargo, Lan Cargo and South African Airways Cargo.

The composition of Lufthansa's logistics capacity is 47.4% freight on passenger aircraft, 42% on Lufthansa Cargo freighters, and 7.6% on chartered freighters or on aircraft belonging to joint ventures, with the remaining 3% accounted for by road feeder services.

Overview
Destinations 274
Countries 106
Fleet Size 622 aircraft (20 Cargo)
Operating Hubs Frankfurt, Munich, Leipzig-Halle, Vienna
Source: Lufthansa
Operations: Traffic Volumes and Cargo Load Factor

2013

Lufthansa's Available Freight Tonne Kilometres again declined in 2013, with the total figure of 12,490m representing a 0.34% contraction on the previous year.

Sales were essentially flat, with the RFTK figure rising marginally (0.05%), to 8,731m.

The impact of these results was to increase the cargo load factor to 69.9% (a 0.3 percentage point increase).

2012

Available transport volumes decreased to 12,532m tonne-km in 2012, sales also decreased to 8,727m tonne-km. This led to a cargo load factor of 69.6% in the 2012 financial year (2011: 69.5%). The transported volumes of freight and mail decreased to 1.72m tonnes from 1.89m tonnes in 2011.
Note: A Revenue Freight Tonne Kilometre (RFTK) denotes one tonne of cargo transported one kilometre.
Operations: Traffic Volumes and Cargo Load Factor []
  2008 2009 2010 2011 2012 2013
Revenue Freight Tonne Kilometres 8283.00 m 7425.00 m 8905.00 m 9487.00 m 8727.00 m 8731.00 m
Available Freight Tonne Kilometres 11681.00 m 12584.00 m 12564.00 m 13647.00 m 12532.00 m 12490.00 m
Load Factor 65.80 % 63.60 % 70.90 % 69.50 % 69.64 % 69.90 %
Export to Excel      Source: Lufthansa,  Last update: 14/07/2014

Source: Lufthansa
Operations: Traffic Volumes by Geographic Location % to Total
Operations: Traffic Volumes by Geographic Location % to Total [RFT] Convert to
  2007 2008 2009 2010 2011 2012 2013
Americas 3407.00 m 3398.00 m 2296.00 m 3676.00 m 4035.00 m 3774.00 m 3765.00 m
Asia Pacific 3951.00 m 3808.00 m 3369.00 m 4169.00 m 4327.00 m 3879.00 m 3923.00 m
Africa/Middle East 579.00 m 622.00 m 645.00 m 693.00 m 743.00 m 720.00 m 685.00 m
Europe 515.00 m 455.00 m 415.00 m 368.00 m 381.00 m 354.00 m 358.00 m
Export to Excel      Source: Lufthansa,  Last update: 14/07/2014

Source: Lufthansa
Operations: Cargo and Mail Volumes
Operations: Cargo and Mail Volumes [] Convert to
  2008 2009 2010 2011 2012 2013
Cargo and Mail (Tonnes) 1.70 m 1.52 m 1.80 m 1.89 m 1.72 m 1.72 m
Export to Excel      Source: Lufthansa,  Last update: 14/07/2014

Source: Lufthansa
Operations: Cargo and Mail Volumes by Geographic Location % to Total
Operations: Cargo and Mail Volumes by Geographic Location % to Total [ton] Convert to
  2006 2007 2008 2009 2010 2011 2012
America 463000.00 501000.00 483000.00 420000.00 525000.00 520000.00 512000.00
Asia Pacific 461000.00 477000.00 465000.00 418000.00 515000.00 466000.00 468000.00
Africa/Middle East 108.00 103.00 114000.00 125000.00 139000.00 141000.00 140000.00
Europe 727.00 724.00 634000.00 556000.00 616000.00 598000.00 595000.00
Export to Excel      Source: Lufthansa,  Last update: 14/07/2014

Source: Lufthansa
Operations: 2015 News

2015

December - Lufthansa Cargo and ANA Cargo have announced the expansion of their joint network between Europe and Japan by adding connected destinations in Japan with Fukuoka on the main island of Kyushu and Sapporo on the north island.

It is expected that starting from December, ANA flights from Tokyo Haneda to Fukouka Airport will be able to be booked via both partners' booking systems. The Area Manager Europe and Africa of Lufthansa Cargo said of the agreement, "Thanks to the Joint Venture we can connect the wide European network of Lufthansa Cargo, with the direct connection of both partners to Japan and the continental de-feeder flights of ANA."

The Project Manager Cooperations, ANA Cargo added "Fukuoka and its region are important centres for the steel and automotive industries, as well as for semiconductor technology, electronics, environmental and biotechnology," adding "These are sectors which will substantially profit from air freight."

October - Lufthansa Cargohas announced Ho Chi Minh, Vietnam is to become a permanent fixture of the Lufthansa Cargo network Freighter service.

Following the completion of successful test phase over the summer months, the airline intends to fly a Boeing 77F weekly to Ho Chi Minh City.

The freighter is expected to depart every Thursday from Frankfurt, Germany, for Ho Chi Minh City via Mubai, India, and will finally terminate at Hong Kong. The Vice President, Asia Pacific, at Lufthansa Cargo said, "Using our flexible network management we will be able to effectively meet demand. We are constantly working on making our network in the Asia-Pacific region even more attractive for our customers."

August - Lufthansa has announced its cargo volumes for the first half of 2015. During this period Lufthansa Cargo carried 811,000 tons of freight and post, representing a 0.5% increase year-on-year. Load factor was at 67.6%, down 2.5 percentage points. Lufthansa Cargo states that it recorded 4% freight growth on its American and African routes, while sales in Europe and Asia were down slightly.

CEO and Chairman of Lufthansa’s executive board said, "After an exceptionally good start to 2015, we were aware of the challenging market situation again in the second quarter. We are monitoring the market very carefully and can react by adjusting our routes flexibly and quickly to changes in demand."

In addition to this announcement Lufthansa Cargo has incorporated the Brazilian city of Natal into its network and plans to offer an additional service to and from Vietnam.

January - Lufthansa Cargo announced that it transported 1.7m tonnes of freight and mail over 2014, a year-on-year fall of 2.7%. The company states that, despite a slight decline in transported cargo volume, it was able to maintain its capacity utilization through 2014 with a cargo load factor of 69.7%, 0.2 percentage points lower than 2013’s figure.

Over 2014 Lufthansa Cargo focused on a flexible and demand-driven management of its capacities with the aim of boosting yields. At the same time, the freight airline invested in its network, adding Milan in Italy, Lagos in Nigeria and the Tunisian capital Tunis to its destinations. In addition, business with sectors like the oil and gas industry played a stronger role for Lufthansa Cargo.

“Competition on the market was very fierce again last year”, said Chairman of the Executive Board and Chief Executive Officer of Lufthansa Cargo. “The fact that we continue to fly in this environment with an unchanged high capacity utilization rate, testifies to the success of our network management and strength of our global offerings and sales.”

Lufthansa Cargo also announced that over 2015; a new IT system for cargo handling is to be rolled out world-wide, marketing of express products is to be further reinforced and that preparations for the new air freight terminal in Frankfurt, Germany, had begun.
Operations: 2013 News

2013

September - Lufthansa Cargo announced that it had introduced five Boeing 777 freighters into its fleet to increase fuel efficiency and tonnage as well as reduce noise levels. The first three destinations scheduled for the aircraft were Atlanta, Chicago and New York in the US.

The Boeing 777F, list price US$270m, was able to remain in the air for ten and a half hours with a payload of 103 tons. During that time it could fly over 9,000 km non-stop. In addition, the company stated that the aircraft met the strictest noise protection standards in international civil aviation.

"Thanks to its outstanding technical performance and reliability, the freighter is entering new dimensions. It also marks a milestone on our ambitious path to lowering specific emissions by 25% until 2020", said the Board Member for Operations Lufthansa Cargo AG. Modernising the fleet was one of six projects of the Lufthansa Cargo 2020 future programme.
May - Lufthansa Cargo signed an agreement with IATA enabling electronic Air Waybills (eAWB) to be used more conveniently by its customers.

Following the IATA multilateral electronic air waybill standard, forwarders needed to sign only one agreement with IATA to gain acceptance from multiple carriers for their eAWB. All signatory airlines were then automatically included in the accord.

The agreement spelt out clear rules on the usage of the eAWB and rendered complex bilateral eAWB agreements on legal aspects and interfaces between carriers and freight forwarders unnecessary.

Lufthansa Cargo had been an influencer in pushing the initiative and had tested its practical viability in a trial run since last November. "This industry-wide agreement is a major milestone on the road towards a completely paperless air cargo transport," emphasised Lufthansa Cargo's CEO and Chairman. "Both our customers and we as an airline will profit from easier utilisation of the eAWB as well as from more efficient and faster processes."

Lufthansa Cargo planned to switch entirely to the use of eAWB by 2015. In the course of this year, the eAWB was to become standard for transports from all German stations to all destinations in the global network of Lufthansa Cargo. More than 60 of the company's customers worldwide had already signed up to using the eAWB.
April - Lufthansa had been brought to a standstill by a strike of a large number of its German employees. Monday 22 April would see almost all flights in Europe cancelled as well as "massive flight cancellations and delays ….for long-haul flights beginning Sunday April, 21" according to a company press release.

Lufthansa Cargo would be severely affected by the strike with the division issuing a statement that said it "will only be able to guarantee emergency operations in both export and import" and asking customers to "re-schedule planned drop-offs and pick-ups to before or after the strike." The company also published a list of five cargo flights from Frankfurt to Johannesburg, Shanghai, Chicago, Guangzhou and Quito which were scheduled to take-place under a "special flight plan".

The industrial action was designed to be a "warning strike" by the Verdi trade union which included ground crew at Lufthansa cargo operations. They were demanding a 5.2% pay increase and an assurance of no compulsory job losses. The company criticised the action as being "out of proportion" at what it said was an early stage of negotiations.

This was taking place around a backdrop of restructuring at Lufthansa. In an attempt to reduce its cost base the airline was placing greater reliance on its subsidiaries based outside Germany which had more competitive manning levels and pay rates. Although Lufthansa remained profitable, it had shrunk its cargo fleet aggressively over the past year and a half in the face of a sharp downturn in demand. At a wider level, Lufthansa was threatened by a combination of low-cost airlines on routes within Europe and the Gulf-based carriers on inter-continental business.

Over the past year, Lufthansa had suffered from a series of strikes by both its ground crew and its pilots centred mainly around pay, which for certain groups of employees – such as pilots – was very high, even by the standards of the 'flag carrier' airlines.
March - Lufthansa Cargo announced it was adding MD-11 freighter services to Guadalajara, Mexico beginning March 2013. The cargo airline would connect Mexico with its Frankfurt hub.

The twice-weekly flights would be from Frankfurt to Chicago and then to Mexico City and would be operated on Wednesdays and Saturdays. The return flights (also with a stopover in the US), were on Thursdays and Sundays.

According to Lufthansa Cargo, Guadalajara had evolved into a major business centre, especially for high-tech companies in the electronics and information technology sector. Over the past ten years, more than 600 companies from the high-tech sector had established bases in the region. The automotive industry had also found the region around Guadalajara an ideal location for production plants.

"Industry in the Guadalajara region has grown tremendously in the past few years," noted Lufthansa. "With the new services, we are strengthening our presence in the Mexican growth market and making our global route network even more attractive to our customers."
January - Lufthansa Cargo had announced that for the full year 2012 it transported 1.7m tonnes of freight and mail, approximately 8.5% below the year-earlier figure. The company stated that despite the decline, its utilisation levels remained stable.

The company believed the decrease in tonnage was attributable to restrained demand in all traffic regions, to which the company reacted by sharply scaling back capacity. All in all, the Lufthansa airfreight subsidiary trimmed capacity by more than 8%. The cuts enabled the cargo airline to hold utilisation levels stable, with a marginal increase to 69.6%.

"We had to contend with an extremely difficult market environment in 2012. So we focused firmly on capacity utilisation and the profitability of our freighter routes," emphasised Lufthansa Cargo's Chairman and CEO. "Despite the necessary capacity cuts, we further developed our customer services and brought new destinations, such as Detroit, Montevideo or Tel Aviv, into the route network."

In the autumn of 2013, Lufthansa Cargo was awaiting delivery of the first two of five Boeing 777 freighters on order. The company stated that the world's most efficient freighter aircraft of its class was integral to its "Lufthansa Cargo 2020" innovation strategy.
Operations: 2012 News

2012

September - Lufthansa announced plans to build a logistics centre at Frankfurt Airport. The building, which would replace the existing 30-year-old Lufthansa Cargo Centre, was due to go into operation in 2018.

"We are investing in the future and in our Frankfurt base," Lufthansa's CEO and Chairman stressed. Frankfurt would remain the central hub for the Lufthansa Group's cargo business, despite the night-flight ban. However, the night-flight ban meant considerably adjusting the original plans.

The logistics centre would be built mainly on Lufthansa Cargo's existing site in the northern part of Frankfurt Airport, with technological infrastructure guaranteeing faster turnaround times for shipments. "Building a new logistics centre is a major component of our 'Lufthansa Cargo 2020' strategy," Lufthansa Cargo's CEO and Chairman emphasised. "The new facility will enable us to take a quantum leap in the logistics process and will make the company fit for the challenges of the future."

Construction of the main building was scheduled to begin in 2014. Since the air cargo terminal would be built on the existing site, the area would have to be cleared and prepared over the coming months. Some processes would be relocated to other areas. However, the company stated operations would continue while construction work on the building was in progress.

April - A German court in Leipzig upheld a night-flight ban at Frankfurt Airport between 11 p.m. and 5 a.m. local time.

The ruling came after a Hessen court ruled in October 2011 that 17 night-flights would be banned when FRA's fourth runway opened in the same month following resident complaints of aircraft noise from nearby Russelsheim and Offenbach. Lufthansa Cargo operated 10 of those scheduled nighttime slots.
March - Lufthansa Cargo offered a worldwide express service for urgent shipments. The "Courier. Solutions" service provided the fastest transit and shortest delivery times in the Lufthansa Cargo. The company announced that the service had has no weight limits.

Lufthansa Cargo was offering this new product in cooperation with time:matters, a Lufthansa Cargo Group company that specialised in express logistics services. Customers could drop off their shipment at Frankfurt Airport up to 90 minutes before departure. At various other airports, the minimum drop-off time was one hour before departure. At Frankfurt, the transit time was 60 minutes, while the transfer time at Munich was 50 minutes.

The Vice President Product Management at Lufthansa Cargo said "with the shortest handling times, personal courier accompaniment during transit and round-the-clock, proactive shipment surveillance we can offer the speediest assistance when trade fair items or medicines, for example, are urgently needed on the other side of the world."
March - Lufthansa Cargo announced it was adding a route to Chongqing, China when its summer flight schedule began on March 25. The company was offering flights to 303 destinations in 99 countries.

Chongqing would be served with four flights weekly, operated by Lufthansa Cargo's MD-11 freighters. Other newcomers in the timetable - also thanks to the expansion of the network of Lufthansa passenger services - were Shenyang in northeastern China and Qingdao (Tsingtao) in Shandong province.

Flights to Detroit, US were to be increased to twice-weekly connections. Services to Detroit commenced initially in January with a once-weekly flight in the Lufthansa Cargo freighter network.

In South America, the company was adding twice-weekly MD-11 flights from Frankfurt to Montevideo, Uruguay.

Back in the timetable was Kolkata, India. Flights were operated to the Indian city last summer, but were discontinued in recent months. Once-weekly direct flights from Frankfurt were now available again in the summer flight schedules.

"We have selectively extended our route network and brought new and attractive growth markets into the timetable," noted a Lufthansa Board Member for Product and Sales. "We are expanding our presence in China, the world's biggest air freight market, and now laying on freighter connections to a total of six Chinese destinations."
January - Lufthansa Cargo announced that it had started operating its first flights between Frankfurt and Detroit, Michigan (US). The route connects Germany with the centre of the US automotive industry every Monday (after the beginning of the summer schedule: each Sunday) by an MD–11 freighter in the cargo carrier's fleet. The subsequent return flight would stop off in New York on the way back to Frankfurt.

"The new freighter connection supplements the daily flights operated by Lufthansa passenger aircraft, and offers our customers more capacity and greater flexibility," said Lufthansa Cargo's Vice President, The Americas. "The automotive and pharmaceuticals industries, especially, are fuelling the growing demand for fast and reliable transports to and from Detroit."

Starting in March, Lufthansa Cargo planned to expand its Detroit operations to twice per week. This connection was the seventh destination served by the cargo airline's freighter network in the US. Along with the services operated by the Lufthansa passenger business, direct flights were now available to 17 airports in the US.
January - Lufthansa Cargo boosted tonnage to record levels in 2011. The cargo airline carried approximately 1.9m tonnes of freight and mail in 2011, an increase of 5% compared to 2010.

The airline raised capacity over the twelve months by 8.6%. The company attributed the increase was to the integration, since the second half of 2010, of the capacities of aircraft in the fleet of Austrian Airlines and the expansion to eight Boeing 777 freighters in the fleet of the AeroLogic joint venture. In an increasingly difficult market environment, Lufthansa Cargo lifted sales of revenue freight-tonne km by 6.5%, so that capacity utilisation reached 69.5%; a slight decline from 70.9% in 2010.

"Especially in our German home market, we made full use of strong export demand to gain market shares. On the other hand, the economic climate in the important Asian airfreight market became increasingly bleak over the course of the year and led to over-capacities and increased competition for all airlines in the airfreight industry," observed the Lufthansa Cargo CEO and Chairman.

"Lufthansa Cargo is excellently positioned in all growth markets. We will stay on our successful course and adjust our capacities flexibly in line with demand," he commented. Of crucial importance for the company's future, however, is the impending ruling by the highest Federal Administrative Court in Leipzig on the number of permissible night flights in Frankfurt. "Germany profits from a strong and successful airfreight industry, which must not be decoupled for several hours, daily, from global trade flows. A night-flight ban would deal a severe blow to the entire industry and threaten thousands of jobs in Germany, not only in the logistics industry" he concluded.
Operations: 2011 News

2011

December - Lufthansa Cargo begun operations at its facility for temperature-sensitive freight in Frankfurt, Germany. The Lufthansa Cargo Cool Centre was built in the space of just six months.

The facility was equipped with four cool storage rooms for four different temperature ranges as well as a deep-freezer cell on an area of 4,500 sq m. All temperature-controlled shipments carried by the airline in Frankfurt would pass through the facility.

The Lufthansa Board Member for Product and Sales, said: "Our Cool/td product is assuming ever-increasing importance for Lufthansa Cargo thanks to growth rates of 15%. The Lufthansa Cargo Cool Center will enable us to ship temperature-controlled freight faster, more reliably and more efficiently at our Frankfurt hub, and further expand our position as a leading provider of cool transports."

Lufthansa Cargo earmarked substantial capital expenditure last year in the Cool/td product. Besides investing in the development of the Opticooler, the industry's most efficient cooling container, the cargo carrier commenced operations at its first international pharmaceutical hub at Hyderabad in India.
October - Lufthansa Cargo underlined its fears regarding the consequences ensuing for the international logistics industry from the provisional night-flight ban placed upon Frankfurt Airport from October 30, 2011 by a regional court.

Following the ruling from the administrative court in Hesse, issued a few days before the introduction of Lufthansa's winter flight schedules, the company had put together an emergency timetable for the period after October 30. A number of flights had had to be relocated to daytime slots or to the early and late hours of the day.

Individual connections – to China, for example – had been cancelled entirely. Other flights bound for China would have to stop over at Cologne/Bonn Airport for several hours after an evening departure from Frankfurt so as to fly on, as originally planned, at night-time in the direction of the Far East. "We will be operating in future with unnecessary take-offs and landings, which will lead to more noise, higher fuel consumption and more costs running into millions," commented the Lufthansa Cargo Chairman.

Furthermore, from January, at least one MD-11 freighter was to be transferred from Frankfurt to Cologne/Bonn Airport. The freighter would operate the overnight flights for the German logistics industry to North America, which could no longer be guaranteed from Frankfurt because of the night-flight ban.

Lufthansa Cargo believed the provisional night-flight ban in Frankfurt was a drastic signal for the German logistics industry. He emphasised: "As export world champion, Germany is reliant on dependable connections to ship air freight to destinations around the globe. Frankfurt Airport plays in that respect a highly important role, since around 40% of German exports is transported by air."

The company said that it was hoping that the Federal Administrative Court in Leipzig (the supreme court of appeal) would allow a minimum of necessary night flights in its final ruling.
October - The fourth runway at Frankfurt airport was opened, yet what Frankfurt's owners and customers had hoped to be a useful improvement to capacity had ballooned into a major crisis for the airport's cargo operations. At 2.8 km the runway would be shorter than the existing facilities and was designed to serve smaller short-haul traffic. Part of the 'Expansion 2020 program', it was the first major part of a development that would also see a new terminal and new cargo handling facilities by 2016. The taxi-ways to the runways would also include a bridge over the neighbouring motorway and another over a high-speed railway.

In order to get this programme past protesting local residents and environmental pressure groups, Fraport, the airport's owner, agreed to certain conditions including greater restrictions on night-flights. The residents and pressure groups who continued to dispute the airport expansion had won a court order banning all night-flights from Frankfurt citing this agreement. The court judgement enacting a ban, which was issued on the 11th October was temporary until the case could be concluded in a higher court in 2012. In the meantime all flights between 23.00 and 05.00hrs would be prohibited from the 30th October.

The immediacy of this decision had dealt a blow to Lufthansa Cargo in particular. It had been forced to adopt emergency winter schedules including scrapping two flights a week to China and even flying freighters to neighbouring, less regulated German airports during the day in order for them to take off for their final destinations during the night. Such had been the disruption that Lufthansa's CEO had even suggested that the new runway should not be opened, circumventing the ban on night flights.

It was unclear what effect this ban would have on air cargo traffic in Europe. Frankfurt was Europe's largest air cargo hub, although belly freight operations would be affected less as there was no restriction on day-time flights. Presumably it would be the freighters and particularly those operating to China and Central Asia that would be affected most. This was all the more painful for Lufthansa as this was a route which they had made particular efforts on. There would be those who benefit from what was likely to be a major – if presumably temporary – restructuring of air freight logistics in Europe. Neighbouring airports in France, the Netherlands but also possibly the new Leipzig-Halle facility which was home to the AeroLogic Lufthansa - DHL joint venture, could see more business. Of even greater threat was the ability of Dubai and the smaller Gulf airports to jump in and grab some trans-shipment business from Frankfurt.

October - Lufthansa Cargo resumed MD-11 freighter to Singapore.

On Tuesdays, the MD-11 freighters would stop off in Mumbai before flying on to Singapore. On the return flight to Frankfurt, they would call at Dhaka in Bangladesh and again in India - this time in Delhi. On Fridays, the flight from Frankfurt stops off in Cairo, Egypt, and in Sharjah, the United Arab Emirates. On Sunday, the way leads back over Dhaka and Delhi to Frankfurt.
September - Lufthansa's fleet modernisation was continued in with the ordering of a further twelve aircraft (two Airbus A380s, one A330-300, four A320s, five Embraer 195s).
July - Lufthansa Cargo announced a tonnage increase of 14.8% in the first six months of 2011.

Capacity was up appreciably year on year. Overall, Lufthansa Cargo raised capacity by 19.7%. The increase was, among others, attributable to reactivation of freighters grounded temporarily in the crisis, expansion of the AeroLogic fleet to a total of eight aircraft and the carrier's marketing since July 1, 2010 of the freight capacities at Austrian Airlines.

Almost all the substantially increased capacity was sold in the market so that the load factor ended the first half at 69.1%. Growth was particularly pronounced in the Americas, where tonnage climbed by 19.5%.

"Lufthansa Cargo has harnessed the robust development of the global economy and sustained the growth momentum from the previous year," said the Lufthansa Cargo Chairman and CEO. "We have made our network even more attractive with the addition of new desti-nations and invested to good purpose in the ongoing development of our products. We posted gains especially in the special services we offer customers to meet their specific needs."
June - Lufthansa Cargo began operating twice weekly MD-11 freighter flights (Thursday and Saturday) to Houston, USA from its hub in Frankfurt, Germany.
April - Lufthansa Cargo was expanding its route network in Asia and offering its customers a new service to Bangladesh; connecting Frankfurt with once-weekly flights to Dhaka. The flights to the capital of Bangladesh, on Wednesdays, would be operated by a Lufthansa Cargo MD-11 freighter.

"Bangladesh has assumed growing importance as a production base for the international fashion industry. Our direct flights to and from Dhaka will shorten the transport time for customers and link them into Lufthansa Cargo's global network," noted the Regional Director South Asia and Middle East of Lufthansa Cargo.

The flight would leave Frankfurt on Wednesdays at 0140 hours, arriving in Dhaka at 1910 hours after a stopover in Mumbai. The return flight from Dhaka would leave on Wednesdays at 2215 hours and was scheduled to land in Frankfurt at 0600 hours on Thursdays after a brief stop in Delhi.

March - Lufthansa's Supervisory Board approved an order for 35 aircraft.

The order included 30 aircraft from the Airbus A320neo family and five Boeing 777 freighters. The passenger planes were planned to be delivered in 2016 and the freighters from as early as 2013.

Employees Expand

Employees    
2015 4,607
2014 4,663
2013 4,589
2012 4,606
2011 4,624
2010 4,517

Products And Services Expand

Mergers Acquisitions Expand

Mergers Acquisitions: 2016 News

2016

August – Lufthansa Cargo has taken over complete ownership of the time:matters Group, which specialises in global same day delivery and time-critical international spare part logistics. The cargo airline, which spun off time:matters as a subsidiary in 2002, had already held a 49% share. The majority 51% shareholding had been held by financial investor Aheim Capital and time:matters management. Lufthansa Cargo and time:matters had already been cooperating successfully on express products. The takeover is in line with the Lufthansa Group's "7 to 1: new concepts for growth" strategy.

"time:matters has established itself in recent years as the leading specialist for same day delivery and emergency logistics in Europe", said the CEO and Chairman of the Executive Board of Lufthansa Cargo. "With time:matters, we are aiming to grow our business in the special segment as well. Our focus is all about maximum reliability, exceptional service and customised solutions", he added. time:matters is to be maintained as an independent company.

The CEO of time:matters commented, "With its technology and service platform, hardly any other logistics company can match time:matters in terms of service and flexibility. Since 2006, we have more than tripled our revenue to over €65m." Miller also believes there is potential for further growth in the segment.

A spokesperson from Aheim Capital said, "After around ten years of intensive cooperation with the time:matters management team, we are pleased to be in a position to hand over to Lufthansa Cargo, a company which, with its employees, is among the most innovative and creative in its industry and therefore represents an excellent platform for future air freight logistics concepts for the Lufthansa Group."
Mergers Acquisitions: 2015 News

2015

June - Lufthansa Cargo and ANA Cargo have announced plans to expand their joint venture for freight consignments on routes from Europe to Japan. The expansion is designed to provide European customers with access to the shared network of the two airlines which is made up of over 90 weekly direct flights between Europe and Japan. The shared network adds more direct connections to the two airlines’ networks, offering faster transit times to shippers.

To begin with customers in Germany, France, the UK and Austria will participate in the partnership. The companies plan for all other European countries to follow step by step. Lufthansa Cargo and ANA Cargo flights currently connect Frankfurt, Munich, Düsseldorf, London Heathrow, Paris Charles-de-Gaulle and Vienna with Tokyo Narita, Tokyo Haneda, Nagoya and Osaka.

As well as sharing their route networks the airlines are also handling freight together at numerous stations in shared warehouses across Japan and Europe.

Chairman and CEO of Lufthansa Cargo, stated that demand has been consistently high since the partnership began, "By the end of April, more than 800 additional consignments had been carried with a total volume of around 940 tonnes".
Mergers Acquisitions: 2014 News

2014

September - Lufthansa Cargo AG and All Nippon Airways (ANA), a Japanese airline, had entered a strategic air cargo joint venture on routes between Japan and Europe. ANA had received antitrust immunity and approval for the joint venture from the Japanese Ministry of Land Infrastructure and Transport after filing for it in spring 2014. In addition, the joint venture had been positively assessed by external counsel for compliance with relevant EU antitrust regulations.

Now ANA and Lufthansa Cargo would jointly manage activities covered by the joint venture including network planning, pricing, sales and handling on all routes between Japan and Europe. Based on a joint contract the two carriers aim to introduce the joint approach on shipments originating from Japan to Europe in winter 2014-2015 and for shipments from Europe to Japan mid-2015.

The joint venture would benefit customers by generating a greater selection of routes and a wider range of service options. Customers would especially profit from a larger and faster network with more direct flights, more destinations and more frequencies. By their moving under one roof at major stations, such as the airports Narita and Nagoya in Japan and Dusseldorf and Frankfurt in Germany, customers would enjoy the services of both airlines at a single location.

Mergers Acquisitions: 2012 News

2012

April - Lufthansa completed the sale of British Midland Ltd. (bmi) to International Airlines Group (IAG), the parent company of British Airways. The completion of the sale took place after close of business on April 19, 2012. The purchase price amounted to £172.5m (€207m).

As price adjustments were agreed as part of the transaction structure, the net purchase price would be determined at the end of the second quarter 2012, at which point the final amount would be transferred. It was expected that the net purchase price would be negative. However, the costs of the transaction for Lufthansa would amortise within one year. The gross purchase price was expected to be reduced by a number of items including agreed deductions for not selling bmi regional and bmibaby prior to the completion of the transaction.

bmi’s underfunded Pension Scheme was to be transferred to the UK Pension Protection Fund. The pension shortfall for the members of the bmi Pension Scheme would be offset to a large extent by a one-off contribution from Lufthansa of £84m to a supplementary pension scheme.

On November 4, 2011, Lufthansa and IAG agreed in principle to the sale of bmi to IAG, prior to a legally binding purchase agreement being signed by both parties on December 22, 2011. The validity of this contract was subject to regulatory approval by the European Commission, which was received on March 30, 2012. By carrying out the transaction, Lufthansa sold a consistently loss-making company.

March - Jade Cargo International, a Lufthansa Cargo/Shenzhen Airlines joint venture that temporarily suspended operations of its fleet of six Boeing 747-400Fs earlier in the month, signed a letter of intent with China’s UniTop Group to restructure the company.

The sale was expected to take two months to complete, and would completely divest Lufthansa Cargo of its 25% stake in the company.
Mergers Acquisitions: 2011 News

2011

September - DHL Global Forwarding acquired Lufthansa's 50% ownership in joint venture company LifeConEx. The end–to–end life sciences cold chain logistics provider was now a 100% DHL subsidiary.

"After running the innovative specialised logistics service together for six years, DHL Global Forwarding and Lufthansa Cargo agreed that a change in ownership would best prepare LifeConEx to further grow its market position" stated Roger Crook, CEO of DHL Global Forwarding and Freight, and Deutsche Post DHL Board Member sponsor for the Life Sciences & Healthcare Sector.

Established in 2005, the joint venture became the global leader in its niche market. DHL would utilise its global presence to leverage LifeConEx's capabilities and expand its cold chain services. While furthering its cooperation with Lufthansa, DHL would also maintain LifeConEx's neutrality in carriers, forwarders and packaging providers. This investment also supported Deutsche Post DHL's 2015 group and Life Sciences sector strategy.

David Bang, CEO of LifeConEx would continue to lead the company and was committed to overseeing the ownership transition for continued development and success.
June - Following approval from the Japanese antitrust authorities, All Nippon Airways (ANA) and Lufthansa launched a strategic joint venture on Japan-Europe routes.

 

Alliances

Sister Concerns

Other sister concerns

Major Contracts Listing Expand

Major Contracts: 2014 News

2014

March - Jan de Rijk Logistics announced that it had signed a prolongation agreement for road feeder services with Lufthansa Cargo. Under the contract Jan de Rijk Logistics would continue to provide European trucking services to Lufthansa Cargo as selected supplier at their main European hub at Frankfurt Airport, Germany.

Lufthansa Cargo's focus was on airport to airport cargo services. The network currently contained more than 300 destinations in approximately 100 countries served by freighters, the combined cargo capacity offered by the Lufthansa and Austrian Airlines passenger aircraft or road feeder services. The majority of cargo was transferred via the airport of Frankfurt am Main. Jan de Rijk Logistics would make use of its fleet of 600 vehicles across Europe to serve the contract.


 

Information Systems

  • ASTRIT
    Name: ASTRIT
    Vendor:
    Description:
    Allows the customer to check on the status of shipments and any td.Services that have been booked with a phone call - via ASTRIT,  a computerised telephone information service.  An e-mail or fax – whichever is preferred – with an up-to-the-minute status report.
    Capabilities: 
  • information about shipment and td.Services
  • additional menu options (repeat function, request for booking information)
  • possibility to authorise and thus make bundled inquiries concerning individual AWB lists
  • automatic forwarding of lists to e-mail address or fax number
  • TrackIT
    Name: TrackIT
    Vendor:
    Description:

    Technology to enable tracking of shipments.

    Capabilities: 
    • enter AWB number for immediate access to standard information.
    • personalised tracking via myCargo provides further information to help with subsequent planning.

Regions

Vertical Sectors

  • Automotive

    Automotive: 2015 News

    2015

    December - Lufthansa Cargo and ANA Cargo have announced the expansion of their joint network between Europe and Japan by adding connected destinations in Japan with Fukuoka on the main island of Kyushu and Sapporo on the north island.

    It is expected that starting from December, ANA flights from Tokyo Haneda to Fukouka Airport will be able to be booked via both partners' booking systems. The Area Manager Europe and Africa of Lufthansa Cargo said of the agreement, "Thanks to the Joint Venture we can connect the wide European network of Lufthansa Cargo, with the direct connection of both partners to Japan and the continental de-feeder flights of ANA."

    The Project Manager Cooperations, ANA Cargo added "Fukuoka and its region are important centres for the steel and automotive industries, as well as for semiconductor technology, electronics, environmental and biotechnology," adding "These are sectors which will substantially profit from air freight."

  • Consumer/ Retail

    Consumer/Retail: 2009 News

    2009

    October - Lufthansa Cargo and Hermes Transport Logistics announced that they were increasing their level of cooperation. Since early August, Lufthansa had handled the logistics of all incoming shipments arriving at Leipzig Airport for the wholly-owned subsidiary of the otto group. Aside from handling all imports, Lufthansa Cargo was responsible for arranging and loading truck transports to the Hermes bases at Haldensleben und Altenkunstadt. In future, the freight would be flown direct to Leipzig/Halle by Boeing 777 freighters in the fleet of Lufthansa Cargo's AeroLogic joint venture or be trucked by road from Frankfurt to the Hermes bases.

    "Our extreme flexibility and deployment of low-emission Boeing 777 freighters make a convincing case," said the Lufthansa Cargo Vice President Handling Germany. "Our network, customised to our customers' requirements, guarantees the fastest connections, high cost-efficiency and a host of synergy effects." Eckhardt Fechtner, General Manager Hermes Transport Logistics, added: "Shorter transit time for shipments and the environmental benefits resulting, among others, from fewer road service transports within Germany are major competitive gains for Hermes Transport Logistics. We are delighted to cooperate with Lufthansa Cargo at our most important distribution centre in Germany."

    Hermes Transport Logistics imported more than 14,000 tonnes of airfreight to Germany annually, principally from the Far East. The shipments consist largely of textiles.

  • Healthcare/ Pharmaceutical

    Healthcare/ Pharmaceutical: 2011 News

    2011

    September - DHL Global Forwarding acquired Lufthansa's 50% ownership in joint venture company LifeConEx. The end–to–end life sciences cold chain logistics provider was now a 100% DHL subsidiary.

    "After running the innovative specialised logistics service together for six years, DHL Global Forwarding and Lufthansa Cargo agreed that a change in ownership would best prepare LifeConEx to further grow its market position" stated Roger Crook, CEO of DHL Global Forwarding and Freight, and Deutsche Post DHL Board Member sponsor for the Life Sciences & Healthcare Sector.

    Established in 2005, the joint venture became the global leader in its niche market. DHL would utilise its global presence to leverage LifeConEx's capabilities and expand its cold chain services. While furthering its cooperation with Lufthansa, DHL would also maintain LifeConEx's neutrality in carriers, forwarders and packaging providers. This investment also supported Deutsche Post DHL's 2015 group and Life Sciences sector strategy.

    David Bang, CEO of LifeConEx would continue to lead the company and was committed to overseeing the ownership transition for continued development and success.

  • High Tech

    High Tech: 2015 News

    2015

    December - Lufthansa Cargo and ANA Cargo have announced the expansion of their joint network between Europe and Japan by adding connected destinations in Japan with Fukuoka on the main island of Kyushu and Sapporo on the north island.

    It is expected that starting from December, ANA flights from Tokyo Haneda to Fukouka Airport will be able to be booked via both partners' booking systems. The Area Manager Europe and Africa of Lufthansa Cargo said of the agreement, "Thanks to the Joint Venture we can connect the wide European network of Lufthansa Cargo, with the direct connection of both partners to Japan and the continental de-feeder flights of ANA."

    The Project Manager Cooperations, ANA Cargo added "Fukuoka and its region are important centres for the steel and automotive industries, as well as for semiconductor technology, electronics, environmental and biotechnology," adding "These are sectors which will substantially profit from air freight."

  • Industry & Manufacturing

    Industry & Manufacturing: 2015 News

    2015

    December - Lufthansa Cargo and ANA Cargo have announced the expansion of their joint network between Europe and Japan by adding connected destinations in Japan with Fukuoka on the main island of Kyushu and Sapporo on the north island.

    It is expected that starting from December, ANA flights from Tokyo Haneda to Fukouka Airport will be able to be booked via both partners' booking systems. The Area Manager Europe and Africa of Lufthansa Cargo said of the agreement, "Thanks to the Joint Venture we can connect the wide European network of Lufthansa Cargo, with the direct connection of both partners to Japan and the continental de-feeder flights of ANA."

    The Project Manager Cooperations, ANA Cargo added "Fukuoka and its region are important centres for the steel and automotive industries, as well as for semiconductor technology, electronics, environmental and biotechnology," adding "These are sectors which will substantially profit from air freight."

Other related vertical sectors

Logistics markets

  • Air Freight

    Air Freight: 2016 News

    2016

    July - From September 2016, Lufthansa Cargo will offer an online-only booking service for standard air cargo, named 'td.Basic'.

    The new option is suitable for less time-sensitive freight, as shipments will take on average three days more compared to the airline's 'td.Pro' standard offering. Allied to the longer transit time, Lufthansa have stated that simpler background processes and online-only booking will help it offer lower prices.

    The offering is part of the company's new 'CARGO eVOLUTION' strategy, with which Lufthansa Cargo is hoping to advance digitisation and become the number one in the world for air cargo services.

    A Board Member Product and Sales at Lufthansa Cargo, commented: "We are now adding a price offensive to our long-standing quality offensive. Our customers will be able to benefit from Lufthansa quality with particularly price-sensitive cargo as well from September. With this innovative basic offering, we are enhancing our product range and charting a path for growth in the standard cargo segment".
    Air Freight: 2015 News

    2015

    December - United Airlines and Lufthansa have announced plans to enhance their current cooperation to include cargo cooperation by United Cargo and Lufthansa Cargo on routes between the US and Europe. The parties are discussing possible elements of the planned cooperation to create a network for the shipping industry, including, among others, an alignment of information technology services and warehouse facilities.

    The planned cooperation of United Cargo and Lufthansa Cargo is expected to create a more efficient and comprehensive transatlantic cargo network.

    Implementation of this cargo cooperation between United and Lufthansa is subject to finalization of the commercial arrangement and compliance with existing EU and US regulations and necessary government approvals.
    December - Lufthansa Cargo and ANA Cargo have announced the expansion of their joint network between Europe and Japan by adding connected destinations in Japan with Fukuoka on the main island of Kyushu and Sapporo on the north island.

    It is expected that starting from December, ANA flights from Tokyo Haneda to Fukouka Airport will be able to be booked via both partners' booking systems. The Area Manager Europe and Africa of Lufthansa Cargo said of the agreement, "Thanks to the Joint Venture we can connect the wide European network of Lufthansa Cargo, with the direct connection of both partners to Japan and the continental de-feeder flights of ANA."

    The Project Manager Cooperations, ANA Cargo added "Fukuoka and its region are important centres for the steel and automotive industries, as well as for semiconductor technology, electronics, environmental and biotechnology," adding "These are sectors which will substantially profit from air freight."

    October - Lufthansa Cargohas announced Ho Chi Minh, Vietnam is to become a permanent fixture of the Lufthansa Cargo network Freighter service.

    Following the completion of successful test phase over the summer months, the airline intends to fly a Boeing 77F weekly to Ho Chi Minh City.

    The freighter is expected to depart every Thursday from Frankfurt, Germany, for Ho Chi Minh City via Mubai, India, and will finally terminate at Hong Kong. The Vice President, Asia Pacific, at Lufthansa Cargo said, "Using our flexible network management we will be able to effectively meet demand. We are constantly working on making our network in the Asia-Pacific region even more attractive for our customers."
    January - Lufthansa Cargo announced that it transported 1.7m tonnes of freight and mail over 2014, a year-on-year fall of 2.7%. The company states that, despite a slight decline in transported cargo volume, it was able to maintain its capacity utilization through 2014 with a cargo load factor of 69.7%, 0.2 percentage points lower than 2013’s figure.

    Over 2014 Lufthansa Cargo focused on a flexible and demand-driven management of its capacities with the aim of boosting yields. At the same time, the freight airline invested in its network, adding Milan in Italy, Lagos in Nigeria and the Tunisian capital Tunis to its destinations. In addition, business with sectors like the oil and gas industry played a stronger role for Lufthansa Cargo.

    “Competition on the market was very fierce again last year”, said Chairman of the Executive Board and Chief Executive Officer of Lufthansa Cargo. “The fact that we continue to fly in this environment with an unchanged high capacity utilization rate, testifies to the success of our network management and strength of our global offerings and sales.”

    Lufthansa Cargo also announced that over 2015; a new IT system for cargo handling is to be rolled out world-wide, marketing of express products is to be further reinforced and that preparations for the new air freight terminal in Frankfurt, Germany, had begun.
    Air Freight: 2014 News

    2014

    January - Although Lufthansa Cargo was upbeat about last year's performance, its management appeared to be above all relieved that it managed its assets effectively in a weak market, rather than any significant increase in profits.

    Objectively, the cargo volume performance was weak, with Lufthansa Cargo carrying 1.7m tonnes over the past 12 months. In the words of its CEO, "Tonnage almost equalled the previous year's level," although Lufthansa's annual figures report that in 2012 the airline carried 1.9m tonnes, itself a fall of 7% on 2011.

    What appeared to underpin his optimism was that he had been able to fill his planes, effectively achieving a load factor of 69.9% up from 66.9% in 2012.This was certainly higher than the industry average which was in the low 40s percentage-wise.

    It might be suggested that Lufthansa's cost base had also fallen due to lower fuel costs and more efficient aircraft. What also appeared to be the case was that Lufthansa's cargo fleet was shrinking disproportionately as its passenger fleet related belly freight continued to expand.

    Indeed, compared to AirFrance KLM, Lufthansa had ridden the poor market conditions well. Last week AirFrance KLM announced that it was to continue to shrink its freighter fleet with the retirement of two B747Fs, whose costs had become unsustainable. Despite such continuing cuts, AirFrance KLM's Cargo business remained loss making in the third quarter, with a load factor of 61.8%.

    Lufthansa would release its financial numbers in March but press reports quoted Lufthansa spokesmen as suggesting a "high double digit million euros'" of profit for the year. Overall it appeared that Lufthansa Cargo had remained profitable through the effectiveness of its operational management.

    However the strategic issues around both the continuing low growth in the airfreight sector and the threat from Gulf based carriers remained significant barriers to Lufthansa Cargo in exploiting the weakness of others.

    Air Freight: 2012 News

    2012

    April - A German court in Leipzig upheld a night-flight ban at Frankfurt Airport between 11 p.m. and 5 a.m. local time.

    The ruling came after a Hessen court ruled in October 2011 that 17 night-flights would be banned when FRA’s fourth runway opened in the same month following resident complaints of aircraft noise from nearby Russelsheim and Offenbach. Lufthansa Cargo operated 10 of those scheduled nighttime slots.


    April - Lufthansa completed the sale of British Midland Ltd. (bmi) to International Airlines Group (IAG), the parent company of British Airways. The completion of the sale took place after close of business on April 19, 2012. The purchase price amounted to £172.5m (€207m).

    As price adjustments were agreed as part of the transaction structure, the net purchase price would be determined at the end of the second quarter 2012, at which point the final amount would be transferred. It was expected that the net purchase price would be negative. However, the costs of the transaction for Lufthansa would amortise within one year. The gross purchase price was expected to be reduced by a number of items including agreed deductions for not selling bmi regional and bmibaby prior to the completion of the transaction.

    bmi’s underfunded Pension Scheme was to be transferred to the UK Pension Protection Fund. The pension shortfall for the members of the bmi Pension Scheme would be offset to a large extent by a one-off contribution from Lufthansa of £84m to a supplementary pension scheme.

    On November 4, 2011, Lufthansa and IAG agreed in principle to the sale of bmi to IAG, prior to a legally binding purchase agreement being signed by both parties on December 22, 2011. The validity of this contract was subject to regulatory approval by the European Commission, which was received on March 30, 2012. By carrying out the transaction, Lufthansa sold a consistently loss-making company.


    March - Jade Cargo International, a Lufthansa Cargo/Shenzhen Airlines joint venture that temporarily suspended operations of its fleet of six Boeing 747-400Fs earlier in the month, signed a letter of intent with China’s UniTop Group to restructure the company.

    The sale was expected to take two months to complete, and would completely divest Lufthansa Cargo of its 25% stake in the company.


    March - Lufthansa would most likely not buy the remaining 55% of Brussels Airlines this year, chairman and CEO Christoph Franz revealed.

    Franz said, “Our strategic commitment is clear, but we are not in a hurry to exercise our call option. We still have another two years to do so. At this point of time the priority is on our bottom line.”

    In September 2008, Lufthansa bought 45% of Brussels Airlines parent company, SN Airholding for €65m via a capital increase. As part of the agreement, Lufthansa has an option of acquiring the remaining 55% from 2011. The option could be exercised during three weeks in April. 

    Franz also confirmed that “if necessary we will offload more loss-making airlines in our portfolio. We started to offload loss-making carriers last year, with the sale of bmi to IAG, we closed Lufthansa Italia and withdrew from Jade Cargo.”


    March - Lufthansa Cargo offered a new worldwide express service for urgent shipments. The new "Courier. Solutions" service provided the fastest transit and shortest delivery times in the Lufthansa Cargo. The company announced that the service had has no weight limits.

    Lufthansa Cargo was offering this new product in cooperation with time:matters, a Lufthansa Cargo Group company that specialised in express logistics services. Customers could drop off their shipment at Frankfurt Airport up to 90 minutes before departure. At various other airports, the minimum drop-off time was one hour before departure. At Frankfurt, the transit time was 60 minutes, while the transfer time at Munich was 50 minutes.

    The Vice President Product Management at Lufthansa Cargo said "with the shortest handling times, personal courier accompaniment during transit and round-the-clock, proactive shipment surveillance we can offer the speediest assistance when trade fair items or medicines, for example, are urgently needed on the other side of the world."


    March - Lufthansa Cargo announced it was adding a route to Chongqing, China when its summer flight schedule began on March 25. The company was offering flights to 303 destinations in 99 countries.

    Chongqing would be served with four flights weekly, operated by Lufthansa Cargo's MD-11 freighters. Other newcomers in the timetable - also thanks to the expansion of the network of Lufthansa passenger services - were Shenyang in northeastern China and Qingdao (Tsingtao) in Shandong province.

    Flights to Detroit, US were to be increased to twice-weekly connections. Services to Detroit commenced initially in January with a once-weekly flight in the Lufthansa Cargo freighter network.

    In South America, the company was adding twice-weekly MD-11 flights from Frankfurt to Montevideo, Uruguay.

    Back in the timetable was Kolkata, India. Flights were operated to the Indian city last summer, but were discontinued in recent months. Once-weekly direct flights from Frankfurt were now available again in the summer flight schedules.

    "We have selectively extended our route network and brought new and attractive growth markets into the timetable," noted a Lufthansa Board Member for Product and Sales. "We are expanding our presence in China, the world's biggest airfreight market, and now laying on freighter connections to a total of six Chinese destinations."


    January - Lufthansa Cargo was considering replacing its fleet of 18 Boeing MD-11Fs and would decide by 2014 which aircraft to go with, according to chairman and CEO Karl-Ulrich Garnadt.

    “We know we have to order more [Boeing] 777Fs and there is no other option,” Garnadt said. Lufthansa Cargo finalised an order for five 777 freighters valued at $1.35bn last spring.


    January - Lufthansa Cargo revealed some of its expectations for the year ahead. CEO Karl-Ulrich Garnadt said that he expected no growth in 2012. "Currently we are 10% down compared to last year. The demand is much weaker,” he said.

    The company's outlook was much more positive until last October, when it was announced that night flights would be banned at Frankfurt Airport. The ban removed 17 night-flights at the airport, 10 of which were Lufthansa Cargo's, costing the company €20m in profit in 2011. If the ban was contiually upheld in 2011, Lufthansa Cargo anticipated it would lose €40m in profit and a three digit figure in revenue.

    Garnadt also remarked that the ban would alter the company's fleet development plans. He said Lufthansa Cargo had planned to lease two more freighters for the coming summer schedule but had “axed” those plans. “If this scenario continues to go in the wrong direction, then we will start to replace some MD-11Fs with the first 777s instead of expanding our fleet."

    Garnadt said that if the court reverses the ban, the carrier will “switch some important night flights back to Frankfurt from July.” He said that 50% of Lufthansa Cargo's business was high-value express cargo.


    January - Lufthansa Cargo announced it had started operating its first-ever flights between Frankfurt and Detroit, Michigan (US). The route connected Germany with the centre of the US automotive industry every Monday (after the beginning of the summer schedule: each Sunday) by an MD-11 freighter in the cargo carrier's fleet. The subsequent return flight would stop off in New York on the way back to Frankfurt.

    "The new freighter connection supplements the daily flights operated by Lufthansa passenger aircraft, and offers our customers more capacity and greater flexibility," said the Lufthansa Cargo Vice President The Americas. "The automotive and pharmaceuticals industries, especially, are fuelling the growing demand for fast and reliable transports to and from Detroit."

    Starting in March, Lufthansa Cargo planned to expand its Detroit operations to twice per week. This new connection was the seventh destination served by the cargo airline's freighter network in the US. Along with the services operated by the Lufthansa passenger business, direct flights were now available to 17 airports in the US.


    January - Lufthansa Cargo boosted tonnage to record levels in 2011. The cargo airline carried approximately 1.9m tonnes of freight and mail in 2011, an increase of 5% compared to 2010.

    The airline raised capacity over the twelve months by 8.6%. The company attributed the increase was to the integration, since the second half of 2010, of the capacities of aircraft in the fleet of Austrian Airlines and the expansion to eight Boeing 777 freighters in the fleet of the AeroLogic joint venture. In an increasingly difficult market environment, Lufthansa Cargo lifted sales of revenue freight-tonne km by 6.5%, so that capacity utilisation reached 69.5%; a slight decline from 70.9% in 2010.

    "Especially in our German home market, we made full use of strong export demand to gain market shares. On the other hand, the economic climate in the important Asian airfreight market became increasingly bleak over the course of the year and led to over-capacities and increased competition for all airlines in the airfreight industry," observed the Lufthansa Cargo CEO and Chairman.

    "Lufthansa Cargo is excellently positioned in all growth markets. We will stay on our successful course and adjust our capacities flexibly in line with demand," commented Garnadt. Of crucial importance for the company's future, however, is the impending ruling by the highest Federal Administrative Court in Leipzig on the number of permissible night flights in Frankfurt. "Germany profits from a strong and successful airfreight industry, which must not be decoupled for several hours, daily, from global trade flows. A night-flight ban would deal a severe blow to the entire industry and threaten thousands of jobs in Germany, not only in the logistics industry" he concluded.
    Air Freight: 2011 News

    2011

    December - Lufthansa Cargo begun operations at its new facility for temperature-sensitive freight in Frankfurt, Germany. The Lufthansa Cargo Cool Centre was built in the space of just six months.

    The facility was equipped with four cool storage rooms for four different temperature ranges as well as a deep-freezer cell on an area of 4,500 sq m. From now on, all temperature-controlled shipments carried by the airline in Frankfurt would pass through the new facility.

    The Board Member Product and Sales, said: "Our Cool/td product is assuming ever-increasing importance for Lufthansa Cargo thanks to growth rates of 15%. The Lufthansa Cargo Cool Center will enable us to ship temperature-controlled freight faster, more reliably and more efficiently at our Frankfurt hub, and further expand our position as a leading provider of cool transports."

    Lufthansa Cargo earmarked substantial capital expenditure last year in the Cool/td product. Besides investing in the development of the Opticooler, the industry's most efficient cooling container, the cargo carrier commenced operations at its first international pharmaceutical hub at Hyderabad in India.


    October - Lufthansa Cargo resumed MD-11 freighter to Singapore.

    On Tuesdays, the MD-11 freighters would stop off in Mumbai before flying on to Singapore. On the return flight to Frankfurt, they would call at Dhaka in Bangladesh and again in India - this time in Delhi. On Fridays, the flight from Frankfurt stops off in Cairo, Egypt, and in Sharjah, the United Arab Emirates. On Sunday, the way leads back over Dhaka and Delhi to Frankfurt.


    October - Lufthansa Cargo underlined its fears regarding the consequences ensuing for the international logistics industry from the provisional night-flight ban placed upon Frankfurt Airport from October 30, 2011 by a regional court.

    Following the ruling from the administrative court in Hesse, issued a few days before the introduction of Lufthansa's winter flight schedules, the company had put together an emergency timetable for the period after October 30. A number of flights had had to be relocated to daytime slots or to the early and late hours of the day.

    Individual connections – to China, for example – had been cancelled entirely. Other flights bound for China would have to stop over at Cologne/Bonn Airport for several hours after an evening departure from Frankfurt so as to fly on, as originally planned, at night-time in the direction of the Far East. "We will be operating in future with unnecessary take-offs and landings, which will lead to more noise, higher fuel consumption and more costs running into millions," commented Lufthansa Cargo Chairman.

    Furthermore from January, at least one MD-11 freighter was to be transferred from Frankfurt to Cologne/Bonn Airport. The freighter would operate the overnight flights for the German logistics industry to North America, which could no longer be guaranteed from Frankfurt because of the night-flight ban.

    Lufthansa Cargo believed the provisional night-flight ban in Frankfurt was a drastic signal for the German logistics industry. He emphasised: "As export world champion, Germany is reliant on dependable connections to ship air freight to destinations around the globe. Frankfurt Airport plays in that respect a highly important role, since around 40% of German exports is transported by air."

    The company said that it was hoping that the Federal Administrative Court in Leipzig (the supreme court of appeal) would allow a minimum of necessary night flights in its final ruling.


    October - The fourth runway at Frankfurt airport was opened, yet what Frankfurt’s owners and customers had hoped to be a useful improvement to capacity had ballooned into a major crisis for the airport’s cargo operations. At 2.8 km the new runway would be shorter than the existing facilities and was designed to serve smaller short-haul traffic. Part of the 'Expansion 2020 program', it was the first major part of a development that would also see a new terminal and new cargo handling facilities by 2016. The taxi-ways to the new runways would also include a bridge over the neighbouring motorway and another over a high-speed railway.

    In order to get this programme past protesting local residents and environmental pressure groups, Fraport, the airport's owner, agreed to certain conditions including greater restrictions on night-flights. The residents and pressure groups who continued to dispute the airport expansion had now won a court order banning all night-flights from Frankfurt citing this agreement. The court judgement enacting a ban, which was issued on the 11th October was temporary until the case could be concluded in a higher court in 2012. In the meantime all flights between 23.00 and 05.00hrs would be prohibited from the 30thOctober.

    The immediacy of this decision had dealt a blow to Lufthansa Cargo in particular. It had been forced to adopt emergency winter schedules including scrapping two flights a week to China and even flying freighters to neighbouring, less regulated German airports during the day in order for them to take off for their final destinations during the night. Such had been the disruption that Lufthansa's CEO had even suggested that the new runway should not be opened, circumventing the ban on night flights.

    It was unclear what effect this ban would have on air cargo traffic in Europe. Frankfurt was Europe's largest air cargo hub, although belly freight operations would be affected less as there was no restriction on day-time flights. Presumably it would be the freighters and particularly those operating to China and Central Asia that would be affected most. This was all the more painful for Lufthansa as this was a route which they had made particular efforts on. There would be those who benefit from what was likely to be a major – if presumably temporary – restructuring of air freight logistics in Europe. Neighbouring airports in France, the Netherlands but also possibly the new Leipzig-Halle facility which was home to the AeroLogic Lufthansa - DHL joint venture, could see more business. Of even greater threat was the ability of Dubai and the smaller Gulf airports to jump in and grab some trans-shipment business from Frankfurt.


    October - Lufthansa Cargo resumed MD-11 freighter to Singapore.

    On Tuesdays, the MD-11 freighters would stop off in Mumbai before flying on to Singapore. On the return flight to Frankfurt, they would call at Dhaka in Bangladesh and again in India - this time in Delhi. On Fridays, the flight from Frankfurt stops off in Cairo, Egypt, and in Sharjah, the United Arab Emirates. On Sunday, the way leads back over Dhaka and Delhi to Frankfurt.


    September - Lufthansa's fleet modernisation was continued in with the ordering of
    a further twelve aircraft (two Airbus A380s, one A330-300, four A320s, five Embraer 195s).


    July - Lufthansa Cargo announced a tonnage increase of 14.8% in the first six months of 2011.

    Capacity was up appreciably year on year. Overall, Lufthansa Cargo raised capacity by 19.7%. The increase was, among others, attributable to reactivation of freighters grounded temporarily in the crisis, expansion of the AeroLogic fleet to a total of eight aircraft and the carrier's marketing since July 1, 2010 of the freight capacities at Austrian Airlines.

    Almost all the substantially increased capacity was sold in the market so that the load factor ended the first half at 69.1%. Growth was particularly pronounced in the Americas, where tonnage climbed by 19.5%.

    "Lufthansa Cargo has harnessed the robust development of the global economy and sustained the growth momentum from the previous year," said the Lufthansa Cargo Chairman and CEO. "We have made our network even more attractive with the addition of new desti-nations and invested to good purpose in the ongoing development of our products. We posted gains especially in the special services we offer customers to meet their specific needs."


    June - Lufthansa Cargo began operating twice weekly MD-11 freighter flights (Thursday and Saturday) to Houston, USA from its hub in Frankfurt, Germany.


    June - Lufthansa Cargo began operating twice weekly MD-11 freighter flights (Thursday and Saturday) to Houston, USA from its hub in Frankfurt, Germany.


    April - Lufthansa Cargo was expanding its route network in Asia and offering its customers a new service to Bangladesh; connecting Frankfurt with once-weekly flights to Dhaka. The flights to the capital of Bangladesh, on Wednesdays, would be operated by a Lufthansa Cargo MD-11 freighter.

    "Bangladesh has assumed growing importance as a production base for the international fashion industry. Our direct flights to and from Dhaka will shorten the transport time for customers and link them into Lufthansa Cargo's global network," noted the Regional Director South Asia and Middle East of Lufthansa Cargo.

    The flight would leave Frankfurt on Wednesdays at 0140 hours, arriving in Dhaka at 1910 hours after a stopover in Mumbai. The return flight from Dhaka would leave on Wednesdays at 2215 hours and was scheduled to land in Frankfurt at 0600 hours on Thursdays after a brief stop in Delhi.


    March - Lufthansa's Supervisory Board approved an order for 35 aircraft.

    The order included 30 aircraft from the Airbus A320neo family and five Boeing 777 freighters. The passenger planes were planned to be delivered in 2016 and the freighters from as early as 2013.
    Air Freight: 2010 News

    2010

    April - Lufthansa Cargo was the latest airline to report continuing growth in demand over the past few months. Its quarterly volume numbers, reported an increase of 19.3% compared to the same period in 2009, at 391,000 tonnes. Utilisation also climbed strongly with the cargo load factor increasing by 14.2 percentage points to 71.8%.

    The cargo trend indicated a general increase in business at the German airline, although passenger volumes grew by only 1.2% year-on-year, reflecting both the lesser nature of the fall in passenger volumes during the recession as well as the steepness of the recovery in air cargo. 

    BA World Cargo had also been reporting increasing volumes, with freight measured by cargo tonne kilometres rising by 6.4% year-on-year in March alone. British Airways suffered from a series on strikes during the period, although these did not seem to have affected adversely the quantities of cargo carried. Rather, it appeared that the lower available carrying capacity simply resulted in higher load factors. British Airways passenger business did suffer falls in volume as a result of its crews' industrial action so it was difficult to compare the behaviour of the two markets.

    Performance was not dissimilar at the third of the big European carriers, Air France-KLM. Here cargo volumes climbed by 2.1% in March as compared to the same period in 2009. In the intervening period Air France-KLM has stripped out 11.8% of its capacity and this had increased the load factor to 72.5%. Growth was fairly uniform across the airline's geographical markets.  It was a little surprising that Air France-KLM - which had not suffered from industrial action - was expanding its volumes more slowly than its two competitors which had had labour problems.   

    Although all of the airlines' cargo operations continued to be cautious in their forecasts, it was becoming fairly clear that the air freight market had recovered much of its activity and that the cargo operations of many of the larger carriers were back at economic levels of utilisation.


    February - Lufthansa Cargo was under threat from a four day strike by its own pilots and that of its parent company, Lufthansa. The German carrier, which was one of the world's largest air freight carriers, had weathered the recession better than many of its rivals, however the threatened industrial action could have been a significant blow to its business. It was also part of a wave of labour unrest hitting many of the established airlines as they attempted to restructure their cost base in the face of a severe recession in the sector.

    The pilots union, Vereinigung Cockpit, was threatening to bring all of its 4,500 members out on strike (Monday, 22 February), until Thursday of that week over a dispute concerning the use of non-German subsidiaries. These subsidiaries offered Lufthansa the option of cheaper wage costs and the union fears Lufthansa would increasingly use them instead of services operated by German staff. The pilots' union was demanding that all Lufthansa pilots were given the same pay and conditions, something which the company was not very willing to do. Instead it had offered its pilots in the German part of Lufthansa job security until 2012.

    The airline had said that the strike could cost it as much as €100m. It was also considering legal action to stop the strike going ahead. Lufthansa says that although subsidiaries such as Lufthansa Cargo would be affected, operations by its non-German companies would not, enabling a proportion of flights to operate as normal. 

    The impact of such as strike on the air freight market worldwide would be significant. Although certainly not occupying a dominant position, Lufthansa provided substantial capacity in many airfreight routes such as Europe to China. The effect of a sudden withdrawal of this capacity was likely to push-up rates aggressively. The beneficiaries of this would be other air freight carriers, although freight forwarders may be left scrambling for space.

    The direction of the market out of the Asia Pacific region had been uncertain after the big increases in volumes and rates prior to Christmas. The Lufthansa strike may have acted to continue driving up rates, if only in the short-term.

  • Cold Chain Logistics

    Cold Chain Logistics: 2011 News

    2011

    December - Lufthansa Cargo begun operations at its new facility for temperature-sensitive freight in Frankfurt, Germany. The Lufthansa Cargo Cool Centre was built in the space of just six months.

    The facility was equipped with four cool storage rooms for four different temperature ranges as well as a deep-freezer cell on an area of 4,500 sq m. From now on, all temperature-controlled shipments carried by the airline in Frankfurt would pass through the new facility.

    The Board Member Product and Sales, said: "Our Cool/td product is assuming ever-increasing importance for Lufthansa Cargo thanks to growth rates of 15%. The Lufthansa Cargo Cool Center will enable us to ship temperature-controlled freight faster, more reliably and more efficiently at our Frankfurt hub, and further expand our position as a leading provider of cool transports."

    Lufthansa Cargo earmarked substantial capital expenditure last year in the Cool/td product. Besides investing in the development of the Opticooler, the industry's most efficient cooling container, the cargo carrier commenced operations at its first international pharmaceutical hub at Hyderabad in India.


    September - DHL Global Forwarding acquired Lufthansa's 50% ownership in joint venture company LifeConEx. The end–to–end life sciences cold chain logistics provider was now a 100% DHL subsidiary.

    "After running the innovative specialised logistics service together for six years, DHL Global Forwarding and Lufthansa Cargo agreed that a change in ownership would best prepare LifeConEx to further grow its market position" stated Roger Crook, CEO of DHL Global Forwarding and Freight, and Deutsche Post DHL Board Member sponsor for the Life Sciences & Healthcare Sector.

    Established in 2005, the joint venture became the global leader in its niche market. DHL would utilise its global presence to leverage LifeConEx's capabilities and expand its cold chain services. While furthering its cooperation with Lufthansa, DHL would also maintain LifeConEx's neutrality in carriers, forwarders and packaging providers. This investment also supported Deutsche Post DHL's 2015 group and Life Sciences sector strategy.

    David Bang, CEO of LifeConEx would continue to lead the company and was committed to overseeing the ownership transition for continued development and success.


    May - Lufthansa Cargo announced that its pharmaceutical hub for temperature-sensitive airfreight had begun operations at Hyderabad Airport in India.

    "With the certification of the key stations for cold-chain transport in our network we are strengthening our commitment to transporting temperature-sensitive shipments," said the Senior Manager Global Key Accounts Temperature Control at Lufthansa Cargo. "In parallel to the certification process, we are further expanding our own fleet of cold-chain containers in Hyderabad."

    In December last year, Lufthansa Cargo and the operator of Hyderabad Airport, the GMR Group, announced plans to jointly develop the airport into the key hub in South Asia for the transport of temperature-sensitive pharmaceuticals.

    The first two cold-chain transports from Lufthansa Cargo's new pharmaceutical hub in Hyderabad carried consignments from the Dr. Reddy and Gland Pharma pharmaceutical groups. The temperature-sensitive medicines were transported to Philadelphia and Chicago and via Frankfurt aboard a Lufthansa Cargo MD-11.
    Cold Chain Logistics: 2010 News

    2010

    August - Lufthansa Cargo is offering customers more options for the transport of temperature-sensitive airfreight, adding to its portfolio, the latest generation of cooling containers - opticooler.

    "Business with temperature-sensitive freight has grown strongly in defiance even of the global economic crisis in 2009," said Lufthansa Cargo. "We aim to continue that growth trend and increase our market shares. We have for that very reason invested in new technologies."

    Transportation of temperature-sensitive cargo is a demanding operation for cargo airlines. With outside temperatures at airports they serve ranging from minus 30 to plus 40 degrees Celsius, they need to be equipped with containers in which temperatures fluctuate only marginally so as to avert any damage to sensitive freight. The new opticooler offers greater reliability than other models.

    Lufthansa Cargo completed the test phase with the innovative container in August. Opticoolers are used on all routes in the cargo carrier's global network.

  • Express and Parcels

    Express and Parcels: 2016 News

    2016

    August – Lufthansa Cargo has taken over complete ownership of the time:matters Group, which specialises in global same day delivery and time-critical international spare part logistics. The cargo airline, which spun off time:matters as a subsidiary in 2002, had already held a 49% share. The majority 51% shareholding had been held by financial investor Aheim Capital and time:matters management. Lufthansa Cargo and time:matters had already been cooperating successfully on express products. The takeover is in line with the Lufthansa Group's "7 to 1: new concepts for growth" strategy.

    "time:matters has established itself in recent years as the leading specialist for same day delivery and emergency logistics in Europe", said the CEO and Chairman of the Executive Board of Lufthansa Cargo. "With time:matters, we are aiming to grow our business in the special segment as well. Our focus is all about maximum reliability, exceptional service and customised solutions", he added. time:matters is to be maintained as an independent company.

    The CEO of time:matters commented, "With its technology and service platform, hardly any other logistics company can match time:matters in terms of service and flexibility. Since 2006, we have more than tripled our revenue to over €65m." Miller also believes there is potential for further growth in the segment.

    A spokesperson from Aheim Capital said, "After around ten years of intensive cooperation with the time:matters management team, we are pleased to be in a position to hand over to Lufthansa Cargo, a company which, with its employees, is among the most innovative and creative in its industry and therefore represents an excellent platform for future air freight logistics concepts for the Lufthansa Group."

  • Intermodal Transport

    Intermodal Transport: 2014 News

    2014

    March - Jan de Rijk Logistics announced that it had signed a prolongation agreement for road feeder services with Lufthansa Cargo. Under the contract Jan de Rijk Logistics would continue to provide European trucking services to Lufthansa Cargo as selected supplier at their main European hub at Frankfurt Airport, Germany.

    Lufthansa Cargo's focus was on airport to airport cargo services. The network currently contained more than 300 destinations in approximately 100 countries served by freighters, the combined cargo capacity offered by the Lufthansa and Austrian Airlines passenger aircraft or road feeder services. The majority of cargo was transferred via the airport of Frankfurt am Main. Jan de Rijk Logistics would make use of its fleet of 600 vehicles across Europe to serve the contract.


  • Rail Transport

    Rail Transport: 2013 News

    2013

    September - time:matters launched a new rail service out of Germany to Amsterdam, in partnership with Deutsche Bahn. The company, which was 49% owned by Lufthansa Cargo, stated that the extension of its ic:courier rail service would allow for same day delivery into the Netherlands.

    The rail route, which ran from Frankfurt to Amsterdam Centraal station four times a day, joined the ic:courier service's international destinations along with Basel, Paris and Vienna, as well as the 140 German train stations served.

    The time:matters chief executive, said, "The cooperation with Deutsche Bahn offers our customers greater flexibility as well as a higher frequency of transport options to Amsterdam."

    The company handled about 666,000 items a year, and operates its own courier terminal at Frankfurt Airport.


  • Service Parts Logistics

    Service Parts Logistics: 2015 News

    2015

    December - Lufthansa Technik Logistik Services (LTLS), a wholly owned subsidiary of Lufthansa Technik, has announced the expansion of existing warehouse capabilities to support the Airbus A350. The newly expanded warehouse at Munich is intended to offer a spare parts supply for the aircraft.

    The existing LTLS warehouse is expected to be expanded by 3,200 sq m of floor space and optimized for the A350 support amongst other things.

    An automated block storage system, AutoStore, is expected to be established at the first floor of the new warehouse. The expansion's first stage is due to allow storage of 15,000 bins with room for a further expansion of 7,000 bins. The expanded facility is also expected to offer room for a further narrow-aisle rack, a pallet rack for wheels, a platform system with shelving racks for small parts and battery preservation as well as a cantilever racking system for oversized and long goods components.
    Service Parts Logistics: 2016 News

    2016

    August – Lufthansa Cargo has taken over complete ownership of the time:matters Group, which specialises in global same day delivery and time-critical international spare part logistics. The cargo airline, which spun off time:matters as a subsidiary in 2002, had already held a 49% share. The majority 51% shareholding had been held by financial investor Aheim Capital and time:matters management. Lufthansa Cargo and time:matters had already been cooperating successfully on express products. The takeover is in line with the Lufthansa Group's "7 to 1: new concepts for growth" strategy.

    "time:matters has established itself in recent years as the leading specialist for same day delivery and emergency logistics in Europe", said the CEO and Chairman of the Executive Board of Lufthansa Cargo. "With time:matters, we are aiming to grow our business in the special segment as well. Our focus is all about maximum reliability, exceptional service and customised solutions", he added. time:matters is to be maintained as an independent company.

    The CEO of time:matters commented, "With its technology and service platform, hardly any other logistics company can match time:matters in terms of service and flexibility. Since 2006, we have more than tripled our revenue to over €65m." Miller also believes there is potential for further growth in the segment.

    A spokesperson from Aheim Capital said, "After around ten years of intensive cooperation with the time:matters management team, we are pleased to be in a position to hand over to Lufthansa Cargo, a company which, with its employees, is among the most innovative and creative in its industry and therefore represents an excellent platform for future air freight logistics concepts for the Lufthansa Group."

Other related logistic markets

News

  • 26/09/2017 RocketSpace selects third cohort of startups to its Logistics Tech Accelerator programme
    26/09/2017

    RocketSpace and Kaleido Logistics have selected the third cohort of startups for the Logistics Tech Accelerator, a programme designed to help later-stage start-ups scale up their business. Last week, six startups joined RocketSpace, Kaleido, Fiege, Ingram Micro, and Lufthansa Cargo for the program´s kickoff in Vigo, Spain.

    The selected start-ups represent three main emerging tech themes - Smart Warehouse, Smart Transport and Smart Commerce & Trade. Executives from Shyp, Peloton Technologies and British Airways, among other respected brands, will serve as program mentors.

    The cohort of selected companies is comprised of returns platform ZigZag Global, warehousing aggregator FullFill, predictive capacity analytics firm Transmetrics, time critical shipment company Airspace Technologies, e-commerce aggregator Eunimart and collaborative logistics platform Traqui.

    During the kick-off meeting corporate partners shared their presentations and the main innovation areas on which they would like to focus and held discussions with selected start-ups about possible joint projects. For example, Transmetrics identified 3 main projects: one with Lufthansa Cargo on demand forecasting for dynamic pricing; and one each with Ingram Micro and Fiege on demand forecasting for warehouse staff planning.

    “The warehouse planning project is a great opportunity for Transmetrics to finalize our new product called WareMetrics, which aims to optimize staff shifts within warehouses by forecasting upcoming shipment flows 2-6 weeks ahead,” says Transmetrics’ co-founder Anna Shaposhnikova.

    The pilot projects kick-off and product validation stage was launched on September 22nd and will continue until November 30th. The acceleration program will conclude with a Demo Day in London at the beginning of December, where participants will unveil their go-to-market solutions.

    Source: Rocketspace, Transmetrics

  • 03/08/2017 Lufthansa reports financial results for second quarter
    03/08/2017

    Lufthansa produced revenues of €9,260m in Q2 2017, reflecting a year-on-year increase of 13.96%. Moreover, the company produced EBIT of €1,015m during the quarter, demonstrating a 79% improvement.

    The earnings performance is attributable primarily to strong demand and lower unit costs at the Group´s passenger airlines. Unit costs excluding fuel and currency effect declined by 3.4% in the second quarter, whilst unit revenues at constant currency were raised by 1.8%. Load factors were up on their prior-year levels in all traffic regions, despite increased capacity.

    “We have achieved the best first half-year result in our company´s history,” says Ulrik Svensson, Chief Financial Officer of Deutsche Lufthansa AG. “In addition to strong demand and a robust pricing environment, this is attributable to the fact that we achieved a further structural reduction in costs. Our hard work in cutting our costs is reaping its rewards. But we must continue these endeavours: this is the most important way that our margins can be improved sustainably.”

    “In view of our successful first half-year development and the better visibility into the important third-quarter period, we have raised our forecast for 2017,” says Ulrik Svensson.

    Source: Lufthansa

  • 09/05/2017 Lufthansa Cargo launches new tracking service
    09/05/2017

    Lufthansa Cargo has launched its new optional tracking service, liveSensor. The tracker will allow cargo airline customers to keep an eye on shipments over the course of an entire route, in real time. liveSensor will also give information on whether or not transport conditions agreed upon are being complied with, by measuring factors such as temperature, humidity, pressure, alignment and vibration. Light sensors will also be used to determine whether a shipment has been opened, which will serve as a protection against theft.

    Lufthansa´s new portal, which is linked to the tracking device, will allow customers to apply user-defined settings, such as the modality of status messages or adjustments to temperature ranges. Virtual geographic boundaries, or geofences, can also be defined. This means that specific information is available in the event of damage or loss to a shipment.

    liveSensor is currently available for booking in 13 European countries as well as in the USA and will gradually be rolled out worldwide.

    Source: Lufthansa Cargo

  • 20/04/2017 United Airlines and Lufthansa Cargo enter Joint Venture agreement
    20/04/2017

    United Airlines (UAL) and Lufthansa Cargo have signed a joint venture agreement for cargo cooperation on routes between the U.S. and Europe. The pair will cooperate on capacity availability and align booking and handling processes.

    The joint venture will provide 600 direct connections per week between the U.S. and Europe. Customers will be able to access the combined network through either UAL or Lufthansa´s booking channels.

    The contract signing initiates the implementation phase of the joint venture project, during which the carriers will align their cargo IT systems and business processes with the goal to implement the new networks first working day later this year.

    Source: Lufthansa Cargo

Briefs

  • 07/09/2017 Carriers push up air freight rates as demand remains strong
    07/09/2017

    Airlines are hiking air freight rates “significantly” as demand remains strong, and it could grow further.

    Yesterday, Lufthansa Cargo announced that its net cargo rates in western Europe would rise between 5% and 10% from October 1, and even higher in other regions.

    In a note to customers, it said: “The demand in the airfreight industry has increased noticeably. We expect this trend to continue and anticipate a renewed increase in demand in the fall.”

    Pointing to its anticipated rate rise in Europe, it added that, “depending on the route, [it could be] significantly more than that. The rate adjustment will occur gradually and on a region by region basis”.

    One senior air freight industry executive commented: “In general, the market is indeed strong enough for that. But I have grown wary of these general announcements, as many have fallen through.”

    He added: “A better way is to act and negotiate with customers. If it takes place then it’s great, but these announcements typically don’t mean a lot, by historical track record.”

    However, indications show that there is likely to be a strong end to the year for carriers, while for forwarders, it will depend on whether they can pass on rising costs to customers.

    “Rates are going north, and it isn’t even busy for the peak period yet,” said one air freight forwarder.

    “The air freight market is very busy and congested in some areas. Also China is about to get very busy with the launch of the new iPhones, and lots of other tech products seeping into the market. And that’s without ecommerce, which will get very busy on air freight.”

    Executives indicate that transpacific eastbound is gearing up for a very busy December, owing to an anticipated e-commerce rush. One charter executive told The Loadstar that while some charters had been cancelled for the first half of this month as scheduled airlines introduced more capacity and air freight rates fell slightly, the market was beginning to move again.

    “Generally speaking, carriers are getting very excited.  Week three will be interesting, and we’ll find out if there really is a squeeze. The first people to hold back are charterers, so they did exercise some cancellations when there was more scheduled capacity.

    “But for December, it is very hard to get access. One carrier told us to take whatever we can get as there is no spare capacity. December will be strong, which is unusual for the transpacific.

    “We locked in capacity for it in April, and locked in the main peak in June and July. This year, the market should go right into December.”

    Along with higher rates, fuel prices have also risen. Emirates announced yesterday it is changing its fuel surcharge from September 11. The jet fuel price has risen significantly in the last week, increasing 18.3 points between August 25 and September 1.

    Emirates was one for the first carriers to axe a fuel surcharge and move towards all-in rates, but reversed the policy in April, after just two years, claiming its new methodology would “better reflect the reality and impact of fuel costs”.

    Forwarders and shippers expressed some scepticism at the time, believing the policy reversal was owing to poor market conditions.

    One air freight executive told The Loadstar yesterday: “I don’t believe in surcharges. If a carrier wants to increase rates and risk load factor, then be a man about it and do it. But I think it is better to just purely follow supply and demand, instead of via these ambiguous surcharge schemes.”

    Source: The Loadstar, September 6, 2017

    Author: Alex Lennane

    Carriers push up air freight rates as demand remains strong

     

  • 02/05/2017 Why have airlines on the Europe–Asia trade lane enjoyed such a strong start to the year?
    02/05/2017

    The logistics industry expects some growth at the beginning of each year on the Europe to Asia trade lane as Chinese New Year tends to offer a seasonal boost. However, a look at the key data in H1 2017 shows that this year has been particularly impressive, and air freight providers are seeing the benefits.

    Various carriers have produced impressive Q1 results in 2017. Kuehne + Nagel’s air cargo division reported 15.5% volume growth on the Asia-Europe lane, whilst Lufthansa reported revenues in its logistics division (mostly air cargo), growing 18.5% year-over-year. IATA saw this trend repeated across the industry, reporting year-over-year freight tonne kilometre (FTK) growth in Asia Pacific and European carriers of 11.8% and 10.5% respectively.

    Airports are also reporting impressively high volumes too. Data presented in the Ti-ASR Logistics Tracker, showed an 18.7% year-over-year growth in air freight in China in February 2017. The growth rates in Tokyo, Taiwan, South Korea and Hong Kong were also encouraging. Whilst Chinese New Year certainly affects these rates, the growth across the past few months suggests an upward trend.

    Zahra Ward-Murphy, co-author and Equity Strategist at ASR, commented: “The improvement in global activity picked up by our logistics dataset from the middle of last year is not yet showing any obvious signs of abating.”

    Why is it that air freight performances are improving? One reason is that the phasing-in of the new major shipping alliances, Ocean, THE and 2M, appears to have been more difficult than expected. The new schedules have caused global delays. In Shanghai for example, the world’s largest container port, Reuters reported last week that the difficulties had caused over 100 vessels to be stuck outside the port. These issues have been forcing shippers to look to the skies for help.

    Better than expected world trade performance is also fuelling demand for carriers. The WTO recently forecasts its growth expectations as 2.4% in 2017, up from 1.3% in 2016. This increase in demand is pushing up freight volumes.

    The state of play in the skies is changing too. High tech goods are primarily transported by air, in part due to their weight and value. In recent years, though, more and more food products are being flown across borders. According to a recent article in the Economist, the number of food products being flown has risen by a third since 2007. This fits with a growing Chinese middle class, now looking further afield for their produce.

    Also aiding this positive period for air freight is cross-border e-commerce. Whilst growth in this sector is hardly new, it is worth noting that e-commerce logistics in China was estimated to have grown by 27.1% in 2016. The Chinese middle class is driving growth at this period in time and airlines are having to adapt to increased consumer demand for express deliveries.

    In October 2016, IATA had warned, “any boost in the near term is likely to prove transitory; the bigger picture is that the ongoing sluggishness of global trade conditions continues to present a stiff headwind for air freight.”

    Perhaps IATA was overly pessimistic (not that these forecasts are easy). Yes, the sea freight market will settle down in time as new alliances find their footing. But IATA had cited sluggish global trade as a reason for its downbeat forecast. New trade figures are positive though and this could lead to a better than expected year for air freight providers.

    Source: Transport Intelligence, May 2, 2017

    Author: Andy Ralls

    Download a FREE copy of the Trade and Logistics Tracker – a monthly review of Trade Trends and Logistics Data, written by Ti’s Economist David Buckby and ASR Strategist Zahra Ward-Murphy

     

     

  • 27/04/2017 Cargolux has higher volumes but lower profits
    27/04/2017

    Cargolux, a company that has until recently suffered from what it described as “worryingly low yields, fierce competition and overcapacity”, saw continued increases in volume over the 2016 financial year. Freight tonne-kilometres were higher by 10%, whilst utilisation, as measured by load factor, rose to 66.76% from 65.9% the previous year. Over the year Cargolux carried 964,131 tonnes of freight as compared to 889,652 tonnes in 2015.

    The company’s President & CEO, Richard Forson, commented that it was the last quarter of 2016 that distinguished the results, being “one of the strongest in many years”.

    Despite this, net profit crashed to US$5.5m in 2016, down from US$49m in 2015. Why this should be is unclear. Cargolux is a private company owned by a mix of Luxembourg and Chinese investors and there is not much transparency around its finances, however two factors could be depressing profits. Firstly, fuel costs were key to a rapid increase in net profitability in 2015 and higher oil prices may have dragged down the number in 2016. However, it seems unlikely that this would account for the entire drop of almost 90%. Rather Cargolux may have been aggressive in its pricing, something supported in the increase in market share from 3.8 to 3.9%. The Luxembourg-based cargo network is now the sixth largest cargo carrier in the world, something possibly helped by Lufthansa’s continued aggressive rationalisation. 

    Despite relatively soft market conditions, Cargolux continues to expand its fleet, taking delivery of a 14th 747-8F in a fleet totalling 22 aircraft.

    China remains a key driver of business growth, with the company’s hub at Zhengzhou now larger than its Shanghai operations, although to what extent this is due to the influence of its Henan investors is not clear. This hub interfaces with both North America, via Chicago, as well as Europe, via Luxembourg.

    The fact that a company such as Cargolux can continue to survive in a market where so many of the larger passenger airlines’ cargo operations are loss making or shrinking is interesting. Although Cargolux may have a lower cost base it lacks the ability to flex the price of its cargo operations as it is unsupported by its passenger business. Cargolux may be just positioning itself in the market better than its airline rivals.

    Source: Transport Intelligence, April 27, 2017

    Author: Thomas Cullen

  • 21/03/2017 Fraport and Lufthansa make slow progress in tough market
    21/03/2017

    The German air freight sector remains in the slow lane. Its two largest actors, Fraport and Lufthansa, have just reported their annual numbers and whilst both are profitable the underlying picture was muted, implying mixed prospects for their cargo operations.

    At a superficial level, Fraport had a tremendous year. Although revenue fell by 0.5% to €2.58bn, profits measured in terms of EBITDA leapt by 24% to €1bn, whilst EBIT was up by 33% to €693m. However, much of the increase was driven by compensation payments for problems at its new Manila airport development, as well as sales of assets. The Manila payment alone amounted to €198m. Stripping these sums out of the results would have resulted in roughly flat operational profit figures. Cargo growth, in terms of tonnage, was moderate at 1.8%; 2.1m tonnes. Fraport said that they expected cargo operations to show a higher rate of growth next year, possibly in excess of 3%.

    Lufthansa, which is Fraport’s largest single customer, saw better figures than the expected sharp decline for the 2016 financial year. Revenue edged down by 1.2% to €31bn and EBIT was up by 35%, to €2.27bn. The profit figure was, however, flattered by the effects of pension costs and strikes, with the underlying figure seeing a fall of 3.6%. Passenger demand was mixed with Lufthansa generally relying on improvements in its cost base, rather than higher passenger volumes to manage profits.

    However, Lufthansa Cargo fell into a loss of €50m on revenue, down 11.5% at €2bn, due to what the airline describe as “significant pricing declines in particular in the face of massive overcapacities”. Lufthansa Cargo continued to reduce the size of its fleet over the year, shedding a further two freighters.

    Both businesses are fighting against continuing mediocre growth in world trade combined with structural problems in air cargo demand. In the short-term this may be relieved by less capacity on the market, however, it is far from certain that this will be sustained.

    Source: Transport Intelligence, March 21, 2017

    Author: Thomas Cullen