Exclusive - Are Lufthansa’s Leading Managers Considering Outsourcing Freighters?

The pressure coming from state aided Gulf carriers and European low cost airlines is increasingly impacting Lufthansa, Europe’s largest airline group.  In order to become more profitable and return on a growth path again there seems to be no sacred cows any longer when it comes to paving the way for a financial u-turn. Affected by this phoenix from the ashes strategy could also be Lufthansa Cargo, speculate German media.

LH Cargo has secured delivery options for 5 Boeing 777Fs. Will they be operated by AeroLogic?
LH Cargo has secured delivery options for 5 Boeing 777Fs. Will they be operated by AeroLogic?

It was only a minor paragraph in an article published today (5 August) by financial paper Boersen-Zeitung on Lufthansa and the tough discussion with their pilots on wages and working conditions that attracted a great deal of attention. In the report, the author refers to considerations circulating within the airline’s Executive Board to transfer freighters operated by LH Cargo to a more cost effective platform analogue to the Eurowings model, a low cost carrier pushed forward by LH for cost saving reasons.

Cost advantages
A suitable candidate for such a shift of freighter aircraft writes Boersen-Zeitung could be AeroLogic, the LH Cargo and DHL Express (50/50) jointly operated cargo airline headquartered at Leipzig/Halle airport. What seems to make AeroLogic particularly attractive for this kind of consideration is the fact that their pilots are not part of the collective agreement signed between the strike willing union Vereinigung Cockpit and Lufthansa. This limits expenditures notably - insiders speak of as much as 20 percent reduced operational costs compared to LH Cargo.

Asked about any accuracy of the Boersen-Zeitung’s report LH Cargo’s Head of Corp. Communication Michael Goentgens denied any freighter outsourcing concepts. “There is nothing to it,” he exclaimed. He pointed out that AeroLogic has to be further developed but not at the expense of his company by obtaining part of LH Cargo’s freighter fleet.

It needs two to tango
Managing Director Ulf Weber of AeroLogic, we caught him on his vacation in South Africa, said that he hasn’t been approached by Lufthansa’s Executive Board on this issue. Herr Weber added to this that the speculation raised by the article aren’t really new stuff but continues to pop up now and then.
Enlarging the AeroLogic fleet of eight Boeing Triple Seven freighters was an option from the very start of his cargo airline back in 2008 and occasionally discussed since then. “On commercial grounds it would make sense expanding our fleet,” he declared. But this decision is subject to the two shareholding companies DHL Express and Lufthansa Cargo,” Ulf explained.
So it needs two to tango if AeroLogic’s fleet shall grow.

At second glance it would seem that such a move by LH Cargo would indeed be beneficial for their cargo product.
Reduced costs, maybe better fleet utilization, a faster phase out of the fuel guzzling MD-11Fs and, who knows, maybe using Leipzig as a main LH cargo hub.
The plans to put back the building of the LCCneo indefinitely could well be a reason for LH Cargo to look more closely at Leipzig.
As far as costs are concerned, definitely more attractive.

An interesting thought however.

Heiner Siegmund   /  John Mc Donagh

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