Lufthansa Cargo announces record profits and another B777F

Lufthansa’s air cargo business reported record operating profits last year and has also announced plans to add another Boeing 777 freighter to its fleet.

The Lufthansa Logistics division, which includes Lufthansa Cargo, Jettainer, time:matters and its equity investment in AeroLogic, saw earnings before interest and tax in 2020 reach €717m against a €33m loss in 2019 and revenues climbed by 11% year on year to €2.8bn despite cargo traffic dropping by 27% to 6.5bn revenue cargo tonne km.

Profits and revenues were boosted by higher prices due to industry-wide capacity reductions.

“Lufthansa Cargo was able to offset the decreased capacity due to reduced belly capacities by means of flexible network planning, the temporary use of converted passenger aircraft and deferral of the retirement of the MD11-fleet,” the company said.

“Capacity reductions across the industry also meant that significantly higher average prices and load factors were reported. Sales also fell as a result of the significantly lower capacity.”

Lufthansa Cargo chief executive Dorothea von Boxberg said: “We are pleased to close what was probably the most challenging year in our company’s history with a record result. It is also a record in terms of the commitment and flexibility of our workforce — and we are proud of the outstanding cooperation with our long-standing partners and customers.

“This success enables very decisive investments in our future. We want to make airfreight sustainably better and further strengthen our home base in Frankfurt. That is why we will gradually modernise our cargo center in the coming years and continue to drive forward digitalisation along the entire transport chain.”

Von Boxberg also revealed that the carrier would add its tenth Boeing 777F freighter this year. It also markets the capacity of four B777Fs operated by its joint venture with DHL, AeroLogic.

“This year, we will add another highly efficient Boeing 777F aircraft to our freighter fleet. In doing so, we will also secure jobs in the cockpit and in other areas,” von Boxberg said.

The aircraft is scheduled to arrive in Frankfurt by autumn 2021 and will be stationed there.

“Now that we are optimally positioned with one of the world’s most modern freighter fleets, we will work with our customers to drive forward the regular use of sustainable fuels,” von Boxberg added.

Meanwhile, three of the carrier’s MD-11Fs left the fleet last year, leaving the carrier with five of the ageing freighters at the start of the year. Lufthansa had been hoping to have retired the aircraft earlier, but took the decision to the delay the move at the outset of the Covid-19 outbreak in order to secure cargo capacity.

The logistics division also continued with its ProFlex cost-cutting programme last year. The programme aims to reduce the cost base at Lufthansa Cargo by €70m per year in terms of operating and staff costs, which was reduced by 7% due to a 2% drop in average staff numbers and the introduction of short-time work in Germany and similar measures in other countries.

The overall airline did not fare so well, it today filed a full-year 2020 net loss of €6.7bn but said it expects to return to around 90% of pre-pandemic capacity by 2024.