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LH Cargo posts record 2011 despite ‘gloomy’ early 2012

By control on January 12, 2012

Last year was particularly prolific for Lufthansa Cargo, with the carrier transporting 1.9 million tonnes of freight and mail in 2011 — a 5 percent, year-over-year, jump — and increasing capacity by 8.6 percent. A “gloomy start” to 2012 could quickly reverse this trend, however.

Difficulties in early 2012 will require Lufthansa Cargo to reduce capacity by 20 percent to 25 percent, possibly even 30 percent, which will see the equivalent of four of its 18 MD-11 freighters grounded, officials for the carrier told Air Cargo World. There will be no desert outing for the stood-down capacity, they said. Instead, the aircraft are likely to undergo maintenance checks.

Andreas Otto, head of sales at the airline, is anxious not to augur any kind of market hysteria with the capacity outage. “It would be completely wrong to talk about a real dip in the market,” he said. “Although it will be a challenging time ahead, we are convinced it will nevertheless be a good year with strong growth of tonnage.”

Looking at 2011’s numbers, his optimism appears to be well-founded. Lufthansa Cargo saw revenue freight-tonne kilometers surge 6.5 percent, year-over-year, in 2011, with load factor reaching 69.5 percent. Although this is a 1.4 percent, year-over-year, dip, officials for the carrier attribute any losses to weak volumes abroad, particularly in the Asia-Pacific.

What’s more, Lufthansa Cargo saw capacity rise considerably in 2011, thanks to the integration of the Austrian Airlines fleet in the second half of 2010 and the expansion to eight Boeing 777Fs in its AeroLogic joint venture. Considering these increases, such a slight load factor loss is impressive, officials for the carrier explained.

“Although the Asian, and especially the Chinese, markets have been weaker than expected, we have been able to achieve good load factors,” Otto told Air Cargo World. “That put us in line for 2011 to be one of our best years.”

Growth is also projected for 2012. Despite a stormy start to the year, Lufthansa officials expect to see 3-percent annual growth for this year, driven by stronger volumes in the second half of 2012. Nevertheless, analysts claim that the continued imposition of a total night-flight ban at Frankfurt Airport could cost Lufthansa Cargo up to $50 million in lost revenues annually.

To compensate for the loss of night-flights at its Frankfurt Airport hub, however, Lufthansa Cargo implemented a daytime schedule out of Frankfurt, canceled some flights and moved others to nearby and unrestricted Cologne. A German high court is due to review the ban, but not before March.

“A total ban on night flights would not lead to a move of our freighter operations, but it would lead to a significantly weaker development of our company, calling us to question the size of any future investments,” Otto told Air Cargo World. “We still believe the court will acknowledge the importance of night flights for our industry and will allow a limited number of movements per night at Frankfurt.”

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