Lufthansa Cargo generated record earnings in the first three quarters of 2018, totaling €153 million, up 56.1 percent in a year-on-year comparison. The announced EBIT was driven by strong demand and high yields.
Happy Herr Gerber
In view of the exceptional figures presented by his airline, it is no surprise that LH Cargo CEO Peter Gerber reacts enthusiastically, indicating that the rally which began in 2017 continues unabated throughout 2018, producing even better results up to now.
Herr Gerber stated: “We are delighted that we were able to increase our result in the first three quarters of 2018 significantly again. This enables us to make new investments that will put us in an even better position for our customers in the future.”
But all that glitters is not gold. Seen by the 3.7% y-o-y drop in European tonnage and the decline of the load factor by 2% in Africa and the Middle East, causing a cut of available capacity offered to the market.
Chances are 50/50 to achieve new record sales
The above-mentioned profits are needed to finance two factory-new Boeing 777 freighters that are scheduled for delivery in Q1 of next year, upping the all-cargo fleet operated by the Frankfurt-based carrier to 19 units, to drive digitalization further ahead, and commence construction work to upgrade their Cargo Center at FRA which has been delayed for years due to a lack of cash.
Ambitious projects that can be financed and completed should sales continue to grow or at least maintain their current level. However, in spite of the carrier’s comfortable business situation, their head Communications, Andreas Pauker remains rather cautious with regard to short-term forecasts: “Last year’s final quarter was really exceptional, making it hard to repeat the feat in 2018,” he warns.
Asked by CargoForwarder Global if LH Cargo will ultimately top the 2017 achieved outstanding results, he said that all depends on the outcome of the peak season. But the chance that sales will outperform last year’s final quarter results is very doubtful, he added.
Fast growing e-AWB penetration
Referring to the rising kerosene price spiral upping the carrier’s operational costs, he said that these expenditures are passed on to the customers through adjusted fuel surcharges, stipulated by market developments.
A topic not mentioned in the quarterly results and highly welcomed by LH Cargo is the fast-growing e-AWB penetration that has meanwhile surpassed 60 percent, said Mr Pauker. Last March, the carrier had introduced a fee of €1 for paper-based air waybills as signal to forwarders to switch from paper to e-documentation. Since 1 October, LH Cargo charges €12 per non-e-AWB shipment. Hard to estimate if the upping of this financial penalty led to the fast increase of shipment data transmitted electronically or whether it is a gradual change in software use by forwarders.
Be it as it may, Mr Pauker points out that collecting fees for paper AWB is not Lufthansa Cargo’s aim. The €12 charge for paper AWB is exclusively being used to cover additional manpower expenses caused by extra efforts.