Lufthansa Cargo 2011 operating profit drops 24.4pc to US$329 million

2012 03 23

LUFTHANSA Cargo has posted a 24 per cent decline in operating profit to EUR249 million (US$329 million) drawn on revenues of EUR2.9 billion, down 3.5 per cent.

Saying this was the company's second best performance, the best being achieved in 2010, chairman and CEO Karl Ulrich Garnadt attributed the good result to "cost discipline, a broad product range and flexible capacity steering dictated by demand" despite shrinking demand in China and India.

"Lufthansa Cargo increasingly switched capacities from Asia to North America and included new and attractive destinations in its route network. On the back of those measures, the cargo carrier significantly boosted revenues and tonnage," Mr Garnadt said.

Mr Garnadt also said the company's successful investment and a strong focus on quality were vital factors. "That is evidenced by our investment in Lufthansa Cargo's cool centre for temperature-controlled shipments at Frankfurt Airport," he said.

Lufthansa Cargo launched the "Lufthansa Cargo 2020" programme last year, which produced a blueprint for long-term strategy, including orders for new Boeing 777 freighters, the IT platform upgrade, plans for a new logistics centre in Frankfurt to replace the existing 30-year-old facility and other long-term projects.

On the future, Mr Garnadt said: "In the present year, Lufthansa Cargo is anticipating severe pressures ensuing from the ongoing night-flight ban in Frankfurt. All in all, however, the company is expecting a good operating result once more at year-end."

Regulators are causing severe headwinds, he said. "The EU's unilateral stance on [carbon] emissions trading is notably hitting European airlines and distorting competition. The lack of uniformity in global security standards in air cargo as well as the slow certification of known consignors in Germany are threatening to inhibit growth," he said.

But of all problems the company faces, the Frankfurt night flight ban is the worst. "There is a real danger of Frankfurt losing its position as the best and most attractive air freight hub in Europe. A blanket night-flight ban of six hours daily would severely disadvantage the competitive standing of companies operating at the Frankfurt base," he said.

Unlike the recent past, Lufthansa Cargo said it would now focus on core business. Last year, the cargo carrier invested in some side businesses, such as in Traxon Europe, a provider of electronic solutions for airlines, and LifeConEx, a specialist company in temperature-controlled logistics.

Source Shipping Gazette - Daily Shipping News

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