In a staff gathering held at the carrier’s Frankfurt headquarters last week, Lufthansa Cargo presented and launched a new product named ‘myAirCargo’. During the coming three months ‘myAirCargo’ will be internally tested by interested staff working for Lufthansa, its Cargo daughter, Eurowings and Austrian Airlines in order to gain experience and fine-tune the offer.
Before officially launching the product sometime next summer, “we want to study and scrutinize all related processes in order to guarantee the market the utmost quality of ‘myAirCargo’,” explains
speaker Andreas Pauker of LH Cargo.
Target group are passengers flying with LH, OS or EW
Future users of this individualized transport option are travelers flying with LH, AUA or Eurowings, that spontaneously decide to purchase a keepsake while being abroad and which is too large or heavy to fit into their suitcases. For instance, a unique piece of furniture, an art deco object or a large and valuable painting seen in a gallery somewhere that the viewer lost his heart to and is eager to bring home.
However, the purchase price is only one side of the coin; the other is the expenditure for transporting the good piece home. Exactly at this point ‘myAirCargo’ comes into the game. All a potential buyer of, say, souvenirs needs is a smartphone, visiting LH Cargo’s website and click on ‘myAirCargo’. Immediately after the dimensions and weight of the goods and the addresses for pick-up and delivery are entered, the price for a door-door transport is instantly displayed. The rest is credit card number and confirmation of the deal – that’s it. The immediate visibility of price and capacity confirmation for the air transport by either Lufthansa, Austrian or Eurowings makes ‘myAirCargo’ very attractive, reasons Herr Pauker. The client gets instant information about the entire cost framework, including selling price and transport price.
“Assisted by local forwarding partners, we as Lufthansa Cargo are controlling the entire supply chain from beginning to end, which includes customs clearance, pick-up, documentation and delivery,” states Andreas. Therefore, ‘myAirCargo’ is similar to options offered by package delivery companies like DHL Express, FedEx or UPS.
According to Andreas, it complements LH Cargo’s product portfolio, aimed specifically at passengers traveling on board Lufthansa, Austrian Airlines or Eurowings. He admits that there is little chance that it will become more than a niche product, but it rounds off the carrier’s cargo offerings.
Swiss and Brussels Airlines are excluded from this personalized transport option, at least during the initial phase. This is because they manage their cargo business by themselves or with the support of general sales agents, particularly SN Cargo. This does not exclude, however, that they’ll follow the example of LH Cargo one day should the new product manage to establish itself in the market.
According to Andreas, ‘myAirCargo’ covers a niche beginning at 50 kilograms and ending somewhere above one hundred kg. By volume and dimension, it is positioned between hand luggage and normal cargo shipments.
He does not expect a conflict with forwarding agents who might blame Lufthansa Cargo for dealing with clients directly, thus sidelining them. “We are not taking away any business from any agent; instead they get a piece of the cake because it’s them we mandate to carry out the pick-up and last mile delivery.”
Discouraging financial figures
All in all, “myAirCargo” won’t surely perform miracles to cure the somber financial situation Lufthansa Cargo is currently facing. In Q1, the carrier went into the red, presenting an EBIT loss of €19mn, compared with a profit of €52mn in the first quarter of last year.
Which strategic and operational steps LH Cargo will take to restructure the business and get back into the black the management will announce in mid-June as outcome of thorough internal discussions.