While June figures for air cargo are showing some improvement, Lufthansa Group’s report for the first half of 2016 shows that the German carrier is still deep in the woods. Revenues and profits were down, year-over-year, by 2.1 percent and 55 percent, respectively, forcing the carrier to “reduce [its] forecast for the full year a few weeks ago.” Meanwhile, Lufthansa’s cargo division posted its fifth consecutive quarterly operating loss as competition on global airfreight markets remained “intense.”
For January to June 2016, total revenue for the Lufthansa Group was US$16.88 billion. Profits fell by $589 million over the same period, down to $481.3 million, y-o-y. For its cargo division, Lufthansa reported a first-half operating loss of $51.4 million and said it expects to see a full-year operating loss for the first time in several years.
It wasn’t all doom-and-gloom in the group’s report, most notably in adjusted EBIT, which was up 11.9 percent over 2015 to $581.14 million. Lufthansa also reported that they had reduced their net debt compared with the end of 2015, and that their financial stability has increased.
Lufthansa has tried to offset market conditions by parking freighters, which explains the carrier’s relatively low uptick in available revenue tonne kilometers of 0.03 percent, y-o-y, to 7.32 billion. The measures were not sufficient, however, as revenue tonne kilometers for the first half slumped 2.5 percent, y-o-y.
The group’s cargo load factor for the period was 65.7 percent, a 1.9 percentage-point decline from last year’s 67.6 percent.
A comparative look at the final figure shows that Lufthansa’s load factor is around or above industry standards for struggling European carriers. For comparison, Air France-KLM slashed their full freighter capacity by 16 percent over the same time period, reducing overall cargo capacity by 3.2 percent, however their load factor dipped by 1 percentage point to 59.5 percent.Like This Post