Light and Shadow At Lufthansa Cargo

     Talking to Lufthansa Cargo staff people these days, hardly any one is happy with Jean-Peter Jansen’s retreat as chairman of the board as of March 31.
     With his conciliatory understanding and modest manner, the Hamburg-born manager gained the respect and confidence of the vast majority of his 4,000 plus workforce during his seven years atop the cargo division.
     Severe health problems have now left him hardly any alternative but to step back from his duties and go into retirement at the age of 56 years.
     He vacates his chair at a time when the carrier is charged with severe price-fixing allegations and a massive concentration of buying power at the global forwarders’ side that puts an enormous squeeze on yields.
     Perhaps the biggest problem however, is the lack of a visionary strategy at Lufthansa Cargo.
     For there is no sign of any master plan of how to cope with the daunting threats of declining profits and growing pressure from freight airlines that operate at much lower costs, while pumping huge capacities into Lufthansa Cargo’s German and European home market.
     It is in this tricky arena that the carrier is competing without a clear and aggressive gameplan of how to score the decisive goals.
     Up to this point Jansen and his fellow board members have been less than successful in presenting the market “convincing and enduring solutions at competitive prices,” as one critic puts it, alluding to the high rates’ policy LH Cargo is pursuing.
     Looking ahead, one ray of hope is the merger with Swiss, with its very effective and highly renowned freight division Swiss WorldCargo.
     But Swiss is only a niche contender, following its own path by maintaining its name and individual product range despite having been swallowed by Lufthansa.
     It was Jansen who strongly supported the two-brand strategy, since most of Swiss’ main cargo customers expect a white cross on red ground at the tail of “their” alpine carrier.
     Needless to say that there will be some positive effects for both cargo carriers by sharing capacity and streamlining their networks.
     Then there is the global alliance WOW that took off with great expectations.
     The reality today is that WOW is causing lots of headaches.
     WOW is three letters out there—an empty shell, with nobody really knowing what they stand for nor what they should express.
     The rest is dissolution more or less, since each of the four members is doing its own – opportunistic business, be it SIA Cargo, SAS, JAL or LH Cargo.
     The steady decline of WOW continues with neither Jansen nor his colleagues within the pact able to find the glue to bind things together.
     As WOW has faded, Lufthansa Cargo last year decided to change course and concentrate on its own abilities.
     As a result, Shenzhen-based Jade Cargo Airlines was founded as a JV together with Shenzhen Airlines and a German financial investor as partners.
     Furthermore, Lufthansa Cargo cut back its overburdened product range and turned once again to the basics by concentrating on the airport to airport carriage.
     Many see hope in this more realistic approach at last, after the carrier paid tribute to its high soaring fantasies of being the most efficient, innovative, biggest and successful freight airline worldwide.
     Meanwhile others have surpassed the former world champion, Air France/KLM Cargo by tonnage or Cathay Pacific Cargo and Cargolux as far as profits are concerned.
     In both cases LH Cargo had to take a seat only in the second row.
     Putting all the facts together, Jansen’s era concludes with both lights and shadows.
     Which of them predominate depends on the standpoint of the observer.
     Fact is, that his successor will have a lot of work to do, both cleaning up things and pushing the carrier ahead to reach new horizons.
     There is no lack of capable candidates, states a spokesman of LH Cargo.
     But the search will be thorough.
     The nomination for Mr. Jansen’s successor will not come quickly but rather will be made by the supervisory board after the summer in September.
     In the meantime, Lufthansa’s Chief Officer Aviation Services and Human Resources Stefan Lauer, will take over the job as LH Cargo’s interim chairman.
Heiner Siegmund