Lufthansa Talks Capacity Reduction
 Frankfurt—Prepare
for the worst and do the utmost to prevent any harm. Lufthansa Cargo
leaders might apply that old Mao Zedong strategy soon. “If markets
should further deteriorate in the coming months, we’ll react flexibly
by taking out capacity on short notice,” announced the carrier’s
executive board member and head of sales, Andreas Otto, during a press
meeting Monday evening in downtown Frankfurt. Herr Otto spoke of
eventually reducing flights by 20 to 25 percent and did not exclude
even cutting the fleet by 30 percent. Should this happen, the aircraft
will not be sidelined at some U.S. desert airport as occurred during
the global financial and economic crisis in 2008/09, but parked in Frankfurt
or sent for a major technical check and overhaul to one of Lufthansa
Technik’s maintenance shops. “We will probably do both;
sidelining two of our freighters for some weeks and sending one or two
others to our maintenance facility,” Andreas announced.
Concerning the operating results
during the first three quarters of 2011, LH Cargo declares itself as
on the winner’s side, if not best-in-class. The airline posted
173 million euros after nine months, compared to losses of 60 million
euros that Air France-KLM-Martinair Cargo announced and a 25 million
euros deficit Singapore Airlines Cargo made public. “2011 is going
to be one of the best years when it comes to our bottom line,”
the manager said.
Frankfurt’s night flight ban
and the re-routing of some freighters via Cologne, which prove to be
very costly for LH Cargo, blur this outlook, however. Otto spoke of
a “15 million euros profit impact in 2011 resulting from the curfew.”
If the Federal Administrative Court
does not lift the ban, up to 120 trucks per week would be necessary
to carry the Frankfurt consolidations to Cologne to fill the night freighters
of LH Cargo. Besides the additional traffic on the Autobahns and the
noise these road feeders generate, they do also lead to more greenhouse
gas emissions compared to air transports. Touching on this topic, Otto
spoke of an “ecologically and economically absurd situation.”
By quoting DHL’s executive board member, Roger Crook, or Kuehne
and Nagel’s CEO, Reinhard Lange, Andreas pointed out “our
customers are shocked by the Frankfurt curfew.”
Concerning next year’s market
development, Otto is cautiously optimistic despite some dark clouds
hanging in the sky. He expects no real growth during the first half
year, but a trade and transport increase of nearly three percent from
summer onwards. “So far our customer’s bookings for 2012
are pretty much in line with 2011,” Otto stated.
Further, he expects airline consolidation
processes to accelerate. Be it the recently liaised Qatar and Cargolux,
BA-Iberia, United-Continental or Cathay-Air China Cargo—the time
for lone fighters seems to be over. The manager pointed out that the
Lufthansa Cargo Group consisting of Jade, Aerologic, Swiss, Austrian,
SN Brussels, and BMI is the biggest consortium, accounting for ten percent
of global revenues spent for air lifts. But all that glitters is not
gold said Andreas, pointing at Jade. The Chinese air freight subsidiary
remains undercapitalized. “Since Jade’s majority shareholder
(51 percent) is now Air China, we don’t know if they consider
the cargo airline as a partner or competitor,” stated Otto. To
add: “Our aim is to come to a conclusion by year’s end.
We really fight for the future of Jade, but do not exclude any option.”
Touching on the perishable center
in Frankfurt that will open up its doors December 6 and commence operations,
the manager pointed out that temperature sensitive products like pharmaceuticals,
healthcare shipments, and other special items are by far Lufthansa Cargo’s
best performing and most profitable products. Since 2006, they keep
growing by 15 percent annually. While in 2011, LH Cargo will have flown
roughly 48,000 tons of cool products, the amount will grow to over 140,000
tons in 2021, estimates say. The groundbreaking ceremony for the new
building happened last July, at a time when nobody imagined that a local
court would come up with a sudden decision rigorously forbidding night
flights. The facility consists of 4,500 square meters and will offer
a variety of different cool zones within the building. LH Cargo will
not reveal the price for the Perishable Center prior to its inauguration.
Heiner Siegmund/Flossie
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