Lufthansa’s cargo division records first quarter ebit loss

Lufthansa’s cargo business returned to the red during the first quarter of the year as overcapacity and weak demand took their toll on the business.
The Lufthansa Logistics business, which includes the cargo division, ULD specialist Jettainer and its Aerologic investment, saw first-quarter revenues drop by 21.8% year on year to €480m.
Earnings before interest and tax (ebit) slipped to a loss of €19m compared with a €52m profit a year ago.
Last year the German airline group’s logistics division recorded ebit losses during the second and third quarters.
It said the decline in revenues was largely down to pricing and that it had taken additional steps – as well as its strategic cost programme – to safeguard earnings.
It said operating expenses were down by 13.5% on a year ago to €519m due to exchange rates and lower fuel prices while expenditure was just €6m, against €65m a year ago.
“The trends we have seen in the last few months are likely to continue throughout the present quarter,” said Simone Menne, chief financial officer of Deutsche Lufthansa.
“The intensity of the competition and the resulting pricing pressures will not ease – not least because of the low fuel costs.
“This is why it is important that we continue to work consistently on our cost positions. We remain fully committed to our goal of reducing our unit costs this year net of fuel and currency impacts.”
First quarter demand at Lufthansa Cargo slipped by 4.8% year on year to 1.9bn revenue cargo tonne km, while capacity was down 1.6% to 2.8bn available tonne km.
It has taken two freighters out of action this year in response to the weaker demand.
As a result of demand slipping ahead of capacity, its load factor was down 2.3 percentage points to 67.6%.
During the quarter, the cargo business also started to sell capacity on Eurowing’s long-haul services.