LUG Frankfurt Takes Over Etihad Cargo Handling

Etihad Airways has often been in the news during the past months.
The carrier seems to be divesting itself of its present CEO, James Hogan, as it gears itself towards a new strategy as far as their European opera-tions are concerned.
On top of this, both Etihad and Lufthansa have announced a closer working relationship for the future in various business segments, including cargo.

Etihad Cargo will be handled by LUG in both Frankfurt and Munich, pictured here is one of EY’s Boeing 777 freighters
Etihad Cargo will be handled by LUG in both Frankfurt and Munich, pictured here is one of EY’s Boeing 777 freighters

Middle East carriers facing strong headwinds
The Abu Dhabi-based carrier has grown very fast during the past years and has invested considerable sums into airlines within Europe. These investments have not paid off and are now subject of a total revue of Etihad’s present and future operating and investment strategy, as reported by CargoForwarder Global.

Competition in the Gulf region has become somewhat cutthroat during the past two years and this development has it seems also affected the cargo revenues and yields of most carriers there.
Etihad is no exception, recently reporting that cargo results for 2016 were below expectations.

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New cargo handling strategy for FRA
LUG aircargo handling, Frankfurt’s second largest air freight handler has been chosen by Etihad Cargo as their new cargo handling partner in FRA.
LUG will take over all handling operations for Etihad Cargo from the present handler, Swissport, as of March of this year.
This move follows on Etihad’s decision to move their Munich cargo handling to LUG as of February 1st this year.
Etihad will move over to LUG’s modern handling facility in FRA’s Cargo City South, a move which is seen as being necessary to raise the carrier’s service quality and productivity in Germany.
The move to LUG is also seen as a means of lowering costs and increasing revenue turnover for the Abu Dhabi-headquartered airline.

 

German market is strong for Etihad
The German market has become very important for both cargo and passenger traffic for Etihad.
Cargo flows on outbound flights from Germany consist of a variety of goods, among them automobiles, machinery, electrical and chemical products.
Etihad with its broad network throughout the Middle and Far East utilizes its belly space and main deck cargo capacity to move imports into Germany.
The carrier operates twice daily passenger services to both Munich and Frankfurt as well as two weekly all cargo services to FRA, utilizing A330-200Fs and B777F aircraft.

Managing Director Patrik Tschirch of LUG – company courtesy
Managing Director Patrik Tschirch of LUG – company courtesy

Plenty of space to expand
LUG aircargo handling is well equipped to serve Etihad with its present operations into FRA as well as for any future expansion of these.

LUG celebrated its 50th year of service in Frankfurt in 2016 and was hard hit by the loss of Cathay Pacific Cargo late last year. The Hong Kong-based carrier which was very happy with its long standing cooperation with LUG, because of its new cargo joint-venture deal with LH Cargo, was forced to moved its cargo handling operation over into the LH warehouse.
A loss for LUG, but one which will hopefully be well compensated by the expected 50,000 tons per annum that Etihad Cargo will push through their facility.

Patrik Tschirch, Managing Director and CEO of LUG commented on the new deal that “we are delighted that we have been able to convince a demanding customer such as Etihad Cargo of our high service quality and to land this big contract.” He stated further that “key success factors for our cooperation will be a stronger customer focus as well as our innovative and consistently efficient operational processes.”

Etihad Cargo is LUG’s first Middle East airline client, but maybe not the last!

John Mc Donagh

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