Exclusive - LH Cargo Axes South America’s Flower Shuttles

“We still want to cater for the demand of this year’s Valentine Day (14 February) and the international Women's Day held on March 8th, but once this biz is done we will stop the flower shuttles from the South American West Coast to Germany,” confirmed Michael Goentgens, Head of Communication at Lufthansa Cargo, when questioned by CargoForwarder Global. However, the carrier will continue serving Latin America's Pacific Rim by operating charter flights in the context of special projects.
Goentgens told CargoForwarder Global that the reason for the decision to terminate the twice weekly operated South American flower shuttles is purely based on economic grounds and has nothing to do with the long-lasting legal dispute between his company and the Dutch aviation authority over landing rights in Amsterdam. These rights were denied LHC on the ground that the bulk of the shipments originated in Bogota and Quito.

KLM wanted to get rid of a direct rival
The dispute started in 2011 when the German carrier launched a three to four-times weekly MD-11F service between Ecuador and Colombia transporting fresh cut flowers and perishables from Ecuador and Colombia via Puerto Rico’s Aguadilla Airport to Amsterdam Schiphol.
Amsterdam Schiphol is a major global hub for the flower trade with direct transportation links to the world’s biggest flower auction market in the nearby town of Aalsmeer.

DCAA and LHC voiced controversial opinions
Following a complaint from KLM Cargo, the Dutch Civil Aviation Authority (DCAA) in 2012 banned LHC from operating the freighter service on the grounds that Lufthansa used the stopover in Puerto Rico (a commonwealth of the U.S.) for the sole reason to operate the flower service under the EU-US Open Skies agreement for which no permit is required.
Justifying the ban, the DCAA said its investigations showed that LHC loaded cargo in Ecuador and Colombia - in the form of fresh cut flowers - and made a stopover in the U.S. (Puerto Rico) en route to The Netherlands.
“Lufthansa Cargo had initially indicated that, during the stopover in the U.S., cargo was imported and then exported. They argued that on the basis of the EU-US aviation agreement, they could take the cargo to the Netherlands without a permit,” the Dutch competition watchdogs argued
“Further investigation revealed that there was no import and export of such cargo in the U.S., but only transit through the U.S. Lufthansa Cargo later confirmed that in the U.S. only the crew and flight number were changed and the aircraft refueled. For these flights, Lufthansa Cargo can’t call upon the EU-US treaty,” the DCAA stated in justifying its decision.

FRA instead of AMS
When LHC ignored the ban, it was handed down a fine of €40,000 and it then re-routed the MD-11F service to its home base at Frankfurt-Main and trucked the flower shipments to the Netherlands.
LHC subsequently appealed the DCAA decision at the Administrative Court of The Hague, claiming that the Dutch government only wanted to protect the interests of its home carriers KLM and Martinair at Schiphol.
After losing this appeal, LHC in 2013 decided to appeal to the highest Dutch Administrative Court, the Raad van State, because it found that its arguments had not been adequately taken into consideration.
That appeal was retracted recently without further explanation and the Administrative Court thus never announced a verdict in this case.

Pyrrhic victory
LHC's decision to terminate the flower transport by the middle of next month looks like a Pyrrhic victory for KLM and Martinair as holding company, Air France, last year announced drastic cuts in the full freighter fleet as well as a significantly realignment of its entire freighter network, due to a continuing decline in their air cargo businesses.
“Dropping the judicial case in The Hague doesn’t mean that we have changed our position a single inch. We still are convinced that we are right and the DCAA is wrong with their interpretation of international traffic rights,” states Michael. However, continuing the lawsuit for the only sake of eventually winning a case without gaining any economic benefits doesn’t make sense, but costs additional money, Goentgens concludes.
Although LH Cargo doesn’t disclose any figures the legal dispute has meanwhile devoured funds well above the six-digit euro range, market observers estimate. Not to forget the additional greenhouse gas emissions caused by the cool trucks running from FRA to Aalsmeer.

Nol van Fenema  /  Heiner Siegmund