LH Cargo – Europe’s Best

It seems so according to the survey held recently among the European Air Cargo community. The German national carrier who is one of the few airlines which still lays  much value on investing in and keeping its air freight product on top, received the award as the “Best European Cargo Airline” at a ceremony held in London on the 25th of April.

LH Cargo’s Thomas Egenolf (left) receives the award from Chris Leach, ACS Chairman  /  courtesy LH Cargo
LH Cargo’s Thomas Egenolf (left) receives the award from Chris Leach, ACS Chairman / courtesy LH Cargo

This is not the first time that LH Cargo has taken this award which has been presented for more than 30 years by the British Air Cargo Media Group.
The evaluation criteria necessary to join the short list of winners included innovation, quality, efficiency, speed, reliability and so called company vision.
It looks as if those from the international logistics industry, who responded to the survey, again put LH Cargo at the top of the list.

Thomas Egenolf, Director Italy, Malta, UK & Ireland at LH Cargo received the award from Chris Leach, Chairman of Air Charter Services (ACS) is quoted as saying, “we are delighted with this award, especially against the backdrop of the strong global competition.”

LCCneo postponement overshadows the award
The award comes at the same time as Lufthansa made it public that the company has decided to postpone the building of its much publicized LCCneo cargo handling facility in Frankfurt (reported also by CargoForwarder last week).

The Lufthansa Group had originally decided to invest €2.9 billion during this year and the same amount per annum for the following two years for fleet renewal and enlargement as well as other projects which included the LCCneo facility at Frankfurt‘s Cargo City North.

Things have changed dramatically since these plans were agreed upon.
The carrier’s financial position has been put under pressure by among others, the continuing pilot strikes which has resulted in a cash drain on the passenger side.
The Germanwings tragedy and the costs related to it have also added to the financial stress.
There is it seems also a discussion going on as to whether Lufthansa will withdraw from the German Stock exchange (DAX).
All in all - this forced the LH Executive Supervisory Board to revise their additional investment figures downwards.
This means that costs will go down even further this year and investments for 2016/2017 have been pegged at €2.5 billion each year instead of the original €2.9 billion per annum.

One of the losers is the LCCneo
Internal sources state that if plans for the new cargo facility had gone ahead, then costs would have gone way over the new budgets.
Hence, LCCneo is put on ice and it remains to be seen whether maybe it will be taken off the drawing board altogether.
The present facility works well, but does not fit into LH Cargo’s 2020 Project planning.
The only alternative it seems is that the LH Cargo managers come up with necessary funding to revamp the present warehouse and adjoining facilities in order to keep them running smoothly for the coming years.
That would probably mean a double-digit amount has to be found to accomplish this.

Our information is that other projects which are included in the Lufthansa Cargo 2020 program will not be affected by the new budget restrictions. These centre mainly around the LH Cargo fleet renewal with the Boeing 777F aircraft as well as upgrading of the IT systems.

The LCCneo project has been shelved for the time being and a decision on whether it goes forward will not be forthcoming before the end of 2016.

A lot can happen in our industry by then!

John Mc Donagh

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