Following the decision of the German aviation authority, Luftfahrt-Bundesamt (LBA), prohibiting CargoLogic Germany (CLG) from continuing to operate, CLG immediately stopped all
activities. Almost simultaneously, Lufthansa Cargo welcomed its first A321P2F at the carrier's home base FRA. A second conversion is expected to follow in July. The aircraft will be operated on
regional routes complementing the carrier's global long-haul network.
But first to CargoLogicGermany: after being grounded the 4 leased B737-400P2F are parked at Helsinki, Ostrava, Budapest, and Katowice airport. The ban is in line with similar decisions taken by the aviation authorities against CLG parent, Volga-Dnepr (V-D), and AirBridgeCargo (ABC), who are no longer permitted to conduct commercial flights to and from the EU, nor to North America (CargoForwarder Global reported).
“To be, or not to be,” Hamlet
The sanctions have since led to high levels of concern among the Group's roughly 3,500 employees, regarding the future of the aviation company and their jobs. There are fears of harsh cutbacks and layoffs. The fact that ABC has rented most of its 19 freighters from leasing companies in Bermuda or Ireland, does not make matters any easier. The aircraft must be returned to their rightful owners by the end of March at the latest. If this does not happen, which would be possible under a hastily passed law of the Kremlin, V-D, ABC, and the other members of the group would hardly be able to lease Western equipment in the future, should they survive the sanctions.
Sanctions starting to take effect
Market observers expect that the ban will largely eliminate the fundamentals of the Russian aviation group’s business model - transporting goods between the Far East, Europe, North America, and vice versa, distributing imports and exports locally on their fleets of smaller freighters. Since Great Britain stepped out of the EU, their aviation authority is no longer an EASA member, so not obliged to sanction London-based CargoLogicAir (CLA). “Their two B747-400 continue to operate,” a local cargo airline manager told CargoForwarder Global. Other sources claim that the 2 UK-registered aircraft have also been taken out of service.
The flight bans come as western reactions to Putin’s assault on Ukraine, and are aimed at hitting Moscow’s corrupt oligarch system, hence the direct pecuniary beneficiaries of his tyranny. However, it is a double-edged sword, because large cargo capacity is taken out of the market, leading to price hikes, and forcing international carriers to fly around the large Russian landmass on west-east routes. This lengthens long-haul flight times by between 1.5 and 2 hours, and drives up kerosene burn and costs, thus increasing the harm to the environment and emptying the purse, a market analyst told CargoForwarder Global.
Lufthansa Cargo welcomes first A321P2F to its fleet
It is probably unintentional timing, but against the capacity backdrop of CLG, Lufthansa Cargo presented its first A321P2F to clients and employees at Frankfurt/Main, Germany, on 15MAR22. The aircraft, the first of two, can accommodate 14 pallets in its upper deck and 8 pallets in its lower deck. It will operate intra-European and Mediterranean routes, connecting the freight company’s global network with regional routes. So far, this (missing) link was closed by belly hold cargo traveling in the lower decks of the Lufthansa passenger fleet, serving regional and local markets.
The first flight took off from Frankfurt (FRA) to Dublin (DUB) with 15 tons on board and returned via Manchester. “It’s a splendid opportunity to fly urgently needed spare parts, samples, documents, and other much sought-after products across Europe, even to Istanbul, Tel Aviv, and Cairo,” stated, Alexander Kohnen, CEO of the Speedy Gonzales subsidiary of Lufthansa Cargo, time:matters GmbH.
The initial routes will include 7 destinations. Asked by presenter Albert Staudt, who is a professional TV moderator but works occasionally as a flight attended for Lufthansa, which customers benefit most from reduced run times enableb by the A321F, Ashwin Bhat, Head of Sales at Lufthansa Cargo said: "mainly producers or users of semiconductors, the IT aud automotive industry, just to name 2 examples out of many." Being able to provide main deck capacity on regional routes, this way complementing Lufthansa Cargo's global network is a big step forward, said Mr. Bhat. This enables us "to capture a larger portion of the thriving e-commerce market."
Particularly the cross-border e-commerce segment is outgrowing all other modes. “In Europe, 40% of e-commerce shipments are traveling cross border, outgrowing local demand,”
Arthur Hausmann, cargo analyst at McKinsey, emphasized.
Seen from this perspective, “the expansion of our freighter fleet reflects current and future market needs,” Lufthansa Cargo CEO, Dorothea von Boxberg, concluded.
In summer, the carrier will get a second A321P2F. Both aircraft are operated under a wet lease agreement by Lufthansa CityLine, each under the flight number of Lufthansa Cargo. They have a range of 3,500 km.
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