Lufthansa Cargo Reports a Calm 2014 Despite Many Challenges

Lufthansa Cargo continues bucking the trend.

The cargo division of Germany’s national airline reports that they transported 1.7 million tons of freight during 2014.

LH Cargo operates four Boeing 777f, with the fifth Triple Seven freighter expected to arrive shortly in Frankfurt  /  source: hs
LH Cargo operates four Boeing 777f, with the fifth Triple Seven freighter expected to arrive shortly in Frankfurt / source: hs

Despite having carried slightly less cargo than the previous year, Lufthansa was able to hold to its utilized capacity with a load factor of 69.7%. This was marginally less than 2013 which showed 69.9%.
The decline could maybe in our view also be partly attributed to the many pilot strikes which the carrier had to master throughout the year, thereby reducing planned capacity somewhat. 

Network enlargements in 2014
The above seems to be the only downside of Lufthansa Cargo’s activities during the past year.
The airline has invested by adding stations such as Lagos, Milan and Tunis into its cargo network as well as moving strongly into the oil and gas sector by opening a new route between Houston and Stavanger (Norway) using the carrier’s new Boeing 777F aircraft.
The cargo management continues with its aim of boosting yields and to achieving an acceptable load factor.

European cargo sales remain weak
Load factors (L/F) within Europe however suffered somewhat and decreased to 50.1% which was an actual L/F decrease of 3.2%.
The Americas showed better results with a 1.1% L/F increase, bringing a total of 68.0% on these sectors. Asia-Pacific load factors held their own and finished the year almost on par with those of 2013 and a total L/F there of 77.9%; whereby Africa and the Middle East declined by 1.6% to 55.1%.

Rates continued under pressure and Lufthansa Cargo CEO, Peter Gerber stated that “competition on the market was very fierce again last year.” He continues by saying, “that 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.”

Look beyond the horizon
The Lufthansa Cargo helmsman and his team remain cautiously optimistic for this year. Mr Gerber states that the carrier will continue on the road of pursuing its Lufthansa Cargo 2020 programme as well as the new IT system build-up for cargo handling and reinforcing marketing of lucrative express products.
The preparations for the new airfreight terminal in Frankfurt, LCCneo, are in full swing according to the manager, as well as the recently announced joint venture with All Nippon Airways.

It will be interesting to see the actual financial results for 2013 which the carrier will officially announce in March of this year. It can be assumed that the operating result will be higher than it was last year.

Pilot strikes harmed LH
On the other side of the fence - namely the passenger division, figures were also positively reported.
Lufthansa transported a total of 106 million passengers in 2013 - a plus of 1.3% and an increase in load factor of 0.3% to 80.1%.
This was achieved despite the many pilot strikes which ensured that the German carrier was forced to operate 1,500 (- 2.6%) less flights than planned.
A lot of missing belly space for cargo is in those 1,500 less flights.
And – that’s what also partly counts in this business!

John Mc Donagh

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