LH Cargo and UA Cargo Join Forces

Both carriers have signed a joint venture agreement for extensive cargo cooperation on routes across the North Atlantic. It follows similar pacts based on antitrust immunity signed between Lufthansa Cargo, ANA Cargo and Cathay Cargo.

The saying ‚what takes longer, turns out good’ seems to describe best the joint venture agreement announced yesterday and signed by Lufthansa Cargo and United Cargo. Based on metal neutrality, it enables both carriers to use the other partner’s transport capacity on routes linking the U.S. with Europe. In a release, the airlines refer to more than 600 eastbound flights across the North Atlantic per week operated by them which are covered by the agreement.
The LHC-UA Cargo deal resembles a pact signed between Lufthansa Cargo and Japanese freight carrier All Nippon Airways in 2014, assuring them antitrust immunity for the transport of goods between Japan and Europe, followed by a go-ahead for the carriage of goods in the opposite direction in summer of 2015. Next to come was a similar joint venture between Cathay Pacific Cargo and Lufthansa Cargo signed in May of last year.

Bilaterals are the new trend in cargo
These kind of bilateral agreements based on shared capacity, metal neutrality and a joint cash box seem to be the new trend in the cargo landscape, similarly demonstrated by the close collaboration between IAG Cargo and Qatar Airways Cargo, to name another example. The benefits for the partnering airlines and their clients: faster and more frequent connections. Increased capacity. Wider reach. Higher market penetration. More simplicity and efficiency thanks to shared standard processes. 
The upcoming trend indicates that traditional airline alliances such as SkyTeam Cargo might be drawing to an end, replaced by close bilateral agreements below the merger level like the one inked now between LHC and UA Cargo.

Waiting for Day 1
In a release both carriers stress that the combined network offering creates additional benefits through access from either partner’s booking channels along with coordinated handling processes and transfers at numerous stations.
"The Lufthansa-United cargo joint venture will generate numerous benefits for our customers because our continental and transatlantic networks, our hubs and our fleet complement each other effectively,” said Peter Gerber, Lufthansa Cargo CEO.
"We are excited about the benefits that will be generated by our teams’ cooperation and our combined capacities,” said Jan Krems, President of United Cargo. “Cargo customers will appreciate the opportunities for quicker and easier shipping between key locations in the U.S. and Europe."
Both carriers say that the contract signing initiates the implementation phase of the joint venture project, during which the carriers will align their cargo IT systems and business processes with the goal to implement Business Day 1 later this year.
Both airlines intend to specify in the months ahead when exactly this will come about.. 

Heiner Siegmund

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