‘Challenging airfreight market’ hits Lufthansa Cargo results

Lufthansa Group has cited a “challenging market environment in airfreight” as well as labour strikes for the declines it saw in its cargo business in the first quarter.

Cargo capacity was up 10% owing to increased belly space, but that was matched by an 11% increase in sales, while the cargo load factor rose 0.6 percentage points to 59.3%. However, said the group, traffic revenues at Lufthansa Cargo fell by 16% to €757m, down from €902m, as yields declined.

In the overall logistics segment, which includes Jettainer, time:matters, Heyworld, 50% of Aerologic, and CB Customs broker, for the first quarter capacity was up 7% year-on-year, sales were up 10% and the load factor rose 2.1pp to 63.3%.

“However, yields fell in all of Lufthansa Cargo’s traffic areas and were down 25% overall on the previous year; in the previous year, high demand as a result of global supply chain disruptions combined with limited supply had significantly supported the earnings trend,” noted the group.

Lower yields in the logistics business segment led to a 17% decline in traffic revenue to €641m, while overall in the unit revenues fell 16% to €691m. Operating expenses rose 5% to €737m, although the group added: “Increased staff costs due to wage and salary increases as well as higher depreciation and fees and charges were partially offset by lower fuel costs.”

Adjusted ebit declined year-on-year to a loss of -€22m, down from €151m. Capital expenditure fell from €146m the previous year, when advance payments on two 777Fs were due, to €8m. Employee numbers rose 2% to 4,182.

Meanwhile, total revenues at Lufthansa Group were €7.39bn, up 5% yoy. Total net loss was €734m, a 57% increase on the loss of €467m a year earlier.

Carsten Spohr, chairman of the executive board and CEO, said: “We are now leaving the first quarter behind us, which was mainly impacted by strikes, and are at a turning point. We have reached long-term wage agreements for the majority of our employees. This means planning certainty and clarity for the coming years.

“We are still seeing strong demand, which is even significantly higher than last year for the summer. We are therefore continuing to expand our offering and are growing on long-haul routes in particular. Our planes remain well filled throughout.

“One thing is already clear: it will be another very strong summer.”