Lufthansa Cargo to cut capacity
November 22, 2011
Lufthansa Cargo (LC) plans to withdraw at least 20% of its cargo capacity in the new year and lay-up aircraft in a bid to counter an anticipated slowdown in demand.
Traditional cuts in capacity after the Christmas peak will be extended, as LC anticipates “a first half with growth around zero, maybe slightly in the minus,” LC product and sales chief Andreas Otto said last night.
“We would reduce capacity available to customers by 20, 25, maybe even 30%,” Otto said.
A 25% capacity cut would be equivalent to grounding four aircraft, Otto said.
However, added Otto, the second half of 2012 should be “smooth and successful”, producing overall growth of about 3% for the year.
He said US Census Bureau data showed inventories were near record lows – evidence that cargo carriers would be the prime beneficiaries of any upturn in the economy, as retailers needed goods quickly to meet new demand.
Lufthansa Cargo’s third-quarter earnings before interest, tax, depreciation and amortisation (ebitda) fell 51% to €58 million ($78.5 million). This compared with a record profit in 2010.
Elsewhere, Lufthansa has given China’s Shenzhen Airlines until the end of the year to reach an agreement on more investment in their joint-venture, Jade Cargo, said Otto
The unit needed investment to improve profit margins, and Lufthansa “doesn’t exclude any options should that not be forthcoming”, he added.
Courtesy of IFW
