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Lufthansa Cargo could lose 'double-digit millions' due to ban

By control on October 21, 2011

Lufthansa Cargo’s freighter services to the U.S. and China are the worst affected by the shock decision on October 11 by the Hesse Administrative High Court in Germay to ban night flights at Frankfurt Airport. The carrier had planned for 10 night flights on its winter schedule beginning at the end of this month. A permanent ban could cost the carrier somehere in the “double-digit millions of euros,” said Karl Ulrich Garnadt, Lufthansa Cargo’s CEO, during a press conference in Berlin.

One analyst has estimated the cost would be 30 million to 50 million.

The decision will affect 30 percent of Lufthansa Cargo's daily freighter departures from Frankfurt. The knock-on effect of the ruling in the Hesse regional court means Lufthansa Cargo has been forced to restructure 80 percent of services, Garnadt said.

A so-called same-day delivery service to the U.S. over New York and Chicago is the main casualty of the ban. One night flight to Chicago will now depart from Leipzig instead of Frankfurt, but this will mean trucking urgent cargo almost 200 kilometers east from Germany’s industrial heartland, resulting in a much earlier cutoff for shippers.

This one service aside, night flights from Frankfurt to New York and Chicago must switch to daytime for November and December. Karl Ulrich Garnadt, CEO of Lufthansa Cargo, admitted this would “disrupt” the U.S. offer.

He said that Lufthansa aimed to transfer these services to Cologne-Bonn starting in January, and that the carrier would base one of its 18 MD-11 freighters there permanently. Cologne-Bonn is not a viable long-term solution since night slots at the airport are very limited, and he expected incumbent services to absorb most of the available capacity there.

“We will have to talk to customers about rescheduling to next-day delivery,” Garnadt said.

Garnadt

Garnadt

He thought it inevitable that Lufthansa would lose business, but said that major customers out of Germany, including DB Schenker and Kuehne & Nagel, had expressed “total solidarity.”

Lufthansa Cargo has also canceled a twice-weekly flight to Tianjin, China, and is re-routing five weekly Beijing and Guangzhou services via Cologne.

“In Frankfurt, we’ll completely load the aircraft with shipments bound to China. Late evening they will depart to Cologne for a technical stop of between four and five hours, before taking off for the Far East,” he said.

This will mean loading aircraft at Frankfurt in the early evening, with a cutoff five hours earlier than now. The planes will fly to Cologne and wait several hours on the tarmac before departing for China, thus ensuring that Lufthansa abides by its current Russian overflight agreement.

Garnadt said the repositioning flights via Cologne and additional truck journeys would create noise, consume millions of liters of unnecessary fuel and interfere with the supply chain.

At one time, there were up to 50 departures per night from Frankfurt. Activity has shrunk significantly in recent years, and when the airport started planning for a fourth runway — which opened earlier this week  — it accepted that a curfew was necessary to offset environmental concerns.

Under pressure from airlines, the state government announced it would permit 17 flights between 11 p.m. and 5 a.m., with Lufthansa taking 10 of the slots. Opponents of airport expansion mounted a legal challenge, and the Hesse court ruled in their favor.

“The ban came three weeks before the start of the winter season, so there was almost no time to react,” Garnadt said. “It left us a very short period to reschedule our entire program.”

The Hesse verdict could yet be overturned by the federal court in Leipzig, Germany’s highest administrative court. Its decision, expected in January or February, will be binding. A positive outcome would enable Lufthansa Cargo to reinstate its full summer schedule and keep to its original expansion plan at Frankfurt, Garnadt said.

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