Lufthansa Cargo posts one of the most successful years in its history

posted on 23rd March 2018 by Jordan Newton
Lufthansa Cargo posts one of the most successful years in its history

Lufthansa Cargo’s sales rose and total operating income increase to €2.6 billion in 2017 as the German carrier cashed in on the recovery in the air cargo market.

Sales soared by 21.1 per cent over the previous year to €2.5 billion with 8,886 million FTKT sold. Average revenues, especially in the express business, went up considerably. Total operating income increased by 21.2 per cent to €2.6bn.

Adjusted EBIT improved by €292 million to €242m over the difficult previous year. EBIT improved by €304m to €240m.

Lufthansa Cargo chief executive officer and chairman of the executive board, Peter Gerber said 2017 developed into one of the most successful years in the history of the carrier.

He added: “Lufthansa Cargo has achieved impressive earnings. In the volatile logistics business, our team demonstrated high professionalism and passionate commitment. For the current year, we will therefore remain focused on pursuing our efficiency programme and investing in our future.

“At present, these are mainly investments in ground infrastructure for highly profitable special business and in digitisation.”

Lufhansa Cargo said last year’s result was achieved in a challenging market environment. In addition to a strong focus on cost optimisation, high-performance products and flexible capacity management, the carrier’s sales strength also made a significant contribution.

The strategic efficiency programme adopted in 2016 it said it also already having an effect in its current stage of implementation – sales and other areas were streamlined at the beginning of 2017, reducing the headcount.

More efficient processes and the cost advantage sought through making sustainable savings of €80m make it possible to respond flexibly during periods of overcapacity, as in 2016. They also pave the way for a rapid response to market opportunities, such as those arising in 2017.

Gerber added with a view to the coming years: “Air freight is and will remain a growth market. For certain goods, air freight is the only choice. Above all, export-strong regions such as Germany are an excellent long-term basis for the air freight business”.

Lufthansa Cargo has reduced the size of its MD-11F fleet to 12 aircraft by selling two aircraft. A MD-11F was reactivated in November 2017 because of the sharp rise in demand in time for the industry’s usual peak season at the end of the year.

The carrier operated a total of 17 cargo aircraft including five B777F freighters at the end of 2017. In addition, there is the capacity of two 777s from the Aerologic joint venture.

In the years ahead, the company intends to digitalise its relationships with all of the players in the transport chain, from bookings to deliveries. In the long run, customers will benefit from greater transparency, higher speeds, better quality and more flexibility as well as greater efficiency.

In 2017, Lufthansa Cargo modernised its revenue management to enable greater differentiation. The response times in sales it said were further improved by a significant reduction in the number of manual processes.

At the same time, the carrier said it is working closely with start-ups as part of its strategic Cargo Evolution programme, in order to make its business more customer-friendly along the entire transport chain.

The first step in 2017 was for Lufthansa Cargo to invest in the start-up Fleet Logistics, founded in 2014 as a neutral online marketplace for brokering international seafreight and airfreight services, which takes care of all payment processing.

The freight centre in Frankfurt is also being continually modernised. Further improvements were made to the entire infrastructure of the Cool Center. A new service, Road Feeder Service Cool, was also introduced. A special thermal foil was included in the service portfolio and the range of container services was expanded again.