Lufthansa Group’s logistics business segment that includes Lufthansa Cargo has reported a fall in earnings and revenue for the first half of 2019.
The German airline group blamed falling demand on routes between Asia and Europe, lower economic growth and market uncertainty in the face of trade conflicts and Brexit.
First-half year adjusted earnings before interest and taxes (EBIT) from January to June, declined by 88 per cent to €15 million from €127 million in 2018, while revenue fell five per cent to €1.23 billion with traffic revenue affected by pricing and volumes, especially between Asia and Europe.
Revenue tonne kilometres declined one per cent to 4.36 billion while capacity measured in available cargo tonne kilometres rose nine per cent to 7.14 billion. The cargo load factor fell 6.1 percentage points to 61.1 per cent.
Lufthansa Cargo said during the period it responded to the adverse development of the air freight market by adjusting its capacities accordingly.
The logistics segment with Lufthansa Cargo is forecasted to post a full-year margin of between three and five per cent. This is though contingent on demand stabilising in the peak season fourth-quarter period, when this business segment tends to generate a substantial part of its earnings.
Overall in the first half of 2019, the Lufthansa Group as a whole reported that EBIT fell 60 per cent to €417 million and revenue was up three per cent to €17.5 billion.