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LUB-WOW CARGO ALLIANCE-A
FOUNDED IN 1994. STARTED OPERATIONS IN 1995. BECAME CARGO DIVISION OF LUFTHANSA (DLH) FORMED AS A LIMITED STOCK COMPANY. LUFTHANSA (DLH) WAS THE 1ST AIRLINE IN THE WORLD TO SPLIT PASSENGER AND CARGO OPERATIONS. A K A GERMAN CARGO SERVICES. DOMESTIC, REGIONAL, & INTERNATIONAL, SCHEDULED & CHARTER, CARGO, JET AIRPLANE SERVICES.
LUFTHANSA CARGO CENTER, TOR 25
60546 FRANKFURT MAIN, GERMANY
Germany (Federal Republic of Germany) was established in 1949, it covers an area of 356,945 sq km, its population is 85 million, its capital city is Berlin, and its official language is German.
SEPTEMBER 1995: LEGALLY MADE INTO A SEPARATE COMPANY FROM LUFTHANSA (DLH), WITH 4,300 EMPLOYEES, LUFTHANSA TECHNIK: 10,000 EMPLOYEES & COMPUTER SYSTEMS: 1,100 EMPLOYEES. (DLH) ITSELF, IS LEFT WITH 25,000 EMPLOYEES FOR MANAGEMENT, FINANCE, HUMAN RESOURCES, FLIGHT OPERATIONS, & GROUND OPERATIONS DIVISION.
OCTOBER 1995: INDIA GIVES APPROVAL FOR NEW CARGO OPERATOR, 60% OWNED BY HINDUJA GROUP & 40% LUFTHANSA CARGO (LUB) TO BE OPERATED WITH 4 OR 5 727-200F'S, BUT INITIALLY BY A DC-8F, SHARJAH TO DELHI, BOMBAY, MADRAS, CALCUTTA & BANGALORE (LATER TO BECOME "MODILUFT" (MOU).
SEPTEMBER 1996: FARNBOROUGH AIR SHOW ANNOUNCEMENT, OF 5/7 ORDERS MD-11F'S FOR $1.3 BILLION (JUNE 1998), WITH FREIGHT CAPACITY 93 TONS, FREIGHT HOLD VOLUME 573 CM, SAVINGS OF -39% FUEL/TON KM, OVER 747-200F'S.
WILHELM ALTHEN, CHAIRMAN, SAYS LUFTHANSA CARGO (LUB) WILL RETIRE 747-200F'S, AND SELL DC-8F'S.
OCTOBER 1996: JOINT CARGO OPERATION WITH SINGAPORE AIRLINES CARGO (SQC), EXPANDED TO +2 747F'S, EACH THURSDAY & FRIDAY, FROM FRANKFURT, AND SINGAPORE, VIA SHARJAH.
NOVEMBER 1996: WERNER ROTHENBACHER, GENERAL MANAGER ENGINEERING.
APRIL 1997: CHRISTENS NEW, 747-200F "NEW YORK" AFTER 25 YEARS OF 747F SERVICE.
4,883 EMPLOYEES (INCLUDING 171 FLIGHT CREW (FC) & 4,712 MAINTENANCE TECHNICIANS (MT).
FISCAL YEAR (FY) 1996 PRE-TAX = -$35 MILLION (NET LOSS) (+$11.8 MILLION) (DUE TO EXCESS CAPACITIES & HIGH COSTS): 4.417 BILLION (FTK) FREIGHT TRAFFIC (4.271 BILLION).
AUGUST 1997: LUFTHANSA CARGO (LUB) PLANS TO BE FULLY PRIVATIZED BY OCTOBER 1997. 1ST 6 MONTHS PROFITS, DUE TO FUEL COST CUTS, NEW AIRSPACE FLEXIBILITY OVER ASIA, FOR FRANKFURT TO SEOUL = -32 TONS FUEL ROUND TRIP, SPECIFIC FUEL CONSUMPTION (SFC), FOR 747-200F -3%, RETIRED SOME DC-8'S, AND FASTER LANDING & TAKEOFF PROCEDURES = +$10 MILLION, PRE-TAX (-$24.4 MILLION). LUFTHANSA (DLH) GROUP = +$220 MILLION RECORD!
747-200F "D" MAINTENANCE CHECK AT (AMECO) (BEJ), BEIJING IS EXPECTED TO TAKE 2 MONTHS.
OCTOBER 1997: BUILDING $12 MILLION CARGO CENTER AT ST PETERSBURG, AT STATE-OWNED, PULKOVO AIRPORT.
NOVEMBER 1997: SHANNON TO CHICAGO (ORD) & SAN FRANCISCO (SFO) (747F). ALSO, 747F TO 9 USA CITIES: ATLANTA (ATL), CHICAGO (ORD), DALLA/FORT WORTH (DFW), FAIRBANKS, LOS ANGELES (LAX), MIAMI (MIA), NEW YORK (JFK), SAN FRANCISCO (SFO), & SEATTLE (SEA).
DECEMBER 1997: LUFTHANSA CARGO (LUB) IS 1ST CARGO OPERATOR IN GERMANY, TO ACQUIRE (ISO) 9001 INTERNATIONAL QUALITY STANDARD. HAD APPLIED 2 YEARS AGO, AND TOOK 2,600 INDIVIDUAL AUDITS.
LETTER OF INTENT (LOI) 2ND 747-200F (23621) "D" MAINTENANCE CHECK AT (AMECO) (BEJ).
JANUARY 1998: NEGOTIATIONS FOR LEASING 8 TO 10 TU-204-120C FREIGHTERS, FROM SIROCCO AEROSPACE, EGYPT (1999), WITH ENGINEERING & TECHNICAL SUPPORT BY LUFTHANSA TECHNIK (LTK) (DLH) (WHICH LATER WERE CANCELED).
MARCH 1998: EXPECTS 1997 = >+$61.7 MILLION.
3/3 ORDERS MD-11F'S.
APRIL 1998: 4,883 EMPLOYEES (INCLUDING 171 FLIGHT CREW (FC) & 4,712 MAINTENANCE TECHNICIANS (MT)).
1997 FISCAL YEAR (FY) PRE-TAX = +$116.4 MILLION (-$35.9 MILLION).
SOLD DC-8 FLEET.
MAY 1998: 1 A300B4-203F (047), HEAVYLIFT (HVL) WET-LEASED 1 YEAR.
JUNE 1998: 1ST 2, OF 8 MD-11'S (CF6-80C2D1F) ARRIVED AT FRANKFURT, LANDING SIMULTANEOUSLY ON PARALLEL RUNWAYS.
JULY 1998: WORLD 1997 COMPARISONS: (FTK) FREIGHT TRAFFIC (BILLION):
1 FED 9.3; 2 LUB 6.5; 3 KAL 5.7; 4 UPS 5.4; 5 AFA 5.0; 6 SIA 4.8; 7 JAL 4.2; 8 BAB 3.9; 9 KLM 3.7; 10 CAT 3.6; 11 NWA 3.3.
AUGUST 1998: JOINT, DIRECT FREIGHT SERVICES WITH SCANDINAVIAN AIRLINES (SAS) CARGO, & JAPAN AIRLINES (JAL), BETWEEN FRANKFURT, GOTHENBURG AND OSAKA.
3RD MD-11F DELIVERY.
SEPTEMBER 1998: WILHELM ALTHEN, CEO, TO RETIRE AT THE END OF 1999, TO BE REPLACED BY JEAN PETER JANSEN, OVERLAPPING JANUARY 1999. HIS OLD POSITION OF SENIOR VP CORPORATE PURCHASING TO BE TAKEN BY DR DIETMAR KIRCHNER, MANAGING DIRECTOR, CONDOR (CDF).
EXERCISES 3 OPTIONS MD-11F'S AND +3 ORDERS. MD-11F (48784) DELIVERY.
OCTOBER 1998: LINKS EXPRESS FREIGHT SERVICES & ROUTE NETWORKS, WITH SCANDINAVIAN AIRLINES (SAS) CARGO.
FRANKFURT - DETROIT (MD-11F).
MD-11F (48785) DELIVERY.
APRIL 1999: 4,883 EMPLOYEES (INCLUDING 171 FLIGHT CREW (FC) & 4,712 MAINTENANCE TECHNICIANS (MT)).
1998 = 4.58 BILLION (FTM) FREIGHT TRAFFIC (4.48 BILLION).
1 MD-11F, LEASED TO SCANDINAVIAN AIRLINES (SAS).
MAY 1999: DALLAS/FORT WORTH (DFW) TO MEXICO CITY, & FRANKFURT (MD-11F).
JUNE 1999: 747-230F (22669) TO SOUTHERN AIR (SOF).
AUGUST 1999: MD-11F (48798, D-ALCF) DELIVERY.
OCTOBER 1999: 7TH MD-11F DELIVERY (48799, D-ALCG).
NOVEMBER 1999: 8TH MD-11F DELIVERY.
DECEMBER 1999: TAKES 29% STAKE IN JOINT VENTURE WITH JIN HAI, JET AIR (20%), & PUDONG AIRPORT (51%) TO OPERATE A CARGO TERMINAL WITH A CAPACITY FOR 500K TONS OF FREIGHT/YEAR, AT NEW, PUDONG INTERNATIONAL AIRPORT, IN SHANGHAI.
FEBRUARY 2000: (http://www.lufthansa-cargo.com).
MARCH 2000: LUFTHANSA CARGO (LUB), TOGETHER WITH DEUTSCHE POST, WILL TAKE OVER DHL INTERNATIONAL.
1999 = 1.75 BILLION (FTK) FREIGHT TRAFFIC (+2.5%).
2 747-200F'S (22671;, 22363) SOLD TO SOUTHERN (SOF). MD-11F (48802, D-ALCJ) DELIVERY.
APRIL 2000: COLOGNE - DALLAS/FORT WORTH (DFW) (MD-11, WEEKLY), AND COLOGNE - DELHI, CHENNAI, LAHORE. CANCELS HINDU AIR CARGO (LUI) CONTRACT, FOR SHARJAH, WHEN 727-200F SERVICE, WAS REPLACED BY MD-11F'S TO REGION.
4,883 EMPLOYEES (INCLUDING 171 FLIGHT CREW (FC) & 4,712 MAINTENANCE TECHNICIANS MT).
JEAN-PETER JANSEN, CHAIRMAN EXECUTIVE BOARD.
WILL PARTNER WITH "STAR ALLIANCE" (SAL) PARTNERS, SCANDINAVIAN AIRLINES (SAS) AND SINGAPORE CARGO (SQC) FOR "NEW GLOBAL CARGO," WITH COMMON, INFORMATION TECHNOLOGY (IT), E-COMMERCE, AND INFRASTRUCTURE.
MAY 2000: MD-11F (48803, D-ALCK) DELIVERY.
JUNE 2000: IN SEPTEMBER 2000, WILL IMPLEMENT A CARGO MARKETING & OPERATIONS AGREEMENT WITH VARIG (VAR), FOR SERVICE TO RIO DE JANEIRO, BOGOTA, MONTEVIDEO, AND BUENOS AIRES. ADDS CARGO SERVICE TO SAO PAULO - VIRACOPOS (MD-11F).
JULY 2000: JOINS FORCES WITH DHL CENTRAL AMERICA (DHA) OPERATIONS, FOR SAN JOSE, COSTA RICA, PANAMA CITY, AND GUATEMALA CITY.
1ST 6 MONTHS = 879,000 TONNES CARGO & MAIL (+3.9%).
1990 TOP WORLD OPERATORS:
(FTK) FREIGHT TRAFFIC (BILLIONS): 1 FED 10.31; 2 LUB 7.07; 3 UPS 6.02; 4 KAL 5.96; 5 SIA 5.48; 6 AFA 4.73; 7 BAB 4.54; 8 JAL 4.42; 9 KLM 4.15; 10 CAT 3.77.
1999 = 7.07 BILLION (FTK) FREIGHT TRAFFIC (+5.6%); 4,883 EMPLOYEES.
AUGUST 2000: 747-230SF'S (CF6-50E2) (22363; 22671) DELIVERED TO SOUTHERN (SOF). MD-11F (48804, D-ALCL) DELIVERY.
OCTOBER 2000: 3 ORDERS (FEBRUARY 2002) MD-11F (USED).
JANUARY 2001: 1 MD-11F (48806, D-ALCN), DELIVERY.
FEBRUARY 2001: IN APRIL 2001, FRANKFURT - MELBOURNE (MD-11F, 3/WEEK).
RECEIVES LAST MD-11F, MANUFACTURED BY DOUGLAS (BOEING). IT ENDED 30 YEARS OF TRIJET PRODUCTION AT LONG BEACH, INCLUDING 446 DC-10'S (INCLUDING 60 MILITARY KC-10 VARIANTS), AND 200 MD-11'S. THE 1ST DC-10-10 WAS DELIVERED IN 1970. THE 1ST MD-11 WAS DELIVERED IN 1990 TO FINNAIR (FIN).
MARCH 2001: LAUNCHES ROUND-THE-WORLD FREIGHTER SERVICE WITH AIR NEW ZEALAND (ANZ) (MD-11F, 3/WEEK).
APRIL 2001: LAUNCHES 2/WEEK, 747F SERVICE, FRANKFURT - ATLANTA, CHICAGO (ORD), & NEW YORK (JFK) FOR FREIGHT FORWARDERS KUHNE & NAGEL, AND SCHENKER DEUTSCHLAND.
JULY 2001: 1 747-2D3BF (21251, N505MC), ATLAS AIR (TLS) WET-LEASED.
JANUARY 2002: 2001 = 1.66 MILLION (FTK) FREIGHT TRAFFIC (-8.1%).
747-230F (CF6-50E) (23348, /85 74 13 D-ABZB), (DLH) LEASED, PERMANENTLY STORED AT MARANA, ARIZONA.
FEBRUARY 2002: AIR TRANSPORT WORLD AWARDS (LUB) "WORLD'S BEST CARGO DEVELOPMENT."
2001 LUFTHANSA (DLH) GROUP = -4.3% (FTK) FREIGHT TRAFFIC.
MARCH 2002: LUFTHANSA CARGO (LUB) TO BID FOR 40% TO 49% OF SCANDINAVIAN AIRLINES (SAS) CARGO, WHO ARE PARTNERED WITH SINGAPORE AIRLINES CARGO (SQC), IN NEW GLOBAL CARGO VENTURE.
June 2002: Lufthansa Cargo (LUB) 2001 = +$116,000 (+$144.06): 7.08 Billion (FTK) freight traffic (-7.6%).
2001 Top World Cargo Operators (Billion) (FTK) Freight Traffic:
1 FED 11.05; 2 LUB 7.08; 3 UPS 5.96; 4 SIA 5.88; 5 KAL 5.57; 6 AFA 5.12; 7 KLM 4.64; 8 JAL 4.19; 9 BAB 4.033; 10 CHI 4.030; 11 NCA 3.93; 12 CAT 3.89; 13 CLX 3.77; 14 EVA 3.28; 15 UAL 2.80; 16 NWA 2.79; 17 AAL 2.56; 18 MTH 2.40; 19 AAR 2.38; 20 DAL 2.31; 21 MAS 1.84; 22 SWS 1.79; 23 TII 1.67; 24 QAN 1.57; 25 AHK 1.55.
August 2002: 1 order (2003-03) A300B4-605RF (701). 747-230F (D-ABYO) has "Member of WOW" markings at rear end of fuselage.
December 2002: 747-230F (23621, D-ABZF) stored at Marana, Arizona, USA.
March 2003: 2002 = +EUR 168 Million/+$198 Million (+EUR 66 Million): 6.60 Billion (FTK) freight traffic (+1.4%).
Achieved book profits of EUR 400 Million from the sale of its 25% stake in DHL Worldwide Express.
5,411 employees. (http://www.lufthansa-cargo.com).
May 2003: 2002 = +EUR 168 Million/+$180 Million (+EUR 66 Million).
July 2003: 700 employees.
As a reflection of its deepening strategic cooperation with DHL, Lufthansa Cargo (LUB) is adding stops at East Midlands Airport, UK, to MD-11F service to New York from its developing secondary freighter hub at Colgne-Bonn Airport. (LUB) now will carry DHL shipments to and from the USA, via the East Midlands base, while utilizing capacity on DHL's 757F European network (DHK) for its own express services to destinations in Scandinavia, Spain, and Eastern Europe.
2002 TOP 25 WORLD FREIGHT CARRIERS - Billion - (FTK) Freight Traffic:
1 (FED) 13.20; 2 (LUB) 7.16; 3 (UPS) 6.62; 4 (KAL) 6.25; 5 (SIA) 6.08; 6 (AFA) 4.87; 7 (CAT) 4.85; 8 (CHI) 4.60; 9 (JAL) 4.39; 10 (CLX) 4.16; 11 (BAB) 4.12; 12 (KLM) 3.99; 13 (EVA) 3.28; 14 (NWA) 3.24; 15 (AAL) 2.93; 16 (UAL) 2.79; 17 (AAR) 2.75; 18 (NCA) 2.21; 19 (POA) 1.97; 20 (EAD) 1.96; 21 (MAS) 1.92; 22 (BEJ) 1.88; 23 (TII) 1.824; 24 (DAL) 1.823; 25 (ACN) 1.58.
August 2003: Unveiled its 1st airplane in "WOW" livery, an MD-11F, representing the "WOW" Cargo alliance, encompassing Japan Airlines (JAL) Cargo, Lufthansa Cargo (LUB), Scandinavian Airlines (SAS) Cargo, and Singapore Airlines Cargo (SQC). Has the biggest air cargo partnership with a 20% market share. In 2003-09, will inaugurate an exclusive common cargo terminal in Cargo City North, Frankfurt, to handle alliance shipments. Each of the 4 cargo carriers since July 2003, has been setting up to 10% of eaches capacity for the express shipments of the other 3 partners. They have agreed on a unified Information Technology (IT) support and common quality service and handling standards in order to guarantee the uniformity and reliability of their services.
September 2003: Plans to transition to a single airplane type (MD-11F) by January 2005. Lfthansa Cargo (LUB) currently has 8 747-200F's & 14 MD-11F's. Will sell all 8 747-200F's and acquire +5 MD-11's, ex-Alitalia (ALI), for conversion to cargo by January 2005. 3 747-230F's (23348; 23621; 24138) have been sold to Air Atlanta Icelandic (AID) and wet-leased back for use by Lufthansa Cargo (LUB) on an "as needed" basis.
October 2003: 3 MD-11's, ex-Varig (VAR), GECAS (GEF) leased, to be converted to freighters by Singapore Technologies Aerospace (SASCO).
November 2003: Bernhard Kindelbacher, Senior VP Marketing, replaced Harald Eisenaecher, who will become marketing chief at Lufthansa (DLH) in January 2004.
Battling chronic cargo-market overcapacity and growing price pressures in a weak economy, Lufthansa Cargo (LUB) is hazarding a fall in yields by implementing "appreciably lower charges" in a campaign aimed at recovering German market share that has dipped from 30% two years ago to 25%. "No frills, welcome to the cargo industry!"
Selects Goodrich (BFG) to provide main deck cargo power drive systems for 5 MD-11's.
December 2003: Stephan Gemkow, 43, CFO & Labor Relations Director, replaces Heinz-Ludger Heuberg, who left to become CFO of Thomas Cook (JMA).
January 2004: Peter Pullem, Head Germany, Europe, Africa Sales.
2003 Pre-tax = +EUR 15.8 Million/+$15.8 Million (+EUR 582 Million/+$716.1 Million): 7.09 Billion (FTK) freight traffic (-1%); 1.6 Million tons cargo/mail (-2.7%); 65.6% LF (-1): due to the sluggish economy and surplus capacity.
February 2004: Framework accord (50/50 joint venture) with Shenzhen Airport to develop a regional cargo-handling facility at Baiyun International Airport (scheduled to open in June 2004) as a further alternative to Hong Kong, the area's premier freight hub - "an important freight hub for the Pearl River Delta region."
March 2004: Starts joint operations with DHL: East Midlands to Cincinatti, Cologne/Bonn - Hong Kong - Sharjah - Cologne/Bonn - Milan (BGY) - East Midlands; Brussels - New York (JFK); and Cologne/Bonn - Bahrain - Singapore - Delhi - Cologne.
In April 2004, starts eastbound round-the-world service from its Frankfurt base (MD-11F). Freighters with 85-ton capacity will stop at 7 airports en route. Has been operating westbound round-the-world for 3 years, whereas the new connection offers European customers direct air cargo links to Australia and clients in booming Asian business centers gain access to more transpacific capacity. After a 1st stopover in Kuala Lumpur, the freighter will fly via Melbourne to Auckland. After a technical stop in Hawaii, it will head for Los Angeles and return to Frankfurt via Chicago. The eastbound flight will be appreciably shorter than the existing westerly round-the-world service. Owing to favorable tailwinds, the MD-11F will touch down at Frankfurt only 59 hours after beginning its odyssey. Westbound flights take 66 hours.
April 2004: Offers its fastest growing express product worldwide "with numerous new as well as improved services" including overnight delivery within Europe of large and heavy freight items. A key component is that shipments will be transported on the main deck of freighters operated by Lufthansa Cargo (LUB) partner DHL UK (DHK). Previously, limited belly hold capacities were available on Lufthansa (DLH) passenger airplanes. The new Express offer is available for around 100 connections among 15 European countries. In May 2004, the route network will be extended to a further 9 countries.
May 2004: 3 MD-11's (48431; 48581; 48630) bought from Alitalia (ALI) of 5, to be converted to freighter by Boeing (TBC) with Singapore Airlines (SIA) (SASCO) (ST Aero) providing touch labor using AAR cargo mechanical systems/Goodrich (BFG) main deck cargo power drive systems.
June 2004: In August 2004, joint venture with Cathay Pacific (CAT) Cargo, Hong Kong - Dubai - Munich (747-200, wet-leased, 3/week).
Lufthansa Cargo (LUB) subsidiary "time:matters GmbH" signed a 3-year strategic agreement with AirAsia (ASW) to commercialize its cargo capacity.
(LUB) Charter Agency and (EADS) (EDS) are studying the possibility of establishing a cargo subsidiary that would offer services to civil clients and Airbus (EDS), and operate up to 6 An-124-100's.
747-230F (23621) sold to Air Atlanta Icelandic (AID).
July 2004: Cooperation talks with Shenzhen Airlines (SHZ), whereby (SHZ) will take a minority stake in a joint venture with Lufthansa Cargo (LUB), who currently operates 10 flights/week to China, including 5 each to Shanghai and Beijing.
States its cd.Solutions product line, which offers customers direct deliveries to their warehouses, is now on tap at Munich & Cologne airports.
"Wide-ranging cargo agreement" with US Airways (USA) covering select routes from Europe to the USA: (LUB) will assume responsibility for marketing (USA) freight capacity on flights originating in Europe destined for the USA. In addition, (LUB) & (USA) will consolidate operations and plan to move under one roof at all European airports served by (USA) and in Philadelphia, Pittsburgh, & Charlotte, plus consolidate their operations throughout their networks.
Ben Baldenza, (USA) Senior VP Marketing & Planning stated "Through this agreement with Lufthansa Cargo (LUB), (USA) expects to increase its operational efficiency and marketing exposure to better serve our customers."
The initial phase will including all (USA) flights from Amsterdam, Munich, & Paris Charles De Gaulle (CDG) to Philadelphia as well as from Frankfurt to Charlotte, Philadelphia, & Pittsburgh. Under Phase II, beginning in October 2004, (LUB) will begin marketing and handling (USA) freight capacity from London Stansted to Charlotte, Philadelphia, & Pittsburgh, and from Madrid, Manchester, & Rome to Philadelphia. In summer 2005, services to Philadelphia from Glasgow, Dublin, & Shannon will be added to the agreement.
1st 6 months = 8.86 Billion (FTK) freight traffic (+14.3%).
August 2004: In September 2004, its joint venture partner Japan Air Lines (JAL) will operate 2 extra flights Frankfurt - Tokyo, via Anchorage (JAL) 747-400F) for total 8/week.
Plans to cut -480 jobs by 2006 with the bulk of them in the administration area, including -150 by the end of 2004 through normal attrition.
September 2004: 5,207 employees.
2 MD-11's (48413; 48414), ex-Varig (VAR), bought from Mitsui (MIU), which will be converted to freighters by Boeing (TBC) at (SASCO), Singapore.
October 2004: Lufthansa Cargo (LUB) and Shenzhen Airlines (SHZ) signed an agreement to establish a new cargo airline to be called Jade Cargo International (JDC) and based in Shenzhen. European investment institute DEG is part of the joint venture. (SHZ) will have a 51% stake, (LUB) 25%), & DEG (24%). Will start operations in the Chinese new year 2005. Initially, Jade Cargo (JDC) plans to operate 2 A300-600F's to cities within China and to India, Malaysia, Singapore, & Thailand. Service to destinations outside Asia could be launched later. Rudolf Tewes, General Manager, Jade (JDC), stated the company will focus mainly in standard cargo business.
Frankfurt - Delhi - Guangzhou (MD-11F, 3/week).
November 2004: Signed a cargo handling agreement with (LAN) Cargo for North & South American airports for Chicago O'Hare (ORD) & New York (JFK). In 2005-01, (LAN) will be the general handling agent for Lufthansa Cargo (LUB) at Lima, as well as Rio de Janeiro & Guarulhos, in Brazil. Both carriers have been working on standardizing their training programs and Information Technology (IT) systems, which will permit automatic transmissions.
Scandinavian Airlines (SAS) Cargo switches from Lufthansa Cargo (LUB) to Middle East Airlines (MEA) and Emirates SkyCargo (EMC) to support its cargo services for Gothenburg to Hong Kong (747-400F, 2/week).
January 2005: Lufthansa Systems completed the project to convert Deutsche Lufthansa to the Lido Route Manual by end of 2004. Condor (CDF), Lufthansa Cargo (LUB), & Lufthansa CityLine also are using the charts, which are generated electronically from the Lido navigation database created and maintained by Lufthansa Systems.
April 2005: 2004 = -EUR 39.5 Million: +38.4% fuel costs. Intends to trim its 5,000 payroll by -10% by eliminating administrative staff by 2006.
Launch of Jade Cargo International (JDC), the joint cargo carrier between (LUB) and Shenzhen Airlines (SHZ) with 3 A300-600F's has been deferred until autumn.
May 2005: 5,127 employees.
2 747-230SF (23286; 23287) sold to Evergreen International (EVR).
July 2005: In 2005-09, cargo codeshare with Japan Airlines International (JAL), Frankfurt - Nagoya Chubu International Airport (MD-11F, 2/week).
MD-11F (48413, D-ALCO), delivery.
October 2005: 1st 9 months = 5.77B (FTK) freight traffic (-.7%).
December 2005: Liftoff for Jade Cargo International (JDC), an all-cargo joint venture between Lufthansa Cargo (LUB) and Shenzhen Airlines (SHZ) founded in October 2004, apparently has been pushed back again.
Jade (JDC) now will receive the first of six new 747-400ERFs in June 2006, six months later than initially announced, with the second and third set to join the Shenzen-based carrier in October and December next year.
"The other airplanes will arrive during 2007. First routes are intra-Asian services to Nagoya and destinations like South Korea and India," Lufthansa Cargo Executive Board Member Andreas Otto said. Jade (JDC) originally was expected to begin operations in the first quarter of this year.
Further expansion to Europe is expected with the introduction of the third airplane, with service to North America following after the fourth arrives. The airline is recruiting pilots.
At present, no other departure points in China are planned. Shenzhen Airlines (SHZ) has a 51% stake in Jade, with Lufthansa Cargo (DLH) holding 25%, the maximum for a single foreign investor in a joint venture of this kind. The remaining 24% is held by DEG, a subsidiary of KfW-Bank Group.
January 2006: For full year 2005, Lufthansa Cargo (LUB) Freight traffic 18.73B (FTK) (+1.5%), carried 1.7 million tonnes of freight, down -1%, on a +1.3% increase in capacity owing to additional belly space on the group's passenger airplanes, causing cargo load factor to fall -2 points to 65% LF.
March 2006: Lufthansa Cargo (LUB) announced that Executive Board Chairman Jean-Peter Jansen resigned effective March 31 for health reasons. Deutsche Lufthansa Chief Officer-Aviation Services and Human Resources Stefan Lauer was appointed interim chairman. Lauer will step down as chairman of the Lufthansa Cargo Supervisory Board and be replaced temporarily by Wolfgang Mayrhuber. The LCSB appointed Managing Director-Lufthansa CityLine, Karl-Heinz Kopfle to the LCEB. He will take charge of Lufthansa Cargo operations beginning April 1.
Lufthansa (DLH) named Stephan Gemkow, CFO effective June 1. He is a member of Lufthansa Cargo (LUB)'s executive board and is responsible for finance and human resources. His term will last three years. Predecessor Karl-Ludwig Kley resigned earlier this month to take a position at Merck. Deutsche Lufthansa (DLH) Senior VP-Corporate Finance Roland Busch will succeed Gemkow at Lufthansa Cargo (LUB).
April 2006: Swiss (CSR) World Cargo and Lufthansa Cargo (LUB) Charter signed a marketing and sales cooperation agreement enabling Swiss to sell charter capacity on Lufthansa Cargo (LUB) flights.
May 2006: Lufthansa Cargo (LUB) raised its fuel surcharge to €0.60 ($0.76) per kg from €0.55, effective May 15.
Air Proxy was selected by Lufthansa Cargo (LUB) as its (GSA) for Latvia from May 1, replacing its previous agreement with airBaltic (BAU). Air Proxy already represents Lufthansa Cargo (LUB) in Estonia.
June 2006: Lufthansa Cargo (LUB) in a significant operational change, is closing its station in Fairbanks, which was used for 16 years for technical stops on flights to Japan, in favor of routing all services through Astana in Kazakhstan for refueling and crew changes. The move should reduce flying time and complexity. The station at Almaty also will be closed. From July, 40 weekly (LUB) flights will take off and land in Astana, making it the cargo giant's second-biggest airport.
Lufthansa Cargo (LUB) will take over sales and marketing of Air Madrid (AMD)'s freight capacity and handling effective September 1. The agreement calls for (LUB) to open five new handling stations in Latin America.
July 2006: Lufthansa Cargo (LUB) is evaluating replacement of its 19 MD-11F freighters, which have an average age of eight years, as it looks to brace itself for tough competition in the years ahead. "Maybe during this year, but at the latest in 2007, we have to make a decision," Executive Board Member Operations, Karl-Heinz Koepfle said in Frankfurt. He didn't specify a possible replacement type, but admitted, "there is not much choice anyway." The 747-400ERF, 747-8 or 777F are (LUB)'s most realistic options.
Koepfle said the 747 must have a nose door to be considered and that (LUB) no longer wants a mixed freighter fleet and is not interested in passenger-to-freighter conversions like several of the MD-11Fs it currently operates. He is not interested in the A380F: "So far, only integrators like FedEx (FED) have ordered the A380F. To operate them, there must be a super infrastructure at the airport, but that is not the case on many routes we fly."
On the business front, Koepfle expects challenging times ahead, claiming that Russian competitors such as AirBridge Cargo (ABC) are dropping prices and boosting capacity. "In the next five years, another 75 freighters, some of them converted 747s from Cathay (CAT) or Singapore Airlines (SIA), will be put in the market between Europe and Asia. All freighters will get full, but at what price," he asked, predicting that pressure on yields and traffic flow imbalance will continue.
Asked if (LUB)'s cost structure is designed to handle the difficulties, Koepfle said it is concentrating on flying and optimizing profitable routes. "We have to think about our future market strategy. And the markets will decide in which direction we go."
Further challenges in 2006 lie in (LUB)'s implementation of the new European Union (EU) aviation security regulations, fierce competition in its home market and ongoing efforts to obtain a favorable ruling on operating night flights at Frankfurt.
Startup Jade Cargo International (JDC), in which Lufthansa Cargo (LUB) holds a 25% stake, will operate its first flight on August 8 from Shenzhen. (LUB) is studying how best to cooperate with Jade (JDC).
August 2006: Lufthansa Cargo (LUB) Charter appointed Monika Houck, Head of Global Sales & Customer Relations.
September 2006: Lufthansa (DLH)/(LUB) said it agreed to pay $85 million to settle a string of class-action lawsuits filed in the USA following the February launch of a multinational probe into alleged price-fixing by airlines carrying cargo.
The USA Department of Justice, the European Commission (EC) and regulatory agencies in several Asian countries raided airline offices to investigate alleged collusion and price-fixing in the setting of fuel and security surcharges related to cargo transport. The results of that investigation have not been announced, but more than 30 lawsuits reportedly have been filed in the USA naming Lufthansa (DLH) and other European, USA and Asian carriers and seeking damages for anticompetitive practices relating to air cargo pricing.
Lufthansa (DLH) said in a statement, that the $85 million settlement, subject to court approval, would release it and Swiss International Air Lines (CSR) from liability in the pending class action suits. It added that it has "applied for leniency to the USA Department of Justice, the (EU) Commission and other authorities in other countries and received conditional immunity."
It did not say how the offer, if approved, would affect the company financially or when it would incur the charge on its balance sheet. (DLH) reported net profit of +€183 million/+$231.8 million in the three-month period ended June 30.
Frankfurt Airport (FRAPORT) and Lufthansa Cargo (LUB) agreed to a strategic airfreight partnership that will entail joint investments, modernizing cargo facilities and development of common strategies aimed at speeding up air cargo handling while also meeting higher security standards. Lufthansa (DLH) holds a 10% stake in Frankfurt airport operator (Fraport).
World Airways (WLD) will operate two MD-11F freighters for Lufthansa Cargo (LUB) between the USA and Europe for one year beginning at the end of next month. World (WLD) currently operates 17 MD-11s and DC-10s.
Bangkok's new Suvarnabhumi Airport was set to begin full-scale international and domestic operations at 3 am local time, September 21. First arrival was expected to be a Lufthansa Cargo (LUB) flight 5 minutes later inbound from Mumbai. The first scheduled departure was to be a Saudi Arabian Cargo (SVA) flight to Riyadh. The first passenger flight to arrive was to be VV#171 Aerosvit Airlines (UKA) from Kiev. VV#172 outbound for Kiev will make the first passenger departure.
Some 68 ferry flights were planned for Wednesday from Don Muang Airport, 21 of them operated by Thai Airways (TII). Airports of Thailand said the last commercial flight to depart the old airport was Kuwait Airways (KUW) KU#414 to Kuwait City. It also was set to make the last arrival, inbound from Jakarta.
October 2006: Lufthansa Cargo (LUB) will launch a twice-weekly MD-11F service from Frankfurt to Los Angeles via Chicago O'Hare on October 29. It also will increase frequencies to Osaka Kansai from thrice-weekly to four while New York (JFK), Seoul Incheon and Hong Kong also will see one additional weekly flight. (LUB) operates 19 MD-11Fs and will lease five additional airplanes for the winter season.
November 2006: 1st 9 months = 14.36 billion freight traffic +1.8% (FTK).
January 2007: In 2006, Lufthansa Cargo (LUB) had 8.1 billion (FTK)s (+3.5%).
March 2007: Lufthansa Cargo (LUB) Charter opened an office in Sharjah.
May 2007: World Airways (WLD) will operate three MD-11F freighters on New York (JFK) - Europe routes for Lufthansa Cargo (LUB) over an 18-month period from July 1, under terms of an expanded contract between the carriers. World (WLD) currently operates two MD-11Fs for (LUB) as part of a contract set to expire in October. The new accord supersedes that pact.
June 2007: Lufthansa Cargo (LUB) will transfer all flights from Cologne to East Asia, and the USA to Leipzig (LEJ), beginning October 27. (LUB) said the move is related to the opening of the new (DHL) Express Europe hub at (LEJ) next year. Since March 2004, the two companies have partnered on a joint network connecting Europe, the USA, and Asia. (LUB) will operate its own flights from (LEJ) to Atlanta, Seoul Incheon, and Istanbul Ataturk.
August 2007: Lufthansa Cargo (LUB) reported a -35.5% profit decline to +€40 million.
Finnair (FIN) Technical Services and Lufthansa Cargo (LUB) signed a maintenance agreement covering airframe Maintenance Repair & Overhaul (MRO) of two MD-11F freighters. The deal includes an option for two additional airframe maintenance visits in 2008 to 2009.
September 2007: Lufthansa Cargo (LUB) and express freight specialist DHL Express (DHK) have sought permission from Germany’s competition regulator to establish a new joint venture (JV) cargo airline. The two companies already have an express parcel (JV), "Aerologic (AGC)," created in 2004. This is focused on intercontinental services between Europe and Asia. German competition regulator Bundeskartellamt confirmed the application, saying “DHL (DHK) and Lufthansa Cargo (LUB) are together founding a new airline for freight flights.” But both companies decline to give any further details about their plans for the new carrier. A Lufthansa (DLH) spokesman said: “We have been working together very successfully on a joint venture covering five intercontinental routes. We have announced that we want to extend this co-operation. We will communicate more details shortly.” He declined to comment on possible timelines for a Bundeskartellamt decision in the (JV). A DHL (DHX) spokesman said: “Lufthansa Cargo (LUB) and DHL (DHK) have been working together for many years. It is known that our long-term plan is to intensify and expand this co-operation significantly. We will publish additional in the autumn.” The German press has previously reported that Lufthansa Cargo (LUB) and DHL (DHK) would each take 50% of the new operation, which would start services in 2009 with a fleet of ten airplanes, either Boeing 747F or 777F freighters.
DHL (DHK) is Deutsche Post World Net’s express and logistics business. Lufthansa Cargo (LUB) also carries mail for Deutsche Post outside the Aerologic (AGC) venture.
Lufthansa Cargo (LUB) and German mail and logistics group Deutsche Post plan to create a cargo airline, according to widespread domestic press reports. The companies have applied to set up a 50/50 joint venture. A source close to the deal said that an announcement concerning the cooperation will be made this month. Operations could start in 2009 with a base at Leipzig/Halle.
Lufthansa (DLH) and Deutsche Post are expected to announce the launch of a Joint Venture (JV) cargo airline, "The Financial Times" reported. The new carrier is planning to start operations in the summer of 2009 and will have up to 11 777-200Fs based in Leipzig by 2011.
Lufthansa (DLH) and Deutsche Post World Net (DPWN) confirmed that they are launching a joint venture (JV) cargo airline based in Leipzig in which Lufthansa Cargo (LUB) and (DPWN) subsidiary, (DHL) each will hold a 50% stake. The not-yet-named carrier is slated to begin operating in summer 2009 and will focus on transporting airfreight and express shipments to and from Asia. Its initial fleet will comprise 11 new 777-200LRF freighters, that will be leased and are scheduled for delivery starting in February 2009, (LUB) Chairman, Carsten Spohr said. The (JV) airline will have annual revenue of €500 million/$698.4 million and 250 employees, (LUB) and (DPWN) said. A new cargo center to be built in Leipzig, will create another +150 jobs, they added. Pending granting of traffic rights, the carrier hopes gradually to expand its route network. It is not known how many routes will be served initially, but (LUB) and (DPWN) outlined the network they would like to operate: On weekdays, the airline would serve Singapore, Bangkok, Dubai, Bombay, Shanghai Pudong, Hong Kong, Seoul Incheon, Nagoya, Almaty, East Midlands and Milan. On weekends, it would fly to Pudong, Astana, Singapore, Bangkok, Sharjah, Hong Kong, Chicago O'Hare and New York (JFK).
October 2007: Lufthansa Cargo (LUB) reported a nine-month profit of +€82 million, more than double the +€37 million earned in the year-ago period, despite a -4.8% fall in revenue to €2 billion.
November 2007: 1st 9 months = 6.21 billion (FTK)s (+4.2%) freight traffic.
Russian authorities suspended Lufthansa Cargo (LUB)'s right to fly over Russia. A (LUB) spokesperson said that "since October 28 midnight, we have no traffic rights any more to fly via Russian territory." The change affects 49 weekly flights between Frankfurt and Astana, where (LUB) has established a hub for its network to the Far East. "We have installed an emergency schedule. Each flight to or from Astana, has to be diverted around Russia. That takes an additional 90 minutes flying time, up to three hours for a roundtrip,'" the spokesperson said. (LUB) does not have any estimate of the financial impact. The reason for the suspension is under investigation. "We have a regular procedure in our application to Russian authorities to extend our traffic rights. But this time, the Russians refused this formal procedure," (LUB) said. One possibility could be the quarrel over high Russian overflight fees. According to the Assn of European Airlines, in 2006 the continent's carriers paid nearly €300 million in Russian overflight fees. Meanwhile, talks are scheduled between the German government and the Russian Ministry of Transport. "We hope that a solution will be found as soon as possible," the (LUB) spokesperson said.
Later, Lufthansa (DLH) said that Russian authorities had reconsidered their decision to suspend Lufthansa Cargo (LUB)'s overflight rights immediately and opted to reinstate them until November 15. The reason for Russia's decision appears to be a dispute over the location of (LUB)'s cargo hub, currently in Astana. (LUB) said it needs "long-term and sustained permission" to overfly Russia after November 15, but that "the granting of overflight rights cannot be tied to demands that its cargo hub be relocated." Russia would prefer that the (LUB) hub be out of Krasnoyarsk, but the airline said it would relocate only "if the operational and commercial prerequisites are given," and could not do so in the short term "on purely organizational grounds."
Lufthansa Passenger Airlines (DLH), LH Cargo (LUB), and Germanwings (RFG) need about +420 additional pilots (FC) next year to meet growing demand, including 315 pilots (FC) for the passenger segment alone, and the company is formulating a new training concept to help fill the ranks. Approximately 4,500 pilots currently fly for the three carriers. "Our subsidiary, Lufthansa Flight Training (LFT) trained around 220 new pilots in the last two years at its pilot school in Bremen. For additional expansion, we are looking for an additional 200 pilots on the free market," VP Training Standards & Crewtraining, Werner Maas said. (DLH) doubled its order for student pilots in Bremen from 120 cadets in 2004 and 2005, to nearly 300 this year. "This figure should grow up to 360 by the end of 2008. Since late 2005, we are seeing an enormous growth in pilot training," Maas said. To enhance that growth, a special training concept for new students called "Progresso" will debut in January. The scenario includes updated programs such as (ICAO)'s Multi-Crew Pilot License. Progresso also strives for more efficiency, putting 27 to 30 cadets in each class and reducing training time by six weeks to 22 months. "Progresso not only meets new training standards, but our pilots learn in a more realistic environment," VP (LFT) Pilot School, Nils Ecke said. After 12 months of ground school in Bremen, and four months of flight training in Arizona (Beech Bonanzas and Frasca FNPTs), cadets return to Bremen and continue training on Cessna Citation CJ1+ jets. "The first of four light training jets will be in service by the end of 2008, and with the new program and the new plane, we will bring our cadets closer to real jet flying," Ecke explained. Lufthansa (DLH) has seen a good response so far. "By the end of September, (DLH) had 5,000 applications for ab initio training. They all fulfill the basic qualifications to become a Lufthansa (DLH) cadet," Maas said, adding that the figure is expected to grow to 6,000 by year end.
December 2007: Jade Cargo International (JDC) named Lufthansa Cargo (LUB) Head of Transport Management & Flight Operations, Kay Kratky as its new General Manager. Claus Richter, who had been Head of Operational Support and acting leader of Flight Operations at Lufthansa (DLH)'s passenger division, will succeed Kratky.
January 2008: Lufthansa Cargo (LUB) will expand its foothold in China with a joint venture with Hua Yu Air Cargo Terminal Co (HYACT) at Tianjin Binhai (TSN). A new 90,000-sq-m air cargo center is expected to become operational this year, and will offer the capacity to handle 360,000 tons of cargo annually. (LUB) will own a 46% stake in (HYACT), while Taiwanese investor Hwa-Hsia International Holding will hold 49%, and Tianjin Airport International Logistics will have the remaining 5%. Tianjin's growing importance as a Chinese cargo hub will be enhanced this summer during the Olympic Games, when most cargo flights are expected to divert from Beijing to (TSN). (LUB) currently is part of cargo Joint Ventures (JV)s at Shanghai Pudong and Shenzhen. It also owns 25% of Jade Cargo International (JDC), which operates six 747-400Fs from Shenzhen.
Airlines throughout the world are contending with antitrust charges made at the end of 2007 by the European Commission (EC), which has accused at least 11 and as many as 25 carriers of "cartel" activity relating to airfreight transport. In addition to British Airways (BAB), Japan Airlines (JAL), Air France (AFA)/(KLM), (SAS) Group, and Cargolux (CLX) (all of which confirmed receipt of statements of objections from the (EC) before Christmas).(ANA), Air New Zealand (ANZ), Air Canada (ACN), Cathay Pacific Airways (CAT), (LAN) and Singapore Airlines (SIA) have admitted to being charged.
Lufthansa (DLH), meanwhile, confirmed reports that it is avoiding charges by cooperating with the (EC) probe. "The European Commission (EC), the antitrust department of the USA Dept of Justice and other cartel authorities have granted Lufthansa (DLH) conditional immunity from fines," it said. "Lufthansa (DLH) is working very closely together with the cartel authorities in their investigations of the air transport industry."
Carriers charged late last year, have two months from the receipt of statements of objections to respond in writing to the (EC) and also have the option of requesting a formal hearing. An airline found guilty or admitting to guilt can be fined up to 10% of its annual revenue.
Lufthansa (DLH)/(LUB) and (DHL) Express announced that their 50/50 joint venture (JV) cargo airline, "AeroLogic" will be based at Leipzig/Halle Airport and have a fleet comprising 11 leased 777Fs by 2012. The first eight airplanes will be leased from Deucalion Capital VII, which is managed by Germany's DVB Bank. Boeing (TBC) said the 777Fs, valued at $2 billion, originally were ordered by Iceland's Avion Group in 2005 and were "picked up" by Deucalion in late 2007 after Avion terminated its order. Boeing (TBC) will deliver the first four to AeroLogic (AGC) next year, ahead of the carrier's summer 2009 launch, and four more will be delivered in 2010. AeroLogic, which will paint its airplanes gray and yellow, plans to take delivery of two more in 2011 and one in 2012. No purchase/lease agreement was announced regarding the remaining three airplanes.
Lufthansa Cargo (LUB) Chairman & CEO, Carsten Spohr said the (JV) airline "is the culmination of a successful partnership that has existed for many years between (DHL) Express (DHK) and Lufthansa Cargo (LUB)." The venture first was announced four months ago. The new carrier will be guided by co-Managing Directors, Thomas Papke (from (DLH)) and Thomas Pusch (from (DHL)). Papke said it aims to rank "among the top five cargo carriers in Europe." Pusch added that AeroLogic (AGC) plans "to fly a route network which, in addition to the major Asian cities, includes exciting destinations across North America." The company did not provide specifics of the route network. It officially started business with 20 employees and plans to hire +250 more, including 200 pilots (FC). (LUB) and (DHL)/(DHK) will be responsible for sales and warehouse handling for the new carrier. "For customers of the parent companies, AeroLogic (AGC) will mean more capacity, more flexibility, an expanded network and improved operating times," (LUB) and (DHL) said.
February 2008: Deucalion Aviation Funds signed a Letter of Intent (LOI) with Air France (AFA) to acquire six 747-400 passenger airplanes for conversion and subsequent delivery in 2009 and 2010. Deucalion will convert the airplanes to full freighters at the (IAI)/Bedek conversion facility, with the first expected to be available in September 2009. Marketing of the freighters is being undertaken by DVB Bank, which manages Deucalion. It is likely that the converted airplanes will operate for "Aerologic (AGC)," the new cargo joint venture (JV) between (LUB) and (DHL).
Russian authorities extended Lufthansa Cargo (LUB)'s overflight rights through March. They were scheduled to expire at the end of this month, according to press reports. Russia temporarily suspended (LUB)'s rights in a dispute over the location of its hub. The carrier bases in Astana, but Russia prefers that it hub out of Krasnoyarsk.
Later, Germany and Russia reached an agreement on moving Lufthansa Cargo (LUB)'s regional transit hub from Astana in Kazakhstan to Krasnoyarsk in Siberia, ending a dispute that had resulted in the temporary cessation of (LUB)'s Russian overflight rights. "Our overflight rights via Russia are now granted," (LUB) Chairman & CEO, Carsten Spohr said, adding that (LUB) will move to Krasnoyarsk, once operational and commercial conditions are met and modernization projects at the airport are completed. He expects the earliest possible date to be sometime in 2009. (LUB)'s overflight rights had been granted on a temporary basis through this month. The routing via Siberia saves 30 minutes of flying time between Europe and the Far East. Nevertheless, weekly frequencies via Astana will be reduced from 49 to 35 within the next year, as more flights to Asia operate nonstop. Test flights from Krasnoyarsk will begin in June, Spohr said, adding that he does not anticipate (LUB) incurring extra costs as a result of the transfer.
The decision came on the heels of (LUB)'s announcement that it increased its full-year 2007 operating profit to +€135.6 million/+$87.3 million, up +66.4% from the €81.5 million posted in 2006. The operating improvement came despite a -3.8% decrease in revenue to €2.74 billion. (LUB) transported 1.8 million tons of freight and mail last year, up +2.6%, and load factor climbed +1.4 points to 69.1% LF, a company record. It operates 22 MD-11Fs, including three leased from World Airways (WLD), and uses belly capacity on Lufthansa (DLH)'s passenger fleet.
Spohr said the company is seeking to overcome concerns about overcapacity, particularly in Asia, by integrating the cargo operations of (LUB)'s various ventures. "That's why we work in a global group and spend a lot of effort to combine our group on a single intelligent platform," he said. The Lufthansa (DLH) Group includes (LUB), AeroLogic (AGC) (the joint venture with (DHL)), Swiss Cargo (CSR), Jade Cargo international (JDC) and (LUB) Charter. (LUB) holds a 7.5% global market share and "with Jade Cargo (JDC), AeroLogic (AGC) and so on, this level will grow in the future," Spohr predicted. SEE ATTACHED "(LUB)-(DHL)-AEROLOGIC-MAR08."
April 2008: Lufthansa (DLH) continues to soar despite the difficult environment, posting a +€57 million/+$90.9 million first-quarter profit that compared quite favorably to the +€55 million it reported in the year-ago quarter minus a €449 million book gain on the sale of its stake in Thomas Cook (JMA). The (DLH) Group enjoyed a +19.1% year-over-year increase in revenue to €5.6 billion and a 23.7% lift in operating profit to +€188 million from +€152 million. Swiss International Air Lines (CSR) contributed +€52 million to the operating result, (DLH) said. It said it "remains confident that the Lufthansa (DLH) Group's 2008 operating result will follow up on the operating result from the previous year, and is looking to improve it further," which "appear[s] possible, despite the fact that the worldwide economic conditions have worsened perceptibly." A further erosion in the market or in its ability to compensate for high fuel prices would alter that forecast, it said.
(DLH) transported 16 million passengers during the period, up +29.8%. Traffic rose +29.3% to 34.83 billion (RPK)s against a +29% hike in capacity to 45.13 billion (ASK)s, lifting load factor +0.2 point to 77.2% LF.
Results elsewhere in the company included a +€51 million profit at Lufthansa Cargo (LUB), up from +€9 million in the year-ago quarter; a +9.2% rise in segment profit at Lufthansa Technik (LTK) to +€71 million, and a nearly threefold improvement at Lufthansa Systems (LHS) to +€11 million.
Responding to the announcement, the ver.di union said it would negotiate for a +9.8% salary increase for the 60,000 DLH ground and cabin crew (CA) employees it represents, when discussions with the company begin June 4. Parties will be negotiating a one-year contract.
With effect from 7 April, Lufthansa Cargo (LUB)’s Executive Board has appointed Alexander Plümacher as Managing Director of Jettainer GmbH. He succeeds Dr Mohammed Seiraffi, who is to take over the function of Manager Handling Germany.
May 2008: Lufthansa Cargo (LUB), AiRUnion (ZXD)/(DOD)/(OMK)/(SMR) and Krasnoyarsk's Yemelyanova Airport signed a Memo of Understanding (MOU) establishing a strategic cooperation that will result in (LUB)'s shift from Astana, where it currently stops on flights to/from Asia (ATW). The airport and service companies operating at Yemelyanova promised to make necessary investments, including an upgrade of the CAT II instrument landing system scheduled be completed and certified by year end.
Lufthansa Cargo (LUB) and World Airways (WLD) have extended their contract for 15 months beginning July 1, 2008 for three (WLD) MD-11F freighters to operate between Europe and the United States for Lufthansa Cargo (LUB). (WLD) has been operating continuously for (LUB) since 2006. “World Airways (WLD) has performed very reliably for Lufthansa Cargo (LUB) between New York, Chicago, Los Angeles and Europe, and we are pleased that they have demonstrated their confidence in us by renewing our current contract,” said Jeff Sanborn, Chief Marketing Officer of World Airways (WLD). “Lufthansa Cargo (LUB) is a leading international carrier with an impeccable reputation, and World Airways (WLD) is proud to be one of Lufthansa Cargo (LUB)´s partners in providing excellent service for their customers.” Bernhard Kindelbacher, Senior VP Network & Product Management of Lufthansa Cargo (LUB), added: “We very much appreciate the support of World Airways (WLD) – as they are a very professional and reliable partner for our worldwide network.”
Lufthansa Cargo (LUB) operates 19 MD-11F freighters and utilizes three additional MD-11F freighters from World Airways (WLD).
With a transport volume of about 1.81 million tonnes of freight and mail shipments and 8.45 billion revenue tonne kilometres (FTKT) in 2007, Lufthansa Cargo (LUB) is one of the world’s leading cargo carriers. Its route network encompasses over >360 destinations. Lufthansa Cargo (LUB) serves some of these direct with its own fleet of freighter airplanes, as well as with belly capacities of Lufthansa (DLH)'s passenger airplanes and road feeder services. Most of the cargo business is handled via Frankfurt Airport (FRA), Europe's largest freight hub.
World Airways (WLD), a subsidiary of Global Aero Logistics Inc, is a USA-certificated air carrier providing customized transportation services for major international passenger and cargo carriers, international freight forwarders, the United States military and international leisure tour operators. Founded in 1948, (WLD) operates a fleet of wide-body airplanes to meet the specialized needs of its customers.
June 2008: Lufthansa Cargo (LUB) is an international air freight and logistics business which operates jet airplane services worldwide, using its own fleet and belly cargo capacity from its parent passenger airline Lufthansa (DLH).
Employees = 4,671.
(IATA) Code: LH - 020. (ICAO) Code: GEC (Callsign - LUFTHANSA CARGO).
Parent organization/shareholders: Private Investors (88.52%); MGL Gesellschaft Fur Luftverkehrswerte (10.05%); Dueutsche Postbank (1.03%); & Deutsche Bank (0.4%).
Owns: Air Dolomiti (100%); AeroLogic (AGC) (50%); AirTrust (49%); & Jade Cargo International (JDC) (25%).
Main Base: Frankfurt Main Airport (FRA) and Munich International airport (MUC).
Hub: Leipzig/Halle airport (LEJ).
Lufthansa Cargo (LUB) has opened the world's most modern airport animal facility in Frankfurt Main airport (FRA), Germany. The new Animal Lounge near Gate 26 in the north of the airport covers a total floor space of 40,365 sq ft/3,750 sq m, bringing together a number of other facilities that were spread across the airport complex.
At the Annual General Meeting (AGM) of the International Air Transport Association (IATA) (ITA) in Istanbul, Lufthansa Cargo (LUB) has been appointed the leading cargo carrier for the “e-freight“ project in Germany. (IATA) (ITA) simultaneously named Germany, the biggest air cargo market in Europe, as e-freight market.
Lufthansa Cargo (LUB) Chairman, Carsten Spohr said: “Lufthansa Cargo (LUB) will press ahead firmly with the e-freight project and expressly further paperless cargo transport.” With the help of this initiative, we intend to accelerate processes for the benefit of our customers, create cost-efficient structures and generally advance the cause of the airfreight industry.” In cooperation with customers, Lufthansa Cargo (DLH) will now make preparations for the first paperless shipment and put in place the required processes. The aim is to facilitate the first paperless transport from Germany at the end of the year. The “e-freight” project was initiated as part of the (IATA) (ITA) “Simplifying the Business” initiative in 2004. In November 2007, it was trialled worldwide in a pilot phase in six markets. On completion of the pilot phase, (IATA) (ITA) named further countries including Germany. According to (IATA) (ITA), an average of 38 documents are produced for each single shipment, worldwide. Those documents could fill 39 747F freighters yearly. Theoretically, an electronic solution could save the international airfreight industry in the region of 1.2 billion USA dollars.
July 2008: Austrian Airlines (AUL) reached agreement with AeroLogic (AGC), the Lufthansa Cargo (LUB)/DHL cargo joint venture, to train its pilots (FC) for type ratings for the 777-200F.
August 2008: The Lufthansa (DLH) Group released details of its second-quarter performance, confirming both the +€345 million/+$541.6 million profit that fell -21.2% year-to-year and the significant contributions of its Swiss International Air Lines (CSR) subsidiary.
Group revenue rose +20% to €6.47 billion, and operating profit slipped -6.2% to +€530 million, from +€565 million in the second quarter of 2007. Meanwhile, the company continued to deal with the strike organized by the ver.di union and announced it would operate an amended schedule, that would result in the cancellation of 10% of its domestic and European flights. It canceled 82 flights, including 12 long-haul.
Segment results were reported for the half-year, during which the group as a whole posted a +€402 million profit, that represented a -59.5% plunge from the +€992 million earned the year before, when the sale of (DLH)'s stake in Thomas Cook (JMA), boosted the bottom line.
The Passenger Transportation segment reported a +€348 million profit, down -27.8% year-over-year. Revenue was up +28% to €8.9 billion. Swiss (CSR)'s results confirmed its crucial role in (DLH)'s continuing profitability, as the subsidiary reported six-month (EBIT) of CHF262 million/$252.7 million, down -15.8% compared to the year-ago period, but accounting for nearly half the group result. Swiss's revenue rose +10.9% to CHF2.56 billion.
All (DLH) airlines flew a combined 75.09 billion (RPK)s traffic, during the first half, up +28.3%, against a +28.6% rise in capacity to 95.87 billion (ASK)s that lowered load factor -0.2 point to 78.3% LF.
The group's other reporting segments were profitable as well: Lufthansa Cargo (LUB) posted a +€126 million profit, more than triple the year-ago result; Lufthansa Technik enjoyed a +22.4% profit increase to +€164 million; Lufthansa Systems was ahead +21.4% to €17 million; LSG Sky Chefs was up +20.1% to €43 million; the service and financial companies segment was down -70.8% to €47 million.
Lufthansa Cargo (LUB) will launch twice-weekly, Frankfurt - Toronto on September 2 with an MD-11F. It will fly back to Frankfurt via Atlanta, USA.
September 2008: Lufthansa Cargo (LUB) said it allocated seven MD-11 heavy "C" checks for 2009 after an "intensive tendering" procedure. The work will be carried out by (EGAT) in Taipei and (TAECO) in Xiamen. (LUB) valued the contracts at around €6.5 million/$9.4 million.
November 2008: 1st 9 months = 6.29 billion (FTK)s freight traffic (+1.2).
SEE ATTACHED - - "LUB-2007-TOP-WLD-CARGO."
December 2008: Lufthansa Cargo (LUB) announced a -10% capacity reduction from January 1 in response to the decline in the global cargo business and a "distinct falloff in demand." It will suspend the wet-lease of two MD-11Fs and one 747-400F from World Airways (WLD) and transfer those routes to 747-400ERFs operated by Jade Cargo International (JDC), in which (LUB) holds a minority stake. (LUB) will continue operating its 19 MD-11Fs and, from the middle of next year, also will have access to capacity onboard newly delivered 777-200LRFs operated by AeroLogic (AGC), its joint venture with DHL Express. (AGC)'s launch has been delayed "several months" by the recent Boeing (TBC) machinists strike, (LUB) said.
February 2009: Lufthansa Cargo (LUB) will commence a twice-weekly, Milan Malpensa - New York (JFK) - Chicago O'Hare service on February 18 aboard an MD-11F freighter.
(LUB) reached an agreement with labor representatives to reduce hours for 2,600 employees in Germany. A final deal will be signed "as soon as possible," (LUB) said. "After scaling back our freighter capacities, flexible adjustment of staffing capacities has become inevitable in the company's present situation. We are nevertheless confident that we will be able to safeguard all jobs at (LUB)," Chairman, Carsten Spohr said. December tonnage fell -21.4% year-over-year and this year will be "challenging," he admitted.
Swissport International signed a three-year cooperation agreement with Lufthansa Cargo (LUB) to provide freight handling services at Amsterdam for (LUB) partner carriers, including Jade Cargo (JDC) (a (LUB) and Shenzhen Airlines (SHZ) joint venture). Operations are slated to begin March 1.
March 2009: The Lufthansa Group concluded a volatile 2008 with a +€599 million/+$759.8 million net profit, down -63.8% from the hefty +€1.66 billion earned in 2007, and admitted that it expects declines in passenger numbers, revenue and operating profit this year. While the company said that "there is the potential for a stabilization of revenue and earnings" in 2010 "in the event of an economic recovery," it nevertheless is "observing current developments carefully" and will implement a number of measures to help negotiate the downturn, Chairman & CEO, Wolfgang Mayrhuber said. It also is committed to growth, as shown by the signing of an order for 30 Bombardier CSeries airplanes attests.
Group revenue rose +10.9% year-over-year to €24.87 billion on a +13.8% lift in traffic turnover to €20 billion. Profit from operating activities sank -1.7% to +€1.35 billion from the +€1.38 billion reported in 2007. The group's Swiss International Air Lines (CSR) subsidiary reported 2008 (EBIT) of CHF507 million/$438.7 million, down -6.5% year-over-year.
The Passenger Transportation segment posted an operating profit of +€722 million, down -12.6% year-over-year. The company transported 70.5 million passengers, up +12.2%, and load factor fell -0.9 point to 78.9% LF. Lufthansa Cargo (LUB)'s operating profit rose +20.6% to +€164 million and Lufthansa Technik (LTK)'s increased +2% to +€299 million.
(LUB) has deactivated -20 airplanes in response to falling demand. "The size of these airplanes varies between the Bombardier CRJ-200 and the A300-600, but these two types are the most affected ones," Mayrhuber said. (LUB) has parked four MD-11Fs. The result will be a -0.5% reduction in capacity across the network in 2009, with no plans to cut any destinations. No layoffs are planned either. "We are evaluating short work time measures in all areas of the company and have plans immediately available if it is necessary," Mayrhuber said.
(LUB) will launch new weekly, MD-11F Frankfurt - Hanoi service. It also will add a weekly, Frankfurt - Hyderabad freighter flight on April 6.
To counter falling business class traffic, (DLH) is reconfiguring some cabins. Business class (C) on some 747-400s will be reduced to 60 seats from 96, lowering (ASK)s by -6% per flight. Moveable dividers can cut A340 business class (C) to 36 seats from 48. "This process will be not happening on all our long-haul airplanes. We will start reconfiguration during the summer," Mayrhuber said, adding that there will be no changes to the first class (F) cabins and that all-business-class (C) flights operated by PrivatAir (PTS) will continue.
(DLH)'s role in airline consolidation, however, will not. "There are many offers from northern and southern Europe, but there are no acquisitions planned from our side," he concluded. Meanwhile, (DLH) and the (UFO) cabin crew (CA) union reached a deal that will avert a strike. (DLH) agreed to a +4.2% wage increase through next February, among other terms
Lufthansa Cargo (LUB) said that it will ground two MD-11F freighters based at Leipzig/Halle (LEJ) and park two more airplanes at Frankfurt (FRA). The (FRA) pair will not fly but will be maintained so that they may resume operations immediately if demand dictates. "This reduction equals about -20% of the total capacity of our 19 MD-11F strong fleet. We transferred the [two] airplanes to Leipzig because we got a good offer from the airport [for long-term parking]," a (LUB) spokesperson confirmed.
(LUB) would not rule out grounding additional airplanes if business continues to decline. However, no layoffs are planned and the company has offered its pilots (FC) part-time work solutions. In December, it suspended its wet-lease of two MD-11Fs and one 747-400F from World Airways (WLD). It is scheduled to announce its 2008 financial results on March 19.
Meanwhile, it is expected that Lufthansa Group will ground more passenger airplanes. It already has parked four A300-600s at (LEJ). Additional A300s and A340-300s would be considered for parking if it moves ahead with the reduction.
The massive downturn in global airfreight is hitting home at (LUB) despite a +20.9% increase in year-over-year operating profit to +€164 million/+$214.5 million in 2008, with cargo carriage falling -25% in January and February with similar figures expected this month, according to Chairman & CEO, Carsten Spohr. (LUB) already has parked four of its 19 MD-11F freighters and Spohr said falling yields and the unknown length of the economic downturn leave the business facing considerable risks. (LUB) owns its airplanes and CFO, Roland Busch said it is flexible and would be willing to park more airplanes if necessary.
Spohr said there is "light on the horizon. We see that overcapacity of cargo airlines is shrinking." He said many classic freighters, such as the 747-200F, will be grounded and that "not every cargo carrier has a strong Lufthansa Group in the background. This might help [promote] consolidation." He said that the barrier to entry is getting very high because it is so difficult to finance airplanes, while "the barrier to shut down carriers is getting lower." Spohr said (LUB), currently the "worldwide number two," will rely on its joint ventures (Jade Cargo (JDC) and AeroLogic (AGC)) to help push it past Korean Air (KAL) and will continue to look at nontraditional markets like Africa and Latin America, where the decline in the automobile industry is not impacting loads. (LUB) is using (JDC) 747-400ERFs for twice-weekly flights from Frankfurt to Buenos Aires and is considering flying between China and Africa.
In July it will complete the transfer of its Asian hub from Astana to Krasnoyarsk. A heated two-bay, MD-11 hangar has been completed. The new hub will cut flying time between Europe and the Far East by an average of 15 minutes and will process some 40 weekly flights.
(LUB)'s 2008 revenue was €2.9 billion, up +6.3%, although freight and mail fell -6% to 1.7 million tonnes. (FTK)s freight traffic dipped -2% to 8.28 billion against a +2.8% rise in capacity to 12.58 billion (ATK)s, dropping load factor -3.3 points to 65.8% LF.
April 2009: The recession and resulting demand decline "left their mark" on the Lufthansa Group's first-quarter performance, Chairman & CEO, Wolfgang Mayrhuber and other senior officials said in a note to shareholders, pointing to steep drops in business passengers and cargo in explaining a net loss of -€256 million/-$333.8 million on a more than >-10% decline in revenue. The results are no reason to abandon (DLH)'s long-term strategy of becoming a "system of independent airlines" with multiple European power bases, executives emphasized. "Even if current conditions are turbulent, we are convinced of the long-term growth potential of the aviation market," they wrote to shareholders, noting that the company is "adjusting where necessary" but is still "ready to act when opportunity knocks" and continues to "advance our ongoing transactions" aimed at making (DLH) the primary player in a consolidated European market.
The near-term adjustments include parking 22 passenger airplanes by year end, grounding two MD-11F freighters in the first quarter with two more of the type to be decommissioned by October 1, and discontinuation in the year's first three months of one MD-11F and one 747-400F operated for Lufthansa Cargo (LUB) by World Airways (WLD). (LUB)'s MD-11 capacity has been reduced by around -20%, it said. While the airline company continues to insist that its overall operating profit for the full year will be positive, it projects that (LUB) will incur "a substantial operating loss."
First-quarter consolidated passenger numbers fell -6% to 15.03 million and load factor dipped -3.2 points to 74% LF. Cargo traffic sank -12.2% to 5.16 billion (RTK)s on a -3.3% cut in capacity to 7.9 billion (ATK)s, producing a load factor of 54.9% LF, down -11.5 points.
The passenger airline group posted a quarterly revenue drop of -11.4% to €3.61 billion and incurred a -€30 million operating loss and a -€24 million net loss, reversed from a positive operating result of €37 million and a net profit of +€26 million respectively in the year-ago period. (RPK)s slid -6.1% to 32.67 billion as (ASK)s dipped -2.1% to 44.18 billion.
(LUB) reported a -€66 million net loss, reversed from a +€51 million profit last year, on a -31.2% decline in revenue to €469 million. Lufthansa Technik (LTK) posted net income of +€61 million, down -14.1% from +€71 million last year, on a +19.7% rise in revenue to €1.09 billion.
ABSA Cargo Airline (BSB) is Brazil's second designated cargo airline operating scheduled cargo jet airplane services to domestic and international destinations throughout Latin America, Miami, and across the Atlantic to Frankfurt in code share with Lufthansa Cargo (LUB).
(LUB) has removed four MD-11Fs from service. (LUB) will park two additional MD-11Fs in October, meaning around 30% of its fleet will not be operational. From October, it will operate just 13.
May 2009: AeroLogic (AGC), the joint venture between Lufthansa Cargo (LUB) and DHL Express, took delivery of the first of eight 777-200Fs. A second airplane is due in July, with the next two scheduled for December delivery. It plans to operate all eight by December 2010 and said it is considering adding more 777Fs over the next two years. The first scheduled flight is set for June 29.
June 2009: Lufthansa Cargo (LUB) will begin transferring its Asian hub operation from Astana to Krasnoyarsk (KJA) on June 1 with the first flight from Tokyo Narita to Frankfurt via Krasnoyark. From August, (LUB) will operate 22 weekly flights to and from Europe out of (KJA). (LUB) said the new routing cuts flying time by an average of -12 minutes, saving up to 2,000 tons of fuel annually.
July 2009: Lufthansa Cargo (LUB) will launch a weekly, Frankfurt - Dallas/Fort Worth - Guadalajara - Frankfurt freighter service on July 22.
August 2009: Lufthansa Cargo (LUB) will launch a twice-weekly, Frankfurt - Seattle - Los Angeles freighter service on August 20. It also introduced a weekly stop in Athens on its Frankfurt - Mumbai - Hong Kong freighter routing.
September 2009: Lufthansa Cargo (LUB) would consider giving up some or all of its fleet of 19 freighters if night flights are banned at Frankfurt (FRA), CEO, Carsten Spohr told "Reuters." A German court recently ruled that the Hesse state government should decide on whether to reduce or ban night flights. The state made a reduction to 17 flights per night part of its agreement to permit construction of a fourth runway at (FRA) in 2011. (DLH)/(LUB) said it would require 23 nightly flights by 2020 for both passenger and cargo service, "Reuters" reported. "Everything that goes toward a single-digit number [of night flights] would mean that it no longer pays off to have our own cargo fleet," Spohr said.
Lufthansa Cargo (LUB) will reduce its fleet from 19 MD-11Fs to 13 in October, starting with four airplanes on October 1, and is evaluating making at least a portion of the cut permanent. A decision depends on the pace of global economic recovery and the possibility of a night flight ban at Frankfurt.
October 2009: Lufthansa Cargo (LUB) lost -€61 million in the third quarter, reversed from a +€51 million profit in the 2008 quarter, on a -37.6% plunge in revenue. It is -€193 million in the red through the nine-month period.
January 2010: MD-11F (48414, D-ALCR), WFU to storage at Victorville.
February 2010: Lufthansa Cargo (LUB) will cut more than >-400 jobs and has extended reduced work hours for ground staff imposed in March 2009 through February 28, 2011. "We suffered steep losses in revenue and tonnage last year, the worst in the history of (LUB)," a spokesperson told "Bloomberg News." "When you see that kind of drop, capacity has to be adjusted accordingly." (LUB) added that the job cuts, equivalent to around -10% of its workforce, would be achieved entirely through voluntary early retirement and severance programs.
Meanwhile, it said reduced hours for its 2,600 ground staff would be extended but the reduction would be lowered to -20% from -25%. (LUB) added that full hours may be reinstated before next February 28 and that it is "cautiously optimistic" it can lower the reduction rate further later this year. Peter Gerber, Executive Board Member responsible for Finance & Human Resources (HR), said, "The crisis is not yet over. The latest positive developments in our traffic figures still reflect a significant drop in cargo volume compared with the pre-crisis period. It will take still some time to return to the level we achieved in 2007 or 2008. Overall, the global air freight industry has lost four years of growth due to the crisis."
Lufthansa Cargo (LUB) and Austrian Airlines (AUL) Cargo announced increased cooperation that will eliminate about 25% of the latter's 200 employees. Beginning July 1, the companies said they will "optimize" traffic through their Frankfurt, Munich, and Vienna Hubs, merge global distribution services and "harmonize" product portfolios and production processes. (LUB) and (AUL) will integrate handling and distribution in Austria while freight activities in all other countries will be combined under (LUB). "Vienna Schwechat will become a central European hub for (LUB), comparable to our German hubs at Frankfurt and Munich. Thanks to Austrian (AUL)'s excellent route network, (LUB) customers will also be able to take advantage of direct flights to destinations in all corners of the globe," (LUB) Chairman & CEO, Carsten Spohr said. (AUL) CCO, Andreas Bierwirth called the move "a further step in the reorganization of Austrian Airlines (AUL)."
March 2010: Lufthansa Cargo (LUB) reported a 2009 -€152 million loss, reversed from a +€201 million profit in 2008, on a -32.9% drop in revenue to €1.95 billion.
April 2010: Lufthansa Cargo (LUB) said it no longer transports dogs or cats intended for use in animal experiments, a policy it implemented April 1. A self-imposed embargo for the transport of apes, whales and dolphins has been enforced by Lufthansa Cargo (LUB) for "many years," it said, adding that "on principle" it does not transport any captured wild animals.
June 2010: Lufthansa Cargo (LUB) has decided to reactivate two of its four parked MD-11Fs. One airplane already is back in service and a second jet is being prepared for operations. CEO, Carsten Spohr says (LUB) will make a decision soon on the remaining two airplanes. According to Spohr, traffic and yields are now above the 2008 levels. The good performance by (LUB) enables the Lufthansa Group to keep its 2010 financial guidance for an operating profit of more than >€130 million in spite of the impact of the Icelandic volcano eruption and subsequent disruption of flight operations in Europe.
July 2010: Lufthansa Cargo (LUB) will begin placing its last two parked MD-11Fs into service by year end. (LUB) operates a total of 19 MD-11s.
ACCDT: A Lufthansa Cargo (LUB) MD-11F freighter (CF6-80C2D1F) (534-48431, /93 D-ALCQ) crashed on landing at Riyadh, catching fire and breaking apart. The two pilots (FC) were able to escape via the emergency slide and were being treated at a local hospital for non-life threatening injuries.
An airport official told the "Associated Press" that the airplane "caught fire" on approach and then "split in two halves," when it hit the runway around 11:38 am local time. He said it took 3 hours to put out the fire. The airplane was destroyed.
(LUB) said the airplane was delivered in 1993 and taken over by Lufthansa Cargo (LUB) in 2004. It had logged 10,073 cycles and around 73,200 flying hours. The MD-11F freighter completed its most recent "C" maintenance check on June 22 2009; an "A" check was carried out immediately prior to the flight to Riyadh according to (LUB). It was carrying 80 tonnes of freight.
The flight was en route from Frankfurt and was scheduled to continue on to Sharjah and Hong Kong.
According to data from the Flight Safety Foundation's Aviation Safety Network (ASN), the accident is the fourth landing-related crash and fifth hull loss involving an MD-11F since 1997, when a FedEx (FED) MD-11F cartwheeled after an unstable touchdown at Newark. That was followed by a Mandarin Airlines (MDN) airplane similarly flipping on landing at Hong Kong in 1999 and another FedEx (FED) MD-11F crashing at Tokyo Narita last year, killing the two pilots (FC). In addition, an Avient Aviation MD-11F crashed on takeoff from Shanghai Pudong in November 2009, according to the (ASN).
Saudi Arabia's General Authority of Civil Aviation is conducting the crash investigation. The USA National Transportation Safety Board (NTSB) said Senior Air Safety Investigator, Bill English will head a USA team including two (NTSB) specialists and technical advisers from the (FAA) and Boeing (TBC) to assist in the inquiry.
The brake-up of the Lufthansa Cargo (LUB) MD-11 after landing in Riyadh, Saudi Arabia, on July 27 was preceded by three increasingly violent impacts on the runway, industry sources with detailed knowledge of the accident have told "The DAILY." According to internal reports, the airplane initially touched down at a vertical acceleration of 2g and bounced up in the air again. The second impact followed at a vertical acceleration of 3g while 4.3g was measured for the third and final impact with the runway.
The airplane was on a scheduled flight from Frankfurt to Riyadh with 80 tons of cargo on board. After the third impact, the rear fuselage broke off, according to the reports. The airplane traveled down the runway and veered to the left after 2,400 meters/7,870 feet. It came to rest in rough terrain where the nose gear collapsed. The reports say that the fire broke out only after the landing, contradicting media coverage alleging that an on board cargo fire may have led to structural failure of the fuselage. Both pilots were hurt in the accident, but managed to escape shortly after the airplane had stopped.
In an internal memorandum to pilots (FC), Lufthansa Cargo (LUB) reminds its crews (FC) of the requirement to immediately initiate a go-around procedure if they notice unacceptably high vertical speed on short final. That remark is seen as another hint that vertical speed became too high immediately before touch down.
The accident has some similarity with the March 29, 2009, crash landing of a FedEx (FED) MD-11 in Tokyo. That airplane touched down three times with vertical acceleration increasing up to 3.06g upon the third impact, after which one wing broke off, the airplane turned on its back and caught fire. The two pilots (FC) were killed. Other airplanes landing just before the FedEx (FED) MD-11 reported significant wind shear up to the runway threshold. The initial accident report by the investigator in charge, the Saudi accident investigation authority, is expected in the next three months, a final report could be released in 2011.
SEE ATTACHED - - "LUB-2010-07-ACCDT-MD-11F."
A later report by David Kaminski-Morrow in 2012-02 stated:
Pilots (FC) of a Lufthansa Cargo (LUB) MD-11F failed to recognize the landing bounce which preceded a sequence of hard touchdowns and the destruction of the trijet at Riyadh, Saudi Arabian investigators have concluded.
As it conducted an instrument landing system approach to Runway 33L the MD-11F flared at a low height for its 207t landing weight, and the MD-11F touched down with a sink rate of 780ft/min - far higher than the typical 120ft/min.
The resulting 2.1g impact caused the airplane to bounce but the Saudi General Authority of Civil Aviation (GACA) said the landing was still recoverable at this point.
But the flight crew (FC) did not appear to recognize the bounce, it said, and did not apply the recovery technique, which requires pilots (FC) to hold a normal landing attitude and apply thrust to control the rate of descent. The technique specifically warns against making large forward or aft movement with the control column, because rapidly changing the pitch rate can result in nose-wheel damage or a tail strike.
After the initial touchdown, the MD-11F bounced to a height of 4ft. Crucially the Captain pushed the control column significantly forward, reducing the pitch. Because of main-gear spin-up, the airplane's spoilers had also started deploying and this effectively reduced the angle of attack further.
These combined dynamics sapped the MD-11F's lift. Both pilots (FC) pulled on their control columns but the airplane hit the runway a second time, in a flat attitude, with a sink rate of 660ft/min.
Its nose-gear rebounded from the 3g impact and this, combined with the pilots (FC)'s control inputs, caused a 14° pitch-up as the MD-11F bounced a second time, to 12ft.
The Captain responded by pushing the control column forward again, and then both pilots (FC) pulled back, but could not avert a third hard impact - some 4.4g, far above the design load - which ruptured the fuselage aft of the wing and severed fuel lines, sparking an intense fire.
"While the first touchdown resulted in a bounce, the landing was recoverable," said the (GACA). "The severity of the subsequent touchdowns was not a consequence of the first touchdown, but primarily a result of the pitch angle during the bounces, which resulted from the actions of both flight crew (FC) members on the control column."
Lufthansa (DLH)/(LUB) had a long-established bounced-landing procedure, practiced in simulators, which required the pilot (FC) to maintain 7.5° pitch and apply go-around thrust.
The (GACA) inquiry said the reason for the Captain's contrary response to the initial touchdown (pushing the control column hard forward) was "unclear".
"One possibility is that the Captain did not realize the airplane had bounced and was attempting to de-rotate the airplane while assuming the main gear were still on the ground," it said. It points out that flight crews (FC) on certain airplane types "may have difficulty" in perceiving a bounce, particularly because the cockpit height above the runway might remain constant, or even decrease.
Neither pilot (FC) mentioned handover of control, leading both to make inputs to their control columns and "aggravating" a serious situation, said the (GACA), although it acknowledged that the alarm and confusion made the flight crew (FC)'s reactions "somewhat easier to understand".
Both pilots (FC) survived the 27 July 2010 accident, despite the severe structural damage to the MD-11F (D-ALCQ), which veered off the left side of runway 33L and was consumed by the blaze.
August 2010: Lufthansa Cargo (LUB) named Dieter Vranckz, Regional Director USA Midwest & Canada.
(LUB) will increase its worldwide cargo rates by +20% from October 1.
September 2010: The Lufthansa Group announced that, as expected, Christoph Franz will succeed Wolfgang Mayrhuber as Chairman & CEO of the Lufthansa Group. Carsten Spohr will succeed Franz as CEO of Lufthansa German Airlines (DLH) and has been appointed to the group’s Executive Board, and Karl Ulrich Garnadt was named Chairman & CEO of Lufthansa Cargo AG (LUB).
Lufthansa Cargo (LUB) has entered into a joint venture (JV) with sister carrier, Austrian Airlines (AUL) that will manage sales in Austria and the management of the Austrian cargo capacity. (LUB) owns 76% of the new company with Austrian (AUL) controlling the remaining 24%. (LUB) had already announced that it would cut -450 staff positions itself and it is expected that another -50 jobs at Austrian (AUL) cargo will be cut as a result of the plan. (LUB) will take over cargo sales in all other markets. It is planning to operate 18 MD-11F freighters again by the end of the year when its last remaining two airplanes are scheduled to be reactivated.
2 MD-10Fs (48413, D-ALCO; 48414, D-ALCP), ferried from Victorville to Xiamen for maintenance and return to service after storage.
November 2010: The Supervisory Board of Lufthansa Cargo (LUB) announced that Karl Ulrich Garnadt will succeed Carsten Spohr as Lufthansa Cargo (LUB) Chairman & CEO, effective January 1, 2011. Garnadt, who is currently in charge of Hub Management and Passenger Services on the (DLH) German Airlines Board, will serve for three years. He has been a member of the Board of (DLH) German Airlines since January 15, 2007.
The board also announced that Karl-Rudolf Rupprecht will succeed Karl-Heinz Kopfle as board member-operations at LH Cargo (LUB).
"With these new appointments to the Lufthansa Cargo (LUB) Executive Board, we continue to work with individuals that are leaders in their field," said (DLH) AG Chairman & CFO, Stephan Gemkow, who added that the two men "know the airline business inside-out."
January 2011: Lufthansa Cargo (LUB) says that China in particular and Asia in general have been the engine of airline cargo growth, but says transatlantic and South American markets have also been strong.
(LUB) said its freight traffic (FTK)s reached a record level of 8.9 billion in 2010 as the transport of cargo and mail increased +18.2% compared to 2009 to 1.79 billion tons. (LUB) said the highest growth rates in 2010 were registered in traffic to the Americas (+24.9%) and Asia/Pacific (+20.6%). (LUB) increased its total capacity last year in part by returning all four parked MD-11Fs into service, raising its active fleet of MD-11Fs to 18. Load factor grew +7.3 points year-over-year to 70.9% LF.
February 2011: Lufthansa Cargo (LUB) said it transported 1,200 tons of roses for delivery on Valentine's Day on February 14, equivalent to 34 million roses, or 14 fully booked MD-11Fs.
March 2011: Lufthansa Cargo (LUB), which rebounded from a -€171 million/-$242.1 million operating loss in 2009 to post a +€310 million operating profit in 2010, is eyeing future growth. "Last year we presented the worst-ever (LUB) results, this year the best ever," CFO, Peter Gerber pointed out following (LUB)'s recent earnings release.
The (DLH) supervisory board approved orders for five (GE90)-powered 777F freighters that company executives say will play a key role at (LUB) later in the decade. (LUB) CEO, Karl Ulrich Garnadt said that the order is being finalized with Boeing (TBC). "List price per airplane is $270 million," he noted. "This is the biggest single [freighter] order in our history."
He said (LUB) will receive its first two in November 2013, followed by two more in the 2015 first quarter and the fifth later in 2015. "The future 777F route spectrum is not identified yet, but there is a strong need for additional capacity on routes to North Asia," Garnadt said.
The 777s will be needed for (LUB) growth from 2016 - 2020, he explained. (LUB) plans to start phasing out its 18 MD-11Fs starting in 2018. Garnadt commented that he hopes the 777F is not the only freighter of its size on the market by 2020, by which time (LUB) will require more replacement cargo airplanes. "I hope Airbus (EDS) will be offering a similar product," he said. "We wait for an A350F freighter. We wait for alternatives."
(LUB)'s 2010 revenue grew +43.3% compared to 2009 to €2.8 billion. "Demand increased, thanks to sensational market conditions," Garnadt said. "In general, the outlook for 2011 looks positive."
(LUB) will launch service from Frankfurt (FRA) to Shenzen (thrice-weekly) and Calcutta (twice-weekly) March 27. Weekly 777-200LRF service from (FRA) to Houston and Lahore will be operated under its joint venture (JV) with AeroLogic (AGC).
April 2011: Lufthansa Cargo (LUB) launched weekly, MD-11F Frankfurt - Dacca service on April 20.
May 2011: Lufthansa Cargo (LUB) finalized a previously announced order for five 777F freighters valued at $1.35 billion based on list prices. “The 777 freighter is highly regarded for its fuel efficiency and a noise footprint significantly smaller than comparable freighters,” said (LUB) Chairman & CEO, Karl Ulrich Garnadt. “We are certain that these 777Fs will benefit our customers greatly, as experienced by our AeroLogic (AGC) joint venture (JV) [with DHL Express], which already operates eight 777F freighters. The 777s will be needed for (LUB)'s growth from 2016 to 2020."
August 2011: SEE ATTACHED PHOTO OF MD-11F - - "LUB-2011-08 - 100 YRS CARGO FLTS" TO CELEBRATE THE CENTENARY OF LUFTHANSA CARGO FLIGHTS.
October 2011: After the first six months, the Lufthansa Group returned to a profit, posting an operating profit of +Euro 300 million, an increase of Euro 174 million over last year. This was despite the natural disasters in Japan and political unrest in North Africa. Wholly owned Swiss International (CSR) posted similar figures. The events in Japan and North Africa had a particularly adverse effect on the Group's other carriers, Austrian (AUS) and British Midland International (BMA), both of which recorded losses. However, Lufthansa Cargo enjoyed another productive period with an operating profit of +$133 million.
A German court in Hessen ruled that night flights will be banned at Frankfurt Airport (FRA) when the fourth runway opens on October 21.
Lufthansa Cargo (LUB), which operates 11 scheduled nighttime slots, is expecting considerable financial damage from the night ban as it must now reschedule or cancel several flights beginning with the winter schedule. Resident complaints of airplane noise from nearby Russelsheim and Offenbach were the reason for the court ruling.
During the summer season, (FRA) operated 4,585 weekly flights to 298 destinations and 250 weekly cargo scheduled flights. In 2010, (FRA) had 464,432 movements and an average of 150,000 passengers per day, for a total of 53 million passengers for the year.
Germany’s Federal Administration Court will make a decision on night flights at (FRA) later this year, or at the start of 2012, which will take precedence over the ruling of the Hesse court, "Reuters" reported.
Lufthansa Cargo (LUB) said the German regional court ruling halting night flights from its Frankfurt Airport (FRA) cargo hub would cost (LUB) “double digit million of euros” in rescheduled flights and lost customers.
(LUB) CEO, Karl Ulrich Garnadt criticized the night-flight ban, which will take effect October 30.
The ban, which runs from 11 pm to 5 am, will affect 17 flights nightly; most are (LUB) flights. (LUB) operates 10 scheduled (FRA) nighttime slots in its winter schedule.
A higher court in Leipzig will rule on whether to re-allow night flights in the first quarter of 2012.
“The ruling came to us as a complete surprise,” Garnadt said. He added that (LUB) has implemented a backup plan, which includes canceling two to three flights per week and moving some flights to daytime hours. Also, some flights to China will now stop for several hours at Cologne/Bonn (CGN) after leaving (FRA) in the evening.
“On routes to China, we are losing five hours [of] delivery time and we have to realize that (CGN) nighttime slots are very limited,” he said. Night cargo flights to New York (JFK) and Chicago O'Hare may operate starting in January from (CGN) “but we [will] need heavy trucking from (FRA) to (CGN),” he explained.
Garnadt said it would make no sense to shift cargo operations to Frankfurt Hahn: “The exchange between belly capacity from Lufthansa (DLH) to our freighters is important. We need connectivity.”
He mentioned that (LUB) will stay with its 777F freighter order with first delivery scheduled for 2013, but noted that the Leipzig ruling will determine where the airplanes will be based.
Frankfurt Airport (FRA) officially opened its €1.5 billion fourth runway when German chancellor Angela Merkel touched down on board a government A319 on the new northwest runway. One hour later, its first scheduled flight (a Lufthansa (DLH) A321 from Hamburg with 172 passengers on board) touched down.
Airport operator Fraport AG said that initially the new 2.8 km runway (which connects to the rest of the airport by taxiways crossing a highway and high-speed railway) will increase capacity from 82 to 90 airplanes per hour. At its final stage, 126 movements per hour will be possible, “securing the future of Germany’s leading gateway for international mobility,” said Fraport in a statement.
The expansion won government approval despite opposition from local residents, but in a surprise ruling last week, a regional court halted night flights, effective October 30. The ruling forced Lufthansa Cargo (LUB)’s 10 nighttime flights to reschedule right before the start of the winter season, costing (LUB) “double digit million of euros.”
Fraport AG Executive Board Chairman, Stefan Schulte told audiences attending the inaugural Friday that it is concerned about the night-time ban and called for the Leipzig court to quickly make a final decision on the night-time issue, “taking into account the interests of both the noise-blighted region as well as the airlines operating worldwide.”
He stressed the importance of overnight operations for cargo “in an international economy that is increasingly organized via the global division of labor.” He expressed concern in particular that the temporary ban came at such short notice, just before the start of the new winter timetable.
“Let me reiterate that compared to the 40 to 50 night-time flights that we currently have between 23:00 and 05:00, it will certainly be noticeably quieter,” Schulte said.
SEE ATTACHED - - "LUB-2011-10 - FRA 4TH RUNWAY OPENS."
November 2011: Lufthansa (DLH) will freeze investments, including hiring, for six months owing to the weak global economy. However, fleet investments will not be affected, the staff magazine "Lufthanseat" reported. The move should assure (DLH)’s investment grade credit rating will not be downgraded as demand weakens.
(DLH) CFO, Stephan Gemkow has reportedly said that (DLH)’s 747-8 and A380 airplane deliveries will take place as scheduled. The new generation airplanes will lower operating costs, Gemkow said.
(DLH) has 202 airplanes, worth €19 billion/$25.2 billion, on the delivery schedule through 2018 as it phases out older jets.
In a further move, (DLH) wants to restart talks with airport and supplier companies to reduce fees.
Lufthansa Cargo (LUB) said it is expecting a -€15 million hit to this year's earnings owing to the night flight ban at Frankfurt Airport.
December 2011: Lufthansa Cargo (LUB) has named Matthias Eberle as Head of Corporate Communications, effective April 1. Eberle joins (LUB) from Dusseldorf-based business newspaper "Handelsblatt," where he served as Foreign Editor.
January 2012: All five Lufthansa (DLH) Group airlines carried a total of 106.3 million passengers in 2011, a growth of+ 7.5% compared to the previous year. The group’s capacity (ASK)s grew by +9.8% overall in 2011, while traffic (RPK)s rose +7%. Average passenger load factor fell by -2.2% to 77.2% LF.
Passenger boardings were 65.5 million, up +11.1% compared to the previous year. Capacity rose by +11.8% in the full year, while sales were up +8.8%. Load factor was 77.2% LF, down -2.2% year-over-year.
Swiss International Air Lines (CSR) carried approximately 16.4 million passengers, up +8% compared to the year before, but load factor dropped slightly by -1.1% to 81.1% LF.
Loss-making Austrian Airlines (AUL) transported 11.3 million passengers, up +3.4% compared to 2010, but load factor fell -3% to 73.8% LF, mainly because it is operating larger airplanes.
British Midland International (BMA), which has been sold to British Airways (BAB) parent (IAG), transported 5.7 million passengers, -7.4% less compared to 2010. Load factor fell -4.6%, to 67.1% LF year-over-year.
Germanwings (RFG) carried 7.5 million passengers, -2.7% less than the year before. Load factor increased slightly by +1%.
Lufthansa Cargo (LUB) recorded a +5% growth in its tonne-kilometers transported in 2011 and carried 1.9 million tonnes of freight and mail. Capacity grew by +8.6% in the full year, while sales were up +6.5%, resulting in a load factor drop by -1.4% to 69.5% LF.
Jade Cargo International (JDC) announced it has “temporarily suspended” all operations due to “overall weak demand.”
In a December 31 statement on its website, (JDC) said the suspension “will also provide the shareholders with an opportunity to coordinate with stakeholders to continue with the restructuring of the company’s financial structure.”
According to several German media outlets, (JDC) will ground its fleet of six 747-400ERF freighters and does not have enough money to buy fuel.
Jade (JDC), which was founded in October 2004 as a joint venture (JV) between Shenzhen Airlines (ZHZ) (51%), Lufthansa Cargo (LUB) (25%) and the German development finance institute (DEG) (24%), has faced continuous financial difficulties. According to reports, Air China (BEJ) (which took over (ZHZ)) is considering selling its 51% share. (LUB) also has said it intends to try and sell its 25% stake.
(LUB) Chairman & (CEO), Karl Ulrich Garnadt said in November that Jade "would not survive" a massive market downturn in its current fiscal state and was considering selling its holding.
(LUB) has been forced to reschedule some of its flights from and to its homebase in Frankfurt or to add stops in Cologne/Bonn because of a temporary night flight ban that has been enforced by a German court after the opening of a fourth runway at Frankfurt’s international airport. Its joint venture (JV) with Shenzhen Airlines (SHZ), Jade Cargo International (JDC) has at least temporarily suspended operations with its six 747-400F freighters as the two shareholders and Bank of China are working out a rescue plan for the financially ailing carrier.
Lufthansa Cargo (LUB) is considering replacing its fleet of 18 MD-11Fs and will decide by 2014 which airplane to go with, said (Lub) Chairman & (CEO) Karl-Ulrich Garnadt. “We know we have to order more 777Fs and there is no other option,” Garnadt said. (LUB) finalized an order for five 777F freighters valued at $1.35 billion last spring.
Garnadt said he expects no growth in 2012. “Currently we are -10% down compared to last year. The demand is much weaker,” he said.
(LUB)’s 2012 profitability outlook was strong until last fall when Frankfurt Airport (FRA) announced its decision to ban night flights from October 30, 2011. The ban, which affected 10 (LUB) nighttime slots in its winter schedule, cost the carrier €20 million/$26.4 million in 2011.
Garnadt said if the court does not lift the ban, (LUB) stands to lose -€40 million in 2012. He said (LUB) had planned to lease two more freighters for the coming summer schedule but has “axed” those plans. “If this scenario continues to go in the wrong direction, then we [will] start to replace some MD-11Fs with the first 777s instead expanding our fleet,” he said.
Garnadt said that if the court reverses the ban, (LUB) will “switch some important night flights [back] to (FRA) from July.” He said that 50% of (LUB)’s business is high-value express cargo.
(LUB) will launch weekly, Frankfurt - Detroit - New York - Frankfurt MD-11F service on January 23.
February 2012: The fate of Jade Cargo International (JDC), a Lufthansa Cargo (LUB)/Shenzhen Airlines (ZHZ) joint venture (JV) that temporarily suspended operations on December 31, will be decided by the end of the first quarter.
(LUB) Chairman & (CEO) Karl-Ulrich Garnadt said that (JDC)’s air operator’s certificate (AOC) remains and all salaries for employees have been paid. He said (JDC)’s six 747-400Fs are on the ground and will be maintained. “This is the best thing we can do regarding that situation,” he said.
Garnadt said that (LUB) is trying to sell its shares, “but I cannot tell you how this will end.” He said that bankruptcy could not be ruled out.
(JDC), founded in October 2004 as a joint venture (JV) between (SHZ) (51%), (LUB) (25%) and German development finance institute (DEG) (24%), has faced continuous financial difficulties.
Garnadt said that cargo routes to Asia will remain the most important market for (LUB), as 50% of its business goes to Asia.
“Even we realized a drop in demand in markets like South Korea. In Hong Kong we saw a double-digit drop.” China has been affected, he said, “but in China there had been too much capacity.” Nevertheless, Garnadt said (LUB) has been able to increase sales from Europe to Asia by +22%. “This reduced some of the losses,” he said.
March 2012: Lufthansa Cargo (LUB) Chairman & (CEO), Karl Ulrich Garnadt said that Russia’s opposition to the European Union’s Emission Trading Scheme (EU ETS) has delayed approval for traffic rights for several flight frequencies of (LUB) and AeroLogic (AGC) via Russia.
“Aerologic (AGC) didn’t get a single flight approval via Russia [for the coming summer schedule starting March 25]. We cannot accept this situation and force politics to react,” he said during the financial results conference.
Garnadt said that out of 30 planned weekly (LUB) flights via Russian Territory, only 11 have been approved. “We see that the (EU) is not changing its mind,” he said, adding that the (ETS) is further affecting the already distorted level playing field.
(LUB) and its sister carrier (AGC) have not yet received overflight rights from Russia for the (IATA) summer timetable 2012 period that has started on March 25. Both carriers have now introduced technical stops in Almaty (ALA) instead of Krasnoyarsk (KJA) for their flights to the Far East. While Russia's current move is thought to be related to its opposition to the European Union emission trading scheme (EU ETS) for airlines, Russia had interestingly enough previously forced (LUB) to move its technical stops to Krasnoyarsk (KJA) in 2009 by not granting it rights to fly over the country in 2007 and 2008.
April 2012: A German court in Leipzig upheld a night-flight ban at Frankfurt Airport (FRA) between 11 pm and 5 am local time that is intended to alleviate noise concerns around (FRA). The International Air Cargo Association (TIACA) noted those hours are “prime time for freighter movements.”
(TIACA) said the German court’s decision will likely result in “economic and environmental damage” and reduced investment in (FRA) by cargo airlines. The ban will “reduce future investment by companies at (FRA) and could lead to job losses,” TIACA said. It added that the night-flight restrictions could cause “a negative impact on the environment from greater trucking operations if all-cargo airlines [are] forced to use other airports. Consumers can also expect higher prices for everyday items due to high supply chain costs.”
(TIACA) Industry Affairs Committee Chair, Oliver Evans said, “The danger is that the decision made in Frankfurt could be repeated at other major gateways. If this happens, it’s not only the air cargo that will suffer. Local communities around those airports and national economies will also pay a higher price, both financially and environmentally.”
Lufthansa Cargo (LUB) Chairman & (CEO), Karl Ulrich Garnadt said last month the ban will cost (LUB) -€40 million/-$53 million annually. “This is substantial,” he said. “The amount in turnover we lose is a three-digit million euro number.” The decision could also affect all future investments at (FRA).
The ruling comes after a Hessen court ruled last fall that 17 night-flights would be banned when (FRA)’s fourth runway opened on October 21 following resident complaints of airplane noise from nearby Russelsheim and Offenbach. (LUB) operated 10 of those scheduled night-time slots.
(FRA)’s summer schedule has 4,630 weekly passenger flights to 304 destinations in 108 countries, and 235 cargo flights. Airport operator Fraport said the airport carried 56.4 million passengers and had 487,162 movements last year. Among the top 10 major airports, (FRA) is the only one with a night-flight ban.
May 2012: The Lufthansa German Airlines (DLH) Board has created a Human Resources (HR) & Infrastructure Services Division, and has named Peter Gerber to lead the group from June 1. He has been responsible for finance and (HR) on the executive board of Lufthansa Cargo AG (LUB) since 2009.
August 2012: Lufthansa Cargo (LUB) will take delivery of the first of five (GE 90)-powered 777F freighters in the fall of 2013, followed by two in 2014 and two in 2015.
(LUB) will decide if it will convert the five options over the next several weeks. “To have [airplane] options gives us flexibility,” (LUB) Executive Board Member Operations, Karl-Rudolf Rupprecht said. It is unclear if (LUB) will use the 777Fs for fleet expansion or replacement of its 19 MD-11F airplanes.
(LUB) and its AeroLogic (AGC) joint venture [with DHL Express (DHK)] operate eight 777Fs. “The 777F saves -17% fuel compared to an MD-11F. If we operate 19 777Fs, the fleet needs the same amount of fuel for 11 months compared to 19 MD-11Fs in 12 months,” Rupprecht said.
The Lufthansa (DLH) Group uses 10 million tons of Jet A1 kerosene annually. (LUB) said it has reduced fuel burn by -4% since 2005, or -1.9 tons per flight.
(LUB) is targeting a -25% reduction in CO2 emissions by 2020 and a -50% reduction in net CO2 emissions by 2050.
September 2012: Aerologic (AGC) sees “no end in sight” to its ban from flying in Russian airspace on flights from Europe to Asian destinations due to Russia’s opposition to the European Union’s Emissions Trading Scheme (EU ETS). In March, Russian authorities began delaying approval for traffic rights for several flight frequencies of Lufthansa Cargo (LUB) and AeroLogic (AGC) via Russia due to the (EU ETS).
An (AGC) spokesperson said the ban affects several weekly flights from Europe to Hong Kong, Shanghai and Seoul, which now have to detour through Northern Asia, resulting in higher fuel costs, less maximum cargo loads, delays and a competitive disadvantage. “We are afraid that (AGC) has become a game ball [in] very difficult negotiations,” the spokesperson added. “All this is not easy to accept and to compensate.”
(LUB) has received approval for most of its 30 weekly flights via Russia.
Lufthansa (DLH) has announced plans to build a modern logistics center at Frankfurt Airport (FRA). The center, which will replace the existing Lufthansa Cargo Center (LCC), is expected to open in 2018.
“We are investing in the future and in our (FRA) base,” (DLH) (CEO) & Chairman, Christoph Franz said. (FRA) will remain the central hub for the (DLH) Group’s cargo business, despite the night-flight ban.
(DLH) said it has had to “considerably” adjust the original plans due to the night-flight ban at (FRA). “Building of a new logistics center is a major component of our Lufthansa Cargo (LUB) 2020 strategy,” (LUB) (CEO) & Chairman, Karl Ulrich Garnadt said.
Construction of the main building is scheduled to begin in 2014. (DLH) is investing “mid-triple-digit million” euros in the new logistics center, it said.
October 2012: Lufthansa Cargo (LUB) will launch 4X-weekly, Frankfurt - Tel Aviv service on October 28, with return flights operated via Istanbul, 3X-weekly.
Lufthansa (DLH)’s cargo market is also growing in Brazil. Lufthansa Cargo (LUB) last year increased its MD-11F (FRA) - Campinas Viracopos cargo services to 10X-weekly, up from 6X weekly in 2009.
November 2012: Lufthansa Cargo (LUB) has selected the (IBS) Software iCargo system to manage its air cargo movement across the globe.
The integrated solution will provide web-enabled features to manage cargo logistics for (LUB), replacing its current legacy Unisys-based (MOSAIK) application. (LUB) said the web-enabled features and real time availability of operational information will lead to improved revenue generation for its increasing volumes of cargo movement.
“The clear differentiator is the state of the art architecture/technology as well as the skilled employees,” said Roland Schutz, (CIO) of Lufthansa Cargo (LUB). “Furthermore iCargo is unique in offering consistent process support with its single platform ranging from sales processes to handling as well as (ULD) management and up to revenue accounting.”
(LUB) will deploy the iCargo solution across 100 stations with more than >4,000 users globally.
March 2013: Lufthansa Cargo (LUB) reported an annual operating profit of +€104 million/+$134.2 million, down -58.2% compared to the year-ago period.
Chairman & (CEO), Karl Ulrich Garnadt said, “The results show that we can defend our outstanding position in the international airfreight industry even in difficult conditions.” Demand declined in all major markets.
Revenue fell -8.7% to €2.7 billion. (LUB)'s operating margin declined -4.6% to 3.9%.
Traffic declined -8% to 8.7 million (RTK)s. Capacity decreased -8.2% to 12.5 million (ATK)s, producing a load factor of 69.6% LF, up +0.1 point.
Lufthansa Cargo (LUB) said it is pursuing flexible and demand-driven capacity management. “That was the only way for us to keep the capacity utilization and profitability of our flights,” Garnadt said.
(LUB) aims to raise earnings sustainably by +€70 million by 2015, in accordance with the Group-wide "SCORE" cost-cutting program.
(LUB) anticipates a more positive trend in airfreight markets this year following a global decline in demand in 2012. A perceptible recovery in demand is expected by the second half.
The company is likely to increase capacity marginally in the single-digit percentage range compared to the year-ago period. It is expecting operating profits to be in the range of three-digit millions again in 2013, higher than in the previous year.
In the fall, (LUB) will take delivery of the first two of five 777F freighters it has on order.
July 2013: Lufthansa Cargo (LUB) is expecting to take delivery of the first of five Boeing 777Fs in mid- to late October, followed by a second delivery in November. “During 2014, we will evaluate how we [will use] our five 777Fs options [to transfer options into firm orders or to hold the options]. The decision will depend very much on market conditions,” the spokesperson added.
It has not yet been decided if the new 777F fleet will replace some of its 19 MD-11Fs, which will depend on seasonal demand.
First 777Fs services will most likely be on routes via the North Atlantic. Two more 777F deliveries will follow next year and one will be delivered in 2015.
August 2013: Lufthansa Cargo (LUB) will sell two MD-11Fs when it starts taking delivery of its first two new 777Fs this fall, as part of a deal for five of the type. The order was finalized in May 2011.
(CEO), Karl Ulrich Garnadt said it would depend on market conditions if the new 777Fs will be used for growth or to replace its first MD-11Fs. (LUB) decided to phase out its two oldest MD-11Fs out of a fleet of 18 of the type.
The administrative court of The Hague has prohibited Lufthansa Cargo (LUB) from operating from Amsterdam to Puerto Rico. “With regard to the court decision, we are very surprised and disappointed, of course. Also, some of our customers and analysts that we have immediately informed about the ruling, are quite amazed, to say the least,” (LUB) spokesperson, Matthias Eberle said. He added (LUB) right now is carefully studying the summary and comments from Lufthansa Cargo (LUB) lawyers. “After close consideration of the decision, we will decide whether to file an objection against the ruling and subsequent possible further legal steps,” he said.
Cargo business insiders are calling this is an unprecedented case of protectionism within the European Union (EU) in favor of AirFrance (AFA) - (KLM) - Martinair (MTH) Cargo.
Lufthansa Cargo (LUB) had operated the sector as part of its Quito - Amsterdam route, believing that traffic rights from Puerto Rico is part of the USA - (EU) "open skies" agreement signed in 2007.
September 2013: Lufthansa Cargo (LUB) was planning to increase its capacity by +5% in the fourth quarter, boosting freighter flights to Shanghai, Hong Kong, Africa, the Middle East, and Mexico. However, it is still planning to phase out two MD-11F freighters early next year following delivery of the same number of 777Fs. The new freighters had originally been intended as an expansion of its fleet.
October 2013: Lufthansa Cargo (LUB) is set to take delivery of the first of five Boeing 777Fs - - SEE PHOTO - - "LUB-777F 1ST - 2013-10" on November 1st with the 777F's first flight scheduled to be Frankfurt to Atlanta Hartsfield Jackson on November 10. New York (JFK) and Chicago O'Hare will follow thereafter. Lufthansa Cargo (LUB)'s (CEO), Karl Ulrich Garnadt, said a second 777F is due in November, following which the freighters will be deployed onto Los Angeles International, Toronto Pearson, Manchester International, and Houston International flights. A third 777F will arrive in September 2014. On the issue of (LUB)'s five options, Mr Garnadt said that no immediate decision had been taken, given the cost of the airplane and the current low market demand.
(LUB), which expected to take delivery of its first 777F in Frankfurt November 1, delayed its delivery until some minor rework repairs were made. During final inspection in Everett, Washington, it was discovered there was a small gap between the wing slats that was larger than permitted by manufacturing tolerance. These work requirements were resolved prior to certification and transfer to Frankfurt.
(LUB) said Boeing (TBC) was fully focused on implementing these rework requirements and completed the repairs within a few days.
The first 777F operated on North Atlantic routes. Two more 777F deliveries will follow and one will be delivered in 2015.
(LUB) is considering forming a cargo airline alliance akin to that of the passenger alliance, Star (SAL) Alliance, (CEO), Karl Ulrich Garnadt has announced. According to the "Frankfurter Allgemeine Zeitung," Mr Garnadt is quoted as saying, "We want to work with partners that provide us with access to new markets and additional connections." A decision on whom the alliance would be founded with is expected by mid-2014. In light of the current depressed global freight market, he added that the cause of failure of past similar initiatives had now been isolated. He listed the benefits of such an alliance as: better utilization of airplanes and improved quality control across the board, as well as a greater choice of destinations and connections to the customer.
November 2013: The 2nd 777F (D-ALFB) was delivered at the end of the month - - SEE PHOTO - - "LUB-777F 2ND - 2013-11." These 777Fs are replacing the two 1992 vintage MD-11Fs, which were previously operated by VASP (VSP) and Varig (VAR). 777F options are held for five more.
December 2013: Lufthansa Cargo (LUB) added its second Boeing 777F to its fleet on November 27th. The airplane is expected to enter schedule service December 6 from Frankfurt to Chicago O’Hare. Two airplanes will follow in the first half of 2014 and a fifth in 2015.
January 2014: Capacity utilization in the freight business was good last year, with the airplanes at Lufthansa Cargo (LUB) reporting a cargo load factor of 69.9% LF (+0.2% points) despite sluggish demand on global freight markets. The company transported 1.7 million tonnes of freight and mail, -1% down on last year. Capacity (in cargo tonne-kilometers) was cut slightly by -0.3%, while sales remained on par with the previous year. In the Logistics segment, the Group carried a total of 1.9 million tonnes of freight and mail (-0.9%). Across the Group, capacity was +1% higher than in the previous year and sales were +0.4 percent higher. In the Group's freight business, the load factor came to 69.1% LF overall (-0.3% points).
Lufthansa Cargo (LUB) is expecting a +5% tonnage growth in 2014 even though the air freight business remains challenging.
Gross Domestic Product (GDP) growth for 2014 is expected to increase and (LUB) said there was an upswing in business at the end of 2013. “We are hopeful we can keep this momentum going,” Executive board member Andreas Otto said.
(LUB) is planning to grow without a capacity increase. “We know our plan is ambitious,” he said, adding that times of +8% annual tonnage growth are over. Otto said it is a very difficult time to sustain a freighter business in Europe.
In March 2013, (LUB) reported an annual operating profit of +€104 million/+$134.2 million, down -58.2% compared to the year-ago period.
(LUB)’s operations are profitable “with a very small cash flow,” Otto said, “despite a night-flight ban at Frankfurt. Otto said the night-flight ban has an annual negative impact of €40 million on (LUB)’s operations. It will announce financial results in March.
Up to 56% of its business is in the cargo belly of passenger airplanes. (LUB) will announce a strategic partnership with a cargo carrier in the summer, he said, without giving further details.
(LUB) has five Boeing 777Fs on order; it launched its first 777F scheduled flight from Frankfurt to New York (JFK) and Atlanta in November 2013. Otto said the airplane is “performing excellently. The 777F is the best airplane, but also the most expensive one [to buy],” he said.
Lufthansa Cargo (LUB), which had 18 MD-11Fs in its fleet, has phased out the two oldest of the type. During summer 2014, two more MD-11Fs will be parked in Europe, leaving 14 MD-11Fs plus its 777F fleet.
“If cargo demand increases, we can bring these two MD-11Fs back in service quickly. Our MD-11Fs are fully [financially] written off,” he said, adding that some MD-11Fs up to 14 years old can easily operate for another 10 years.
(LUB) will take delivery of a third 777F in March; the fourth airplane is expected to arrive in June and the fifth one in 2015.
“We have to make a decision later this year if we will firm options for +5 more Boeing 777Fs or not,” Otto said, adding the decision will depend on future cargo market conditions.
February 2014: The Lufthansa Group will benefit from a new agreement between Russian and German authorities, which last week approved Russia’s AirBridgeCargo (ABC) to operate fifth freedom flights 3x-weekly from Frankfurt to the USA.
AeroLogic (AGC), a joint venture (JV) of Lufthansa Cargo (LUB) and (DHL) Express, will also benefit from the agreement.
Lufthansa Cargo (LUB) spokesperson, Matthias Eberle confirmed “Lufthansa Cargo (LUB) will add 14 weekly crossings over Siberian airspace. Its joint venture (JV), AeroLogic (AGC), will add +13 additional weekly frequencies,” which results in cutting flying time and saving fuel burn.
Lufthansa Cargo (LUB) will be able to operate up to 30 roundtrips between Europe and the Far East per week by the shortest possible route. Lufthansa (DLH) Passenger Airline can also benefit from 13 additional weekly frequencies for its Asian routes.
Lufthansa Cargo (LUB) executive board member Andreas Otto said the Russian side receives traffic rights for two weekly Frankfurt - USA flights and one charter flight.
AirBridgeCargo (ABC) can take advantage of these 3x-weekly transatlantic cargo flights on basis of fifth freedom rights from a number of German airports.
The agreement could be seen as a long-awaited compromise after a several years of traffic rights discussions. In 2007, Russian authorities suspended Lufthansa Cargo (LUB)’s right to fly over Russia.
Otto said that Lufthansa Cargo (LUB) is expecting a +5% tonnage growth in 2014 even though the air freight business remains challenging. “We see ourselves as well positioned,” Otto said.
March 2014: Hamburg Airport began construction work on its new air cargo center March 17. The 60,000 sq m Hamburg Airport Cargo Center (HACC), which replaces the existing facility, is expected to begin operations from summer 2015. “We, the airport, are investing around €45 million/$62 million from our own funds. The money is a good investment for the site and the region. The new (HACC) will further strengthen the already successful aviation sector in Hamburg, bringing security for the future,” Hamburg Airport (CEO), Michael Eggenschwiler said.
The (HACC) design was planned in close cooperation with freight forwarding companies already based at Hamburg. Cargo handling halls and offices are based on a concept that allows for an annual capacity of up to 150,000 tonnes of air freight. 6,000 sq m is assigned to office buildings, while 20,000 sq m is assigned to logistics operations for freight forwarding agents and freight handling companies. Cargo airplanes, such as the widebody Antonov An-124, can taxi to a loading and unloading point directly in front of the cargo center.
777-FBT (41677, D-ALFD), delivery.
July 2014: Lufthansa (DLH) Passenger Airlines will reduce its 2014 capacity (ASK) growth by more than -50% and will remove five airplanes from its European network and three from intercontinental routes in the 2014/15 winter timetable period.
(DLH) Chairman & (CEO) Carsten Spohr said the move is part of a series of actions needed to achieve its 2014/2015 financial goals.
Spohr said the airplanes to be removed “includes our oldest Boeing 747-400 and oldest Airbus A340-300 on the long-haul fleet.”
Lufthansa Cargo (LUB) will reduce its winter capacity by withdrawing two McDonnell-Douglas MD-11Fs. “In general, cargo capacity is not growing,” Spohr said. “Also, airplanes like the Boeing 747-8I or Boeing 777-300 can carry much more cargo in their bellies.”
The Lufthansa Group remains confident of its revised business projections for 2014 and 2015. The executive board expects to report an operating profit of +€1 billion/+$0.75 billion or about +€1.3 billion after adjustments.
August 2014: Effective on August 1, 2014, Karl Ulrich Garnadt, the member of the Executive Board of Deutsche Lufthansa Aktiengesellschaft and (CEO) of Lufthansa German Airlines (DLH) (2014-05) succeeded Stefan Lauer to be the Vice-Chairman of (AMECO) Beijing.
October 2014: Lufthansa Cargo (LUB) said on Tuesday October 7th it plans to “operate all of its flights” after the Lufthansa (DLH)/(LUB) pilot union, Vereinigung Cockpit (VC) announced another strike October 8 and 9 in its ongoing protest over transition payments for early retirees. This is the (VC)’s 5th strike action since the end of August.
(VC) said the strike would run from 3 am local time Wednesday and 10:30 pm Thursday and would affect all cargo flights departing from German airports. “Since the (DLH) management insists on largely unchanged maximum demands for months, the (VC) looks to these other measures forced,” it said. “The (VC) declares that it is always ready by association to avert strikes and calls for the executive board to finally send signals that allow a resumption of constructive negotiations. We regret any inconvenience to the customers of Lufthansa (DLH)/(LUB).”
However, Lufthansa Cargo (LUB) said it plans to “operate all of its flights” despite the walkout. “The strike was set to ground all cargo flights scheduled to depart from Frankfurt on Wednesday and Thursday.” (LUB) said “two flights will be departing earlier than scheduled, allowing them to bypass the strike period. As (LUB) usually flies about half of its freight in the bellies of Lufthansa (DLH) and Austrian Airlines (AUL) passenger airplanes, the effects for customers will be kept at an absolute minimum.”
The (VC) had called off a strike September 15 on short notice after Lufthansa (DLH) had come up with more details for an early retirement scheme. (DLH) had terminated the previous contract at the end of last year seeking cost savings and demanding that pilots (FC) raise their earliest possible retirement age from 55 to 60 over the long term. New entry pilots (FC) are to contribute financially to early retirement packages. The (VC) argued the more precise proposal put forward by the airline is actually worse than what previous ideas and “no real will by management to find solutions is recognizable.”
Lufthansa Cargo (LUB) said: “Lufthansa (DLH) has shown willingness to compromise in its discussions with the Vereinigung Cockpit (VC) and offered new negotiations on the disputed issues. (DLH)/(LUB) therefore has little understanding for this renewed call to a strike and also considers it entirely out of proportion “especially as the minimum age for early retirement at Lufthansa Cargo (LUB) is already 60 years.”
In its first-half financial statement released July 31, the Lufthansa Group had said pilot (FC) strikes cost it more than >-€60 million/>-$76 million.
February 2015: News Item A-1: The first worldwide cargo joint venture (JV), begun December 1 by German Lufthansa Cargo (LUB) and Japan-based, (ANA) Cargo, is already a success for both partners. “With a joint venture (JV) like this, you get benefits and opportunities, which you would just get within a merger,” (LUB) Chairman & (CEO), Peter Gerber said in Tokyo.
Phase 1 of the (JV) started December 1, 2014 on Japan - European routes. Phase 2, from Europe to Japan, will be implemented during summer 2015.
The agreement includes belly cargo capacities from Austrian Airlines (AUL) and Lufthansa (DLH) Passenger airlines. It also includes (ANA) passenger flights to Germany, Austrian (AUL) to Vienna, Lufthansa (DLH) passenger and 6x-weekly, Frankfurt - Tokyo Narita cargo flights. This offers a total of 87 weekly flights operated within the (JV), according to (ANA).
(LUB) is also in talks with further potential partners to establish additional (JV)s, such as for service on the North Atlantic.
Gerber said belly cargo in passenger airplanes is a significant source of revenue for Lufthansa (DLH) intercontinental flights. In 2013, the distribution of revenue from such a flight would be 89% passenger and 11% cargo. “In today's business environment, you can’t do a long-haul passenger service profitably if you don’t have your cargo business well in order,” he said. On average, 507 tons of cargo will be transported per week in the belly of passenger airplanes and 452 tons on its Boeing 777F/MD-11F freighter fleet.
(LUB) takes delivery of its fifth 777F this month and it has five further 777Fs optioned.
Some of the current 16 MD-11Fs could operate for more than ten more years. “A complete fleet roll-over will also depend on the future positioning of (LUB),” Gerber said. “So far, within the passenger business we have a strong hold. But of course, we have to produce good results. Then the cargo business unit will have a reason to exist within the Lufthansa Group.”
News Item A-2: German rail operator Deutsche Bahn (along with several other unnamed companies) is set to file a billion-euro lawsuit seeking damages from 11 air cargo carriers, including Lufthansa Cargo (LUB) and British Airways (BAB), for allegedly operating a price-fixing cartel from 1999 - 2006.
Match 2015: Lufthansa Cargo (LUB) reported an annual operating profit of +€100 million/+$106 million for 2014, up +26.6% compared to an operating profit of +€79 million for 2013.
“We achieved a good result in challenging conditions,” (CEO) Peter Gerber said. “A strong focus on top quality, high-performance products and flexible capacity management played a key role in this, along with Lufthansa Cargo (LUB)’s strength in sales.”
Revenue rose +0.3% to €2.45 billion, producing an operating margin of 4.1%, up +0.9% points over the prior-year period.
(AFTK)s fell -1.1% to 12.3 billion on a -1.4% decrease of (FTK)s to 8.6 billion, producing a load factor of 69.9% LF.
Gerber expects air freight will continue to be a growth market, despite slightly slower growth rates.
Gerber said (LUB) continues to invest in its Frankfurt hub even though the night-flight ban, which went into effect in 2012, has affected business. “The night-flight ban is still very painful and creates about -€40 million less in revenue. But what London Heathrow is in terms of passenger traffic for Europe, that is Frankfurt in terms of cargo business,” he said.
Despite its geographical location, Gerber said Frankfurt is the epicenter of Europe’s industrial sector. “They have their main consolidation centers in Frankfurt,” he said.
The cargo carrier continues to systematically implement its “Lufthansa Cargo 2020” future program, which includes the new Boeing 777F fleet; (LUB) recently took delivery of its fifth of the type.
Lufthansa Cargo (LUB) is also in the process of implementing a modern Information Technology (IT) system for freight handling, which is based on a well-proven industry solution. The roll-out is scheduled for completion by fall.
The "eCargo" project, which involves the digitalization of all of the company’s main processes, is also picking up pace. Preparations for the new construction of the air freight terminal at Frankfurt continue. Construction work could start by the end of 2015.
The "SCORE" profit improvement program was a major factor behind (LUB) reviewing its earnings situation last year, which contributed €116 million of earnings in total (for 2014). “We will continue to work hard on our cost structure and find ways to increase revenue,” (CFO) Martin Schmitt said.
Lufthansa Cargo (LUB) expects profits to increase in 2015 and should be up slightly on 2014 in an environment with solid growth rates.
May 2015: Lufthansa Cargo (LUB)’s Boeing 777F and MD-11F fleet were more efficient than ever, with 0.183 liters/tonne km (a +5.2% improvement over 2013). In 2014, Group-wide efficiency in cargo transportation increased +0.8%.
July 2015: News Item A-1: German airline group Lufthansa (DLH) reported a 4.3% increase in sales on the passenger side in June but was unable to sell the extra freight space it offered during the month, it said in its monthly traffic report on July 9.
Global air freight demand has been slowing in recent months as economies stutter, after a promising start to the year, figures from air industry association (IATA) show.
(DLH) said that in June, freight capacity at its Lufthansa Cargo (LUB) unit rose by +2.9%, driven by space in the bellies of its passenger planes, but sales dropped by -0.9%. Cargo load factors, or how full its planes are, dropped -2.5% points.
On the passenger side, capacity growth was slower than sales at +3.2% and the load factor increased +0.9 percentage points to 83% LF.
News Item A-2: Lufthansa Cargo (LUB) has implemented fuel efficiency software from Aviaso. The all-cargo airline is the third carrier in the Lufthansa group to implement the comprehensive fuel efficiency solution from Aviaso. Lufthansa Cargo (LUB) has set a target to lower the specific fuel consumption of its freighter fleet by -25% by 2020 compared to 2005.
News Item A-3: Worldwide Flight Services (WFS) will acquire a 51% stake in Fraport Cargo Services (FCS) as part of a strategic partnership with Frankfurt Airport operator and owner Fraport AG. The transaction is expected to close by September.
The joint goal of this partnership is to expand the global reach of (FCS) in the rapidly moving and highly competitive air cargo industry, as well as strengthening Frankfurt Airport’s role as a major air cargo hub, both companies said.
By entering into this partnership, Fraport is retaining a major 49% stake in (FCS), while maintaining a substantial role in the company’s management. (FCS) employs more than >600 people.
“This is a major transaction that positions our joint company as the leading cargo handler at one of the biggest cargo airports in the world,” (WFS) Executive Chairman, President & (CEO), Olivier Bijaoui said.
(WFS) has annual revenues of €700 million/$764 million, serves 50 million passengers and handles more than >4 million metric tons of cargo per year for 300 airlines.
At its Frankfurt Airport home base, Fraport handled about 60 million passengers and some 2.2 million metric tons of airfreight and airmail cargo in 2014.
September 2015: News Item A-1: "Lufthansa Pilots Stage Walkout September 8 - 9; 140,000 Travelers Affected" by (ATW) Victoria Moores, September 8, 2015.
Lufthansa (DLH) pilots (FC), represented by the Vereinigung Cockpit (VC) union, started a two-day walkout, which affected operations September 8 to 9. (DLH) said that 140,000 travelers were affected as it canceled 1,000 flights.
The first day affected long-haul and cargo flights, while the second day targeted (DLH)’s short- and medium-haul network, including Germanwings (RFG).
(VC), which staged the walkout in a dispute over pay and conditions, said (DLH)’s Airbus A330, A340, A380, and Boeing 747 departures from Germany between 0800 and 2359 on September 8 were affected, along with all Lufthansa Cargo (LUB) departures.
During normal operations, (DLH) would have operated 1,500 passenger and seven cargo flights on September 8. (DLH) said it had brought in volunteer pilots (FC) and it only canceled 84 of 170 long-haul flights. It maintained 90 intercontinental and all seven scheduled cargo flights. “With a relatively large number of cockpit (FC) personnel indicating their willingness to fly, (DLH) was able to operate more than half of its intercontinental passenger services despite the (VC)’s strike call. All in all, 84 long-haul services from or to Frankfurt, Munich or Düsseldorf had to be canceled, while 90 such flights were operated,” (DLH) said.
On September 9, the short- and medium-haul strike ran from 0001 until 2359. (VC) said all A320, 737 and Embraer departures from Germany were affected.
(VC) spokesman, Markus Wahl said the walkout was a “last resort” after the two sides failed to reach agreement in their collective labor negotiations, which are focused on growth, cost control and the Eurowings (EWG) project.
November 2015: Lufthansa Cargo (LUB) eyes cost cuts, and grounds two MD-11Fs.
(LUB) will implement cost-saving measures, called "C-40," starting next year as it reacts to the weakening air cargo market and negative effects from pilot (FC) and cabin crew (CA) strikes.
Martin Schmitt, Chief Financial Officer (CFO) said that C-40 whould deliver a sustainable annual cost savings of -Euro 40 million/-$43.7 million from 2018. "This is necessary to increase possibilities for future investments," he said.
December 2015: News Item A-1: United Airlines (UAL) and Lufthansa (DLH) plan to enhance their cooperation to include freight operations by United (UAL) Cargo and Lufthansa Cargo (LUB) on routes between the USA and Europe.
The parties are discussing a wide variety of possibilities to create a seamless network for the shipping industry, including an alignment of information technology (IT) services and warehouse facilities.
The cargo cooperation, which is expected to create a more efficient and comprehensive transatlantic cargo network, is subject to finalization of the commercial arrangement and compliance with existing European Union (EU) and USA regulations and necessary government approvals.
“Competition, especially for European cargo carriers, has increased. But the North Atlantic still remains a very good market for us,” (LUB) (CFO), Martin Schmitt said recently.
The first worldwide cargo joint venture (JV) began in December 2014 by German Lufthansa Cargo (LUB) and Japan-based (ANA) Cargo. “This (JV) is working very well, but we have to increase the volume [of transported cargo],” Schmitt said.
The (ANA) Cargo agreement includes belly cargo capacities from Austrian Airlines (AUL) and Lufthansa Passenger airlines (DLH). It also includes (ANA) passenger flights to Germany, Austria - Vienna, and Lufthansa passenger (DLH) and Lufthansa Cargo (LUB) Frankfurt - Tokyo Narita flights.
News Item A-2: Lufthansa Cargo (LUB) elected Sören Stark to the executive board, effective April 1, 2016.
Sören, an industrial engineer is currently in charge of Aircraft Maintenance at Lufthansa Technik (DLH) (LTK) and succeeds Karl-Rudolf Rupprecht, who will retire at the end of March.
March 2016: Lufthansa Cargo (LUB) reported earnings (adjusted (EBIT)) of +€74 million/+$81 million for 2015, down -40% compared to +€123 million in 2014. “We will still be operating in an extremely challenging market environment in the years ahead,” Lufthansa Cargo (LUB) Chairman & (CEO), Peter Gerber said.
The airfreight market saw sizeable overcapacity from the beginning of summer 2015, negatively affecting (LUB)’s load factors and yields. It was also impacted by turbulence in the Chinese market and a very strong USA dollar, which affected export-driven industries in the USA in particular, (LUB) said.
Full-year revenue decreased -3.3% to €2.25 billion, producing an adjusted (EBIT) margin of 3.1%, down -1.9% points over the prior-year period.
Last fall, Lufthansa Cargo (LUB) initiated the "C-40" cost-cutting program, which should reduce annual costs by at least -€40 million by 2018.
Gerber said "C-40" will have an impact on (LUB)’s work force. “The head count will be reduced, but it is too early to say how much. We are in talks with our social partners; in June we expect to announce more details,” he said. (LUB) has 4,600 employees.
Lufthansa Cargo (LUB) will also reduce service provider costs to further strengthen competitiveness on the cost side to grow profits in its core business.
Cargo earnings were also depressed by strikes at (DLH) Passenger Airlines in the important fourth-quarter period, which led to further reductions in transported cargo volumes and revenues. (DLH) said the strikes cost -€13 million.
“54% of our business is freighter business; the remaining share is transported in the belly of (DLH) passenger aircraft. In marketing belly capacity, (LUB) is probably the most successful carrier,” Gerber said.
(AFTK)s rose +2% to 12.6 billion on a -2.9% decrease of (FTK)s to 8.26 billion, producing a load factor of 66.3% LF, down -3.4% points.
Gerber said (LUB) is implementing a comprehensive range of cost-cutting measures. “We would stick with the Lufthansa Cargo (LUB) 2020 future strategy in spite of the decline in profits,” he said. (LUB) will focus on offering an innovative product range and enhancing product portfolio. The successful, global renewal of the Information Technology (IT) landscape has been a milestone in achieving a fully digitized air cargo business.
In addition to the (ANA) joint venture (JV), (LUB) said it will work very closely with United Airlines (UAL) in the future. “We are also marketing the cargo capacities of Eurowings (EWG) long-haul flights, which make our network even more appealing.”
Gerber confirmed that two MD-11Fs remain grounded. “But with low fuel prices right now, operating the remaining  MD-11Fs is comfortable for us,” he said.
(LUB) also has five Boeing 777Fs in its fleet. “We are keeping the option for five more 777Fs. But in the face of the challenging environment, we will not make a decision right now [to change them into firm orders].”
The (LUB) board is expecting this year’s earnings (adjusted (EBIT)) to slightly exceed last year’s. “But 2016 remains challenging,” Gerber said.
May 2016: News Item A-1: The Lufthansa Group recorded a net loss of -€8 million/-$9 million for (1Q) 2016, reversed from a net profit of +€425 million for the year-ago period.
The group, which comprises Lufthansa (DLH), low-cost carrier (LCC) Eurowings (EWG), Austrian Airlines (AUL), and Swiss International Air Lines (CSR), made the loss on revenue of €6.91 billion, slightly down on last time’s €6.97 billion.
The Lufthansa group said the sharp reversal in profits compared to a year ago was because the previous year’s quarter included a +€503 million boost from the early conversion of a convertible bond with USA independent carrier, JetBlue Airways (JBL).
Even after stripping out this factor, however, (1Q) cash flow from operating activities declined -21.5% to €1.1 billion, the result of the increasing trend among customers of booking tickets closer to travel dates, which means money tended to accrue to the company later than in past years. However, that effect should even out over coming months, provided overall bookings remain at current levels, Lufthansa said.
Although the group enjoyed “significantly higher” passenger volumes, traffic revenue dipped -3.9%, a reflection of heavy downward pressure on pricing.
Despite the headline figures, the new business year had seen a “solid start,” Deutsche Lufthansa (CFO), Simone Menne said. “We are seeing significant pricing pressure at our passenger airlines, and even more at Lufthansa Cargo (LUB). “But the substantial unit cost reduction at our passenger airlines has more than made up for the pricing declines. And we are not just benefiting from further fuel cost reductions and non-recurring effects. We have also improved our operating cost structure. This marks an important change in trend in our unit cost development.”
There was a -4% reduction in unit costs, excluding fuel and currency conversion effects. Reduction in fuel costs was -€237 million over the period.
She added the new Eurowings (EWG) division had begun life well, with a “very encouraging load factor of 94.2% LF” on its long-haul services in the first quarter, with positive customer feedback. “Its first-quarter result is a decline on last year’s, but this partly reflects (EWG)’s startup costs and we feel that the new Eurowings (EWG) is well on track.”
While both Lufthansa (DLH) and Austrian Airlines (AUL) posted improved (EBIT) figures, SWISS (CSR) numbers dipped, mainly the result of reduced demand because of the strength of the Swiss franc. Lufthansa Cargo (LUB)’s figures, meanwhile, suffered from global overcapacity in the cargo market, particularly on transatlantic routes and it is bracing itself for a challenging financial year, the group said.
Looking ahead, it does not expect to see pricing pressures ease over the rest of the year, with yields under particular pressures to and from South America because of the region’s weak economy.
Bookings from Chinese and Japanese travel groups are also down. However, both Europe and North America (Lufthansa (DLH)’s largest and most important regions for traffic) are showing “more stable trends.”
News Item A-2: May 2016: "Cathay Pacific (CAT) and Lufthansa Cargo (LUB) Enter Joint Business Agreement" by "China Aviation Daily" May 12, 2016.
More direct connections, greater flexibility and time savings combined with service enhancements (these are just some of the benefits customers will enjoy in the future thanks to the cooperation between the cargo division of Cathay Pacific Airways (CAT), the leading air cargo carrier in Asia, and Lufthansa Cargo (LUB), Europe's largest air cargo carrier.
Simon Large, Director Cargo at (CAT), and Peter Gerber, (CEO) & Chairman of the Executive Board of Lufthansa Cargo, signed an agreement for a highly integrated bilateral cooperation in Frankfurt. With respect to the cooperation routes between Hong Kong and Europe, both airlines will in the future work closely together on network planning, as well as sales, Information Technology (IT) and ground-handling. This will bring Hong Kong, the world's busiest air cargo hub, closer to Europe, strengthening one of the world's great trade lanes.
"Our joint network will cover more than >140 direct flights per week between Hong Kong and 13 European destinations", said Simon Large. "Cathay Pacific (CAT)'s large number of direct connections to multiple European destinations, complements (LUB)'s strength in Frankfurt, the most important European air freight hub, and in Europe through its dense feeder-network."
"As a result of our joining forces, customers will gain access to unique flexibility with more flights to choose from and a combination of feeder and direct flights. In this way, their cargo can reach its destination hours earlier", explained Peter Gerber. "We will also have more options for shipments which have to be transported by freighter due to their size or properties."
The cooperation will also focus on service enhancements. For example, customers will be able to access the entire joint network via the booking systems of both partners. Joint handling, initially at the Hong Kong and Frankfurt hubs, will also make things easier for customers, since there will be just one point for export drop off and import delivery.
Both partners plan to transport the first shipments under the framework of the cooperation from early next year (initially from Hong Kong to Europe). The ability to also book eastbound shipments from Europe to Hong Kong will then follow in the course of the year.
The joint activities will be carried out in full compliance with all applicable laws, including the competition rules of the European Union (EU) and Hong Kong.
June 2016: Lufthansa Cargo (LUB) will eliminate up to -800 jobs, out of a world wide workforce of around 4,600, as part of an overall effort to reduce annual costs by -€80 million/-$90 million and remain competitive. The move is part of its "C-40" cost-savings program, which was launched last year.
“In detail, -450 to -500 job cuts are planned for Germany; -250 to -300 world wide. This [workforce decline] should deliver a cost reduction of -€55 million [annually].” The overall target of -€80 million in annual cost savings doubles the target of -€40 million in annual savings from 2018 announced when the "C-40" program was unveiled last year.
Negotiations with labor unions will take place over the next several months on how to implement the job cuts.
(LUB) has already reduced its MD-11F fleet, which went from 14 to 12 airplanes in 2015, “but we are not reducing further freighter airplane capacity, because this [freighter] operation is positive. But belly cargo capacity has become a problem,” the spokesperson said. “54% of our business is freighter business; the remaining share is transported in the belly of Lufthansa (DLH) passenger aircraft,” Lufthansa Cargo (LUB) Chairman & (CEO), Peter Gerber explained in March.
(LUB) reported 2015 (adjusted (EBIT)) earnings of €74 million ($81 million), down -40% compared to €123 million in 2014.
Lufthansa Cargo (LUB) operates a fleet of five Boeing 777Fs and 12 MD-11Fs.
August 2016: Lufthansa Cargo (LUB) has taken over complete ownership of time:matters Group, a company specializing in global same-day delivery and time-critical international spare part logistics.
(LUB), which spun off "time:matters" as a subsidiary in 2002, had already held a 49% share. The majority 51% shareholding was held by financial investor Aheim Capital and time:matters management.
Both companies already cooperate on express products. The takeover is in line with Lufthansa Group’s “7 to 1: new concepts for growth” strategy.
Lufthansa Cargo (LUB) Chairman & (CEO) Peter Gerber said that time:matters has established itself in recent years as the leading specialist for same-day delivery and emergency logistics in Europe.
“With time:matters, we are aiming to grow our business in the special segment as well. Our focus is all about maximum reliability, exceptional service and customized solutions,” Gerber said. Time:matters is to be maintained as an independent company.
Since 2006, time:matters has more than tripled revenue to over >€65 million/$72.2 million, time:matters (CEO) Franz-Joseph Miller said.
The global cargo business is still under pressure. In June, the Lufthansa subsidiary announced plans to eliminate up to 800 jobs, out of a worldwide workforce of around 4,600, as part of an overall effort to reduce annual costs by €80 million ($90 million) and remain competitive. The move is part of its C-40 cost-savings program, which was launched last year.
SEE VIDEO: LUB-MD-11F - Sao Paulo to Manaus.jpg
November 2016: "ACCDT: Lufthansa Cargo MD-11F (CF6-80C2D1F) (645-48805, /01 D-ALCM) at Buenos Aires on November 10, Dropped Left Nose Wheel Upon Touchdown" by Simon Hradecky, "The Aviation Herald" November 10, 2016.
Argentina's (JIAAC) initially reported the left nose tyre burst, rated the occurrence an accident, dispatched investigators on site and opened an investigation.
On November 11, 2016 the (JIAAC) reported that upon touchdown at Ezeiza the entire left nose wheel separated from the nose gear leg.
Planespotters Ezeiza (Aviones En Ezeiza) report the entire left nose wheel separated from the nose gear and penetrated the fuselage.
December 2016: News Item A-1: "Lufthansa Acquires Brussels Airlines, to Become Part of Eurowings (EWG)" by (ATW) Kurt Hofmann, December 15, 2016.
The Lufthansa Group has taken over 100% of SN Airholding, the parent company of Brussels Airlines (DAT)/(EAD), in a deal to fully integrate the Belgian carrier into Lufthansa (DLH)’s Eurowings (EWG) Group in 2018.
(DLH)’s supervisory board agreed to exercise a call option on the remaining 55% stake, effective December 31. The transaction will close by the beginning of January 2017. The price for the acquisition of the remaining 55% of the shares is €2.6 million/$2.8 million, which will be transferred to a consortium of 30 shareholders.
“We have seen a series of radical changes in the industry and, over the last several months, competition has increased to a high level. We see a lot more consolidation to come. The strong [airlines] are getting bigger and this is what (DLH) intends to do,” Lufthansa Group (CEO) Carsten Spohr said
(DLH) said Brussels Airlines (DAT)/(EAD)’s attractive market, its established African network and its advantageous cost structure (which has allowed the airline to compete with the tough low-cost competition in the Belgian market) will further strengthen the Lufthansa (DLH) and Eurowings (EWG) market position.
“Africa is one of the reasons we have invested in (DAT)/(EBA), and only airlines that have a highly competitive cost structure have a place in the Lufthansa Group,” Spohr said. After the acquisition, Brussels Airlines will operate its 23 long-haul routes, as well as 79 destinations in Europe, under the umbrella of the Eurowings Group.
“With Brussels Airlines, the Eurowings Group will grow to 180 aircraft. Creating a more pan-European Eurowings is a big step in that direction. The Lufthansa Group is number one in Brussels. Aviation in Belgium needs a stronger partner,” Spohr said.
Lufthansa acquired a 45% share of SN Airholding 8 years ago. “In 2008 we had only 3 long-haul aircraft. Today we have 9, and soon we will fly to Mumbai. All this would not have been possible without (DLH),” SN Airholding board Chairman Viscount Etienne Davignon said. Between 2013 and 2015, passenger numbers have increased +30% to 7.5 million. The brand Brussels Airlines will, over time, be complemented by the claim “member of the Eurowings Group,” he said.
Brussels Airlines’ fleet harmonization toward an Airbus A320 family fleet for the European network will be continued. The fleet comprises 42 short- and medium-haul aircraft, including 2 in wet lease, and 9 A330s. “We are sure that a big joint decision will be the future long-haul fleet of Brussels Airlines,” Spohr said.
In the past 3 years, Brussels Airlines has reduced overall costs by -15%. For the fiscal year of 2015, Brussels Airlines generated an operating profit of +€43.4 million. With the full integration of Brussels Airlines, synergies will add up to a mid-double-digit million euro amount per year. “We understand the local brand. We believe there is a need to connect Europe to the world and not to be connected [from others]. Today 120,000 people work for Lufthansa, which will increase to 124,000 [with Brussels Airlines], and we are getting to 700 aircraft next year,” Spohr said.
“Over the past 8 years, our collaboration with (DLH) has proven its potential to create perspectives and safeguard jobs. Furthermore, the Lufthansa Group will enable us to expand our African reach by positioning Brussels as the Sub-Saharan Africa Hub of the Lufthansa Group,” Davignon said.
The Brussels Airlines management board remains unchanged under the leadership of (CEO) Bernard Gustin. In addition, an advisory council will be established and will support the integration process.
News Item A-2: "Lufthansa, Etihad Finalize Code Share, Wet Lease of 38 Airberlin Aircraft" by (ATW) Kurt Hofmann email@example.com, December 16, 2016.
The Lufthansa Group and Abu Dhabi-based Etihad Aviation Group have finalized a code share deal and wet-lease agreement for 38 airberlin (BER) Airbus A319/A320 aircraft operating for Eurowings (EWG) and Austrian Airlines (AUL). The code share deal, which is subject to government approval, is set to begin in January 2017.
The 6-year wet-lease agreement, effective February 2017, is also subject to regulatory requirements. Of the 38 former (BER) aircraft, Eurowings (EWG) will operate 33 and Austrian Airlines (AUL) will operate 5.
Lufthansa Group Chairman & (CEO) Carsten Spohr said, “We are looking forward to partnering with the Etihad Aviation Group. The wet-lease contract with airberlin (BER) fosters the growth of our Eurowings (EWG) Group. The code share agreement of Lufthansa (DLH) and Etihad (EHD) will offer our customers more benefits and complement both airlines’ networks. We will consider extending our cooperation in other areas.”
Eurowings also announced it will establish a new base at Munich Airport, where it will base 4 A320 family aircraft initially. Additional aircraft will be placed in Vienna and Palma de Mallorca.
As a result of the wet-lease agreement, Eurowings said it is able to phase out up to 20 older A320s, reducing overcapacity. Airberlin said it could reduce restructuring costs. On September 28, (BER) released details of its restructuring plan, which hinged on placing up to 40 A320s with the Lufthansa Group and reducing employee positions by up to 1,200.
Under the code share agreement, Lufthansa (DLH) will place its LH code on Etihad Airways (EHD)’s 2x-daily flights between Abu Dhabi and Frankfurt and 2x-daily Abu Dhabi - Munich services. (EHD) will, in turn, put its EY code on (DLH)’s flights between Frankfurt and Rio de Janeiro, Brazil as well as Bogota, Colombia.
Etihad Aviation Group President & (CEO) James Hogan said, “We have long seen Germany as a key strategic market for the Etihad Aviation Group and this new relationship with (DLH) marks the next step in our commitment to the leading European Aviation Group.”
On December 5, oneworld (ONW) member airberlin (BER) announced the sale of 49.8% of its Austrian subsidiary FlyNiki (NKI) to Etihad (EHD) for €300 million/$320 million, to create a new European leisure airline in a joint venture (JV) with German travel company (TUI) Group (TUG).
On December 15, the Lufthansa Group took over 100% of SN Airholding, the parent company of Brussels Airlines (DAT)/(EBA), in a deal to fully integrate the Belgian carrier into Lufthansa (DLH)’s Eurowings (EWG) Group in 2018.
Airberlin (BER) reported a 3rd-quarter loss of -€45.6 million, reversed from a +€56.2 million profit in the year-ago period.
News Item A-3: "Lufthansa & Etihad: From Enemies to Partners" by Karen Walker Karen.firstname.lastname@example.org in (ATW) Editor's Blog, December 16, 2016.
Lufthansa (DLH) and Etihad (EHD), in the past, have fought over airberlin (BER) code share rights, specifically and more broadly over Gulf carrier growth and subsidy allegations. Today, the 2 became business partners, completing a code share and wet-lease agreement that links together Germany’s Lufthansa Group and Abu Dhabi-based Etihad Aviation Group, ironically with airberlin (BER) aircraft at the center of the deal.
Etihad (EHD), which owns a 29% stake in airberlin (BER), has agreed to wet-lease 38 airberlin (BER) Airbus A320 family aircraft to the Lufthansa Group, which will use them to operate routes for 2 of its airline units, Eurowings (EWG) and Austrian Airlines (AUL). The agreement is particularly important for low cost carrier (LCC) (EWG), which (DLH) is looking to grow more rapidly.
Meanwhile, (DLH) will place its LH code on Etihad Airways (EHD)’s 2x-daily flights between the 2 airlines’ respective home hubs of Abu Dhabi and Frankfurt, and on 2x-daily Abu Dhabi - Munich services. (EHD) will put its EY code on (DLH)’s flights from Frankfurt to Rio de Janeiro and Bogota.
Both elements of the partnering arrangement are subject to regulatory approval, but if accomplished, it will be the latest example of a legacy flagship and a Gulf carrier becoming "dance partners." British Airways (BAB) parent the (IAG) was the icebreaker; (IAG) (CEO) Willie Walsh and Qatar Airways (QTA) Group (CEO) Akbar Al Baker forged a deal that made (QTA) a stakeholder in the (IAG) (a stake later increased to 20%). Walsh was also instrumental in getting (QTA) into the Oneworld (ONW) Alliance (joining Oneworld (ONW) Alliance Founder member (BAB) and also, oddly enough, airberlin (BER)). Qatar Airways (QTA) is now also taking a 10% stake in the (LATAM) Airlines Group (LAN)/(TPR).
Some accused Qantas (QAN) (CEO) Alan Joyce of doing a deal in 2013 with the devil when he signed a 10-year global partnership with Emirates (EAD), the largest of the “big 3” Gulf carriers. Although no investment stake was involved, the deal permitted extensive coordination and allowed (QAN), the Australian flagship to cut back its own European flights and connect to Emirates (EAD)’s broad European network, even shifting its European connecting hub from Singapore to Dubai. Lucifer has been lucrative; restructuring and partnerships have helped Qantas (QAN) climb from A$2.8 billion/$2.1 billion net loss in its fiscal year through June 2014 to a record profit of A$1 billion for the 2015/2016 fiscal year (the best result in its 95-year history).
Now we have Lufthansa (DLH) and Etihad (EHD) in a "dance," with the Group (CEO)s of each replacing subsidy barbs with hints of a greater future together. “We are looking forward to partnering with the Etihad Aviation Group,” Lufthansa Group Chairman & (CEO) Carsten Spohr said. “We will consider extending our cooperation in other areas.”
Etihad Aviation Group President & (CEO) James Hogan responded, “This new relationship with Lufthansa (DLH) marks the next step in our commitment to the leading European aviation group.” Perhaps it’s simply a case of 2 smart businessmen realizing they are better off working together than fighting in an industry environment that gets only more challenging. Hogan has often noted that (EHD)’s 2 biggest competitors are those in his backyard. Emirates (EAD) and Qatar Airways (QTA) have become stronger competitors through their partnerships with legacy and other carriers. The Lufthansa Group, though performing well, is still in cost restructuring catch-up mode relative to the (IAG); and both airberlin (BER) and Eurowings (EWG) are loss-making. The new partnership could yield returns across each group’s portfolios and make them more resilient to the competition and economic upheavals in their home markets as well as in the all-important transatlantic market. Most significantly, the Lufthansa (DLH) - Etihad (EHD) tie-up perhaps represents the end of any global attempt to constrain the Gulf carriers by regulatory means. From here on, should the USA majors choose to continue that fight, they’ve probably lost Lufthansa (DLH) as a public supporter. And Air France (AFA), still mired in its own restructuring, seems to believe it can tackle Gulf competition by starting a low-cost, long-haul carrier dedicated to that purpose.
Keep your friends close, and your enemies closer, the saying goes. Abu Dhabi-German relations have transformed, perhaps by necessity, from chilly to sunny-warm. Let’s see what can be achieved when you quit fighting and start working on how to better compete with your enemy’s enemy.
News Item A-4: Lufthansa Group low-cost (LCC) subsidiary, Eurowings (EWG) and German public services trade union Verdi have reached a labor agreement for cabin crews (CA)s on December 2. According to the agreement, flight attendants (CA) will see a +2.5% wage increase backdated from October 1, 2016; a further +2.5% increase October 1, 2017; and another +1.25% increase October 1, 2018.
Eurowings (EWG) cabin chiefs (Chefs de Cabine) will now be managed as pursers and will be compensated based on a separate purser (wages tariff) table, which will see increase of +5% as of October 1, 2016; +2.5% as of October 1, 2017; and +1.25% as of October 1, 2018.
The collective agreement expires March 31, 2019.
The Dusseldorf-based Eurowings (EWG) will also offer this deal to the (UFO) flight attendant (CA) union. “With this financial statement, we have gone to the limits of what is economically justified in a difficult market environment. The agreement is an important milestone on the way to the solution of the tariff conflicts in the (EWG) cabin,” Managing Director Jörg Beißel said.
On November 1, it was reported that (EwWG) flight attendants (CA), represented by the (UFO) union, had postponed a 2-day strike even though the latest negotiations failed to reach an agreement. Previously, (EWG) flight attendants (CA) went on a 24-hour strike October 27, resulting in 393 flight cancellations out of 551 scheduled flights for the day, affecting 40,000 passengers.
Lufthansa (DLH) established (EWG) as a pan-European (LCC) platform, which is expected to grow to 100 aircraft, as competition from (LCC)s (such UK’s easyJet (EZY), Ireland’s Ryanair (RYR) and Spain’s Vueling (VUZ)) increases to a 50% market share in Europe.
News Item A-5: "German Pilots' Union Says to Resume Talks with Lufthansa" by Maria Sheahan, "Reuters" December 09, 2016.
German pilots' union Vereinigung Cockpit said it would resume wage talks with Lufthansa (DLH) and would hold off further strikes until the end of negotiations. It said on December 9th it would discuss options including mediation in these talks.
The union is currently reviewing (DLH)'s latest pay offer, which came after 6 days of strikes last month that cost the (DLH), the German flagship carrier EUR100 million/US$106 million in lost profit.
News Item A-6: "Lufthansa, Pilot Union Agree to Arbitration" by (ATW) Kurt Hofmann email@example.com, December 16, 2016.
Lufthansa (DLH) and the Vereinigung Cockpit (VC) pilot (FC) union have agreed to arbitration by the end of January 2017, in an effort to resolve a pay dispute that has resulted in repeated strikes. The
(VC) union has agreed to maintain industrial peace until then.
On December 13, it was reported that the latest round of (VC) pilot strikes will affect Lufthansa Group earnings by €100 million/$106 million in the 4th quarter. In November, (VC) called members to go on strike for 6 days, forcing Lufthansa (DLH) to cancel 4,500 flights, affecting more than half a million passengers.
According to a December 16 statement from Lufthansa (DLH), the parties have not publicly identified the mediator. “We have had some intense talks over the past months and have now succeeded in agreeing on arbitration for the collective wage agreement. The negotiating table is the only place where we can find solutions that offer prospects for employees and for the company,” (DLH) Head of Human Resources & Legal Affairs Bettina Volkens said.
“I am confident that we will be able to develop a fair solution with the assistance of a mediator. We want to arrive at a long-term industrial peace in cooperation with (VC) (for our customers, our employees and our shareholders),” Volkens said.
News Item A-7: The Competition Commission of Singapore (CCS) has approved a proposed joint venture (JV) between Lufthansa (DLH) and Singapore Airlines (SIA), subject to certain voluntary conditions.
On February 5, (DLH) and (SIA) sought permission to cooperate on routes between the Asia-Pacific region (Australia, Indonesia, Malaysia and Singapore) and Europe (Austria, Belgium, Germany and Switzerland).
The (CCS) said the 2 airlines were looking for clearance to work together on pricing, inventory management, sales and marketing. They also asked to coordinate schedules, capacity and revenues on services from Singapore to Frankfurt, Düsseldorf, Munich and Zurich. However, (DLH) and (SIA) hold 80% of the Singapore - Frankfurt and Singapore - Zurich market, so the (CCS) said price and capacity coordination on these routes “would raise competition concerns.” The (CCS) was particularly worried about capacity reductions and fare increases, should the (JV) be approved.
The 2 airlines offered to maintain and increase capacity on both routes and carry a minimum number of Singapore passengers. An independent auditor will also be appointed to monitor compliance with the conditions. “The (CCS) is of the view that the competition concerns identified by the (CCS) on these 2 routes will be addressed with these commitments, and the proposed (JV) will result in net economic benefits to Singapore,” the regulator said, approving the (JV).
January 2017: MD-11F (48805, D-ALCM) ferried Buenos Aires (EZE) to Victorville for storage after repairs.
March 2017: News Item A-1: The Lufthansa Group turned in a net profit of +€1.78 billion/+$1.90 billion in 2016, up +4.6% on the previous year’s figure of +€1.70 billion, the Germany-based organization said March 16. It achieved the profit on turnover down -1.2% at €31.6 billion. “In a very demanding market environment, we successfully kept the Lufthansa Group’s margins at their record prior-year levels, through consistent capacity and steering measures and, above all, through our effective cost reductions,” Chairman of the executive board and (CEO) of Deutsche Lufthansa (DLH) Carsten Spohr said.
“All our business segments developed positively in their respective markets. And by expanding our commercial joint ventures for the network airlines, fully acquiring Brussels Airlines (DBA)/(EAT) and concluding the comprehensive wet-lease agreement with airberlin (BER) we have also strengthened our strategic position.” He cautioned, however, that further cost reductions would be necessary in 2017: “This is the only way to meet and master the decline in unit revenues and higher fuel expenses.”
Among cost-saving measures introduced in 2016 was a move to a new pension system that added +€652 million to the (EBIT) figure.
“The change in the pension system for our cabin crews (CA), which we now also agreed with our cockpit crews (FC), has had a sustainable positive effect, strengthening our balance sheet and making us less dependent on volatile interest rate developments,” Deutsche Lufthansa (CFO) Ulrik Svensson said. “This shows how important it is to have viable and forward-looking collective labor agreements.”
Among debits on the balance sheet for the past year was €100 million in strike costs. Net profit figures for the individual components of the Group were not given, but Lufthansa Passenger Airlines (DLH) raised its adjusted (EBIT) by +€254 million to >€1.1 billion. Austrian Airlines (AUL) was also in the black with an adjusted (EBIT) of €58 million, a +€6 million improvement on 2015.
SWISS (CSR) remained the Group’s most profitable airline with an adjusted (EBIT) margin of 9.3% and an adjusted (EBIT) of SFr429 million/$430 million compared to SFr453 million last time. Low-cost carrier (LCC) Eurowings (EWG) reported an adjusted (EBIT) of €-91 million. More than half of that deficit could be attributed to startup costs and other non-recurring expenditures, the Group said.
Also in the red was Lufthansa Cargo (LUB), which recorded a -€50 million loss for the year. The sharp -€124 million decline compared to its 2015 result was largely because of significant falls in price levels, particularly in the face of massive overcapacity in the freight sector.
On the ground, Lufthansa Technik (DLH)/(LTK) reported an adjusted (EBIT) of €411 million for 2016 (down -€43 million on 2015), while caterer (LSG) achieved an adjusted (EBIT) of €104 million (up +€5 million).
In 2017, the Group’s passenger airlines are expected to record organic capacity growth of +4.5% for its passenger airlines. Brussels Airlines (DBA)/(EBA), whose results will be fully consolidated for the 1st time in 2017, and the wet-leased flights of airberlin (BER), should make a small positive contribution to earnings in their 1st year.
News Item A-2: Lufthansa (DLH), Lufthansa Cargo (LUB) and Germanwings (EFG) have reached a deal with the Vereinigung Cockpit pilot union (VC) on all collective bargaining agreements concerning wages, productivity, transitional payments and pensions, in a contract that runs through June 2022.
Talks between (DLH) and (VC) have been ongoing since 2014 and have resulted in 14 pilot (FC) strikes that cost the German airline group €500 million/$532 million). According to (DLH), the recommendation developed in February by mediator Gunter Pleuger for the collective wage agreement formed 1 part of the considerations. But the new agreement has made a formal acceptance of the arbitration recommendations unnecessary. Likewise, (DLH) said it will not be pursuing a previously announced plan to staff 40 newly acquired aircraft outside the group-wide collective bargaining agreement (KTV).
Details of the various collective bargaining agreements will be worked out over the next few months. According to (DLH), the agreement provides a 1-off balance-sheet reduction through the conversion of the pension schemes. In return for the cost-reducing elements of the agreement, 325 aircraft will be crewed in the current (KTV) flight operations in stages by 2022. “This will make it possible for (DLH) to hire trainee pilots (FC) again in the coming years and create career prospects for pilots (FC) with a large number of positions for prospective captains. A reciprocal agreement to refrain from industrial action for the duration of the talks has already been reached, and is set to be formalized in a collective bargaining agreement that will last until 2022.”
Deutsche Lufthansa (DLH) Head of Legal Affairs & Human Resources Bettina Volkens said, “With this declaration of intent, we have finally reached a breakthrough. The path is now clear for a comprehensive settlement with Vereinigung Cockpit on all unresolved collective bargaining issues. This is not only the end of the longest collective bargaining dispute in our company’s history (it also creates a sustainable deal that will last until 2022 and, at the same time, lays the foundation for a new social partnership with the Vereinigung Cockpit).”
The agreement is subject to board approval and a (VC) ballot.
April 2017: Germany-based AeroLogic (AGC), a joint venture of Lufthansa Cargo (LUB) and DHL Express, has appointed Josef Moser as (COO) & Accountable Manager at (AGC) from May 1. Moser is former Head of Flight operations & Crew Training.
At the same time, Wolfgang Raebiger, previously Captain and Head of Fleet at Lufthansa Cargo (LUB), will take over as new (CFO) in the senior management at AeroLogic (AGC).
AeroLogic (AGC)'s previous Managing Director Ulf Weber will be leaving (AGC) at his own request April 30 to pursue a new challenge.
Markus Niedermeyer, who was also part of the management as authorized officer, will remain his role as Head of Administration for several months in order to ensure a smooth transition, before taking over a new management position at Lufthansa Cargo (LUB).
AeroLogic (AGC) operates a fleet of 8 Boeing 777Fs.
October 2017: News Item A-1: "Lufthansa, Pilots' Union Bring End to Strikes with Signing of Labor Deal" by Victoria Bryan, "Reuters" October 10, 2017.
Lufthansa (DLH) and its main pilots (FC)'s union put an end to years of wrangling over pay, pensions and conditions on October 10, signing a wide-ranging agreement which is expected to reduce staff costs and boost (DLH)'s profits this year.
The signing of the deal, which is valid until 2022 and therefore rules out strikes before then, boosted shares in Lufthansa (DLH), sending them up +3.5% to a fresh 16-year high of 24.92 euros.
(DLH) has been trying to bring down costs to better compete with leaner rivals on both short and long-haul routes. But its efforts to overhaul its labor agreement with the Vereinigung Cockpit union, which represents about 5,400 pilots (FC) at its Lufthansa (DLH), Germanwings (RFG) and Cargo subsidiaries, had led to repeated strikes over the last few years.
The 2 sides came to a framework agreement in March but the exact details required further work. The collective labor agreement will now be put to union members for a vote, a process which is expected to take until mid-December.
The deal includes a shift from a defined benefit to a defined contribution pension scheme, more flexible working hours and aims to increase the average retirement age of pilots (FC).
It will bring (DLH)'s cockpit staff costs down by -15% and reduce pension liabilities this year by a high 3-digit million euro amount, while earnings before interest and tax will be increased by a significant 3-digit million euro amount. "Better cost structures, especially on short-haul routes, will improve the market position of (DLH)," Vereiniung Cockpit board member Joerg Handwerg said.
In exchange (DLH) said at least 325 of its planes will be flown by pilots (FC) under the new German collective agreement and therefore means it will start hiring junior pilots (FC) again.
Pilots (FC) at (DLH), Lufthansa Cargo (LUB),and Germanwings (RFG) will receive pay increases in stages totaling 10.3%, plus a 1-off payment of up to 1.8x their monthly salary, for the period from May 2012, when the last collective labor deal expired, until June 2022.
"This compromise opens up career prospects for our pilots (FC) and makes an important contribution to the competitiveness of our company," (DLH) personnel Head Bettina Volkens said.
News Item A-2: SEE VIDEO ON "(DLH) 777F Frankfurt to Tokyo."
Click below for photos:
LUB-777F - 2016-02.jpg
LUB-777F 1ST - 2013-10
LUB-777F 2ND - 2013-11
LUB-MD-11F D-ALCK 2018-02.jpg
0 747-2D3BF (296-21251, N505MC), (TLS) WET-LSD 2001-07. RTND. FREIGHTER.
0 747-230F (SCD) (CF6-50E2) (347-21592, /78 D-ABYO "AMERICA;" 538-22668, /81 D-ABYU "ASIA;" 625-23348, /85 D-ABZB "NEW YORK;" 660-23621, /86 D-ABZF "AFRICA;" 706-24138, /88 D-ABZI "SHANGHAI"), SCD, (CDF) LSD, MAINT BY AMECO (BEJ). 23621 STORED AT MARANA 2002-12. 23348; 23621; 24138; ST (AID) 2003-09 & WET-LSD BACK "AS NEEDED." 21592; & 22668; ST FINREP LSG 2004-08, LST (OCE). LAST 2 WITHDRAWN FROM SERVICE. FREIGHTER.
0 747-230SF (CF6-50E2) (614-23286, /85 D-ABYZ; 617-23287, /85 D-ABZA; 633-23393, /86 D-ABZC), (CDF) LSD, B CONV TO SF, MAINT BY AMECO (DLH). (22671; 22363; ST (SOF) 2000-06. 23286; 23287; 23393; WFU IN STORAGE 2005-01. 23286; 23287; ST (EVR) 2005-06. 23286; & 23393 TO (AID) 2005-06. FREIGHTER.
0 747-4B3BC (CF6-80C2B1F) (864-24155, /91 F-GEXB), BF (AFA) BY DEUCALION AVIATION 2008-02 FOR CONV BY (IAI) TO F FOR "AEROLOGIC" (AGC) OPS. (DVB) BANK LSD. 6 RETURNED. FREIGHTER.
5 +5/5 ORDERS 777-200F (D-ALFA, - - SEE PHOTO - - "LUB-777F 1ST - 2013-10," D-ALFB, 2013-11 - - SEE PHOTO - - "LUB-777F 2ND - 2013-11"), (DVB) BANK LSD. FOR AEROLOGIC (AGC) OPS. FREIGHTER.
1 777FBT (41677, D-ALFD), 2014-06. FREIGHTER.
2 MD-11F (CF6-80C2D1F) (488-48413, /92 D-ALCO, 2005-07; 491-48414, /92 D-ALCP), EX-(VAR), BF (MIU), (TBC) CONV TO F AT SASCO. 48414; WFU STORED AT VICTORVILLE 2010-01. 48414; 48414 RETURNED TO SERVICE 2010-10. FREIGHTER.
2 MD-11F (CF6-80) (534-48431, /93 D-ALCQ, 2004-03 - - CRASHED & W/O IN JULY 2010 ACCDT;" 565-48581, /94 D-ALCR 2004-04; 567-48630, /94 D-ALCS, 2004-05), BF (ALI), CONV TO F. FREIGHTER.
12 MD-11F (CF6-80C2D1F) (625-48781, /98 D-ALCA; 626-48782, /98 D-ALCB; 627-48783, /98 D-ALCC "KARL-ULRICH GARNADT;" 628-48784, /98 D-ALCD "MICHAEL OTTO;" 629-48785, /98 D-ALCE), 1 LST (SAS) 1999-04, (637-48798, /99 D-ALCF; 639-48799, /99 D-ALCG; 640-48801, /99 D-ALCH "BUENOS DIAS MEXICO;" 641-48800, /99 D-ALCI; 642-48802, /00 D-ALCJ; 643-48803, /00 D-ALCK; 644-48804, /00 D-ALCL; 645-48805, /01 D-ALCM; 646-48806, /01 D-ALCN), MAINT BY (FIN). 2 OF 4 PARKED MD-11F'S REACTIVATED 2010-06. 48805, STORED AT VICTORVILLE AFTER REPAIRS 2017-01. FREIGHTER.
1 A300B4-605RF (701).
0 ORDERS TU-204-120C, MAINT BY LUFTHANSA TECHNIK (LTK) (DLH), CANCELED 8.
Click below for photos:
LUB-1-KARL ULRICH GARNADT - 2014-08
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PETER GERBER, CHAIRMAN OF THE EXECUTIVE BOARD & CHIEF EXECUTIVE OFFICER (CEO) LUFTHANSA CARGO (LUB) (2015-02).
Peter has been responsible for finance and Human Resources (HR) on the executive board of Lufthansa Cargo AG (LUB) since 2009.
STEFAN LAUER, CHAIRMAN SUPERVISORY BOARD (LUB) (2006-03).
KARL ULRICH GARNADT, CHAIRMAN & (CEO) OF LUFTHANSA GERMAN AIRLINES (2014-05), LUFTHANSA CARGO AG (LUB) (2011-01), HEAD LUFTHANSA GROUP INFRASTRUCTURE, RESPONSIBLE FOR AIRPORT & AIR TRAFFIC CONTROL (ATC) CHARGES FOR THE LUFTHANSA GROUP.
Karl Ulrich Garnadt was born on 1957. He began his career at Lufthansa (DLH) in 1979. In 2011, he became (CEO) & Chairman of Lufthansa Cargo AG. Since May 1, 2014, he has been a Member of the Executive Board of Deutsche Lufthansa AG and (CEO) of Lufthansa German Airlines.
FRANZ-JOSEPH MILLER, (CEO) TIME:MATTERS.
SOREN STARK, EXECUTIVE BOARD MEMBER OPERATIONS (2016-04).
Sören, an industrial engineer, is currently in charge of Aircraft Maintenance at Lufthansa Technik (DLH) (LTK) and succeeded Karl-Rudolf Rupprecht, who retired at the end of March, 2016.
MARTIN SCHMITT, CHIEF FINANCIAL OFFICER (CFO).
DR ANDREAS OTTO, EXECUTIVE BOARD MEMBER PRODUCT & SALES (2000-04).
Andreas was born in Mettmann on the October 9th, 1962. In 1991, he obtained a degree in business administration. Three years later, he was awarded a doctorate in political sciences. In the same year, Andreas joined Rhenus (AG & Co KG) in Dortmund as Project Manager Logistics. In 1996 he was appointed Managing Director of Rhenus Office Systems GmbH, and two years later, he was promoted to the position of Senior VP Sales at Rhenus AG. In 1999, he joined the Executive Board of Rhenus AG with responsibility for Marketing & Sales. The Supervisory Board of Lufthansa Cargo AG (LUB) appointed Andreas to the Executive Board of Lufthansa Cargo AG with effect from April 1st, 2000. His contract was extended on August 31 2007 for another 5 years. Andreas is a member of the Supervisory Board of (RWE) Rhein-Ruhr AG, the Internet company AxIT AG, as well as of TRAXON GmbH, Jade Cargo International (JDC) and LifeConEx.
Andreas is married and has 1 son.
BERNHARD KINDELBACHER, SENIOR VP STRATEGY SUBSIDIARIES & BUSINESS DEVELOPMENT.
DR ROLAND SCHUTZ, VP & CHIEF INFORMATION OFFICER (CIO).
THOMAS SONNTAG, VP PROCUREMENT & INFRASTRUCTURE.
ALEXANDER PLUMACHER, MANAGING DIRECTOR, JETTRAINER GMBH (2008-04).
Alexander Plümacher worked most recently as a private equity manager at Arques Industries. After studying business management, he started his professional career in 1998 with Bertelsmann AG where, as a member of the management of AZ Bertelsmann Schweiz GmbH, in his last position he was responsible for a business field of his own. In 2000, Alexander, as a co-founder became a member of the Executive Board of the Internet start-up yoolia AG. His career subsequently took him, as senior head of department to the “Berliner Stadtreinigungsbetriebe AöR,” where he was responsible for business planning and the equity stakes management.
Jettrainer GmbH, with its offices in Raunheim, was founded in 2003 and is today the leading provider worldwide for loading material management in air traffic. The company manages a fleet of 65,000 containers and pallets at 500 stations all over the world. Its customers, in addition to Lufthansa Cargo (LUB), include Swiss (CSR) WorldCargo, US Airways (AMW)/(USA), United Airlines (UAL), Condor (CDF), Air Astana (AKZ), and Air One (ADH). (LUB) holds 67% of the company’s shares, with the remaining 33% being held by TrenStar Inc.
KAY KRATKY, GENERAL MANAGER, JADE CARGO INTERNATIONAL (JDC) (2007-12).
CAPTAIN WERNER KNORR, GENERAL MANAGER FLIGHT OPERATIONS (FRAFOLH) (firstname.lastname@example.org).
CAPTAIN S REHMENN, CHIEF PILOT.
JOHANNES-HEINRICH IRLE, MANAGING DIRECTOR TECHNICAL.
MATTHIAS EBERLE, HEAD CORPORATE COMMUNICATIONS (2011-12).
HANS-PETER BAUER, GENERAL MANAGER TECHNICAL.
WERNER ROTHENBAECHER, GENERAL MANAGER TECHNICAL OPERATIONS (FRATFLH) (email@example.com) (1996-10).
CLAUS RICHTER, HEAD OF TRANSPORT MANAGEMENT & FLIGHT OPERATIONS, EX-(DLH) (2007-12).
ROLAND SCHUETZE, HEAD, WORLDWIDE SALES (2004-02).
PETER PULLEM, HEAD GERMANY, EUROPE & AFRICA SALES (2004-01).
ERWIN OBLADEN, HEAD, ASIAN SALES (2004-02).
MONIKA HOUCK, HEAD GLOBAL SALES & CUSTOMER RELATIONS.
DIETER VRANCKS, REGIONAL DIRECTOR USA, MIDWEST & CANADA (2010-08).
R MUSYAL, MANAGER AIRCRAFT ENGINEERING.
J SANCHEZ-MAROTO, MANAGER ENGINEERING & FLEET OPERATIONS (FRATFLH) (firstname.lastname@example.org).
DR MOHAMMED SEIRAFFI, MANAGER HANDLING GERMANY (2008-04).
As of 7 April, Dr Mohammed Seiraffi took the newly-created function of Manager Handling Germany and thus is responsible for freight handling at all German stations with the exception of Frankfurt. He is based in Leipzig. On behalf of the Executive Board, Mohammed is also responsible for the strategic development of the Munich and Leipzig hubs. In Leipzig, in addition, he handles the coordination tasks with respect to AeroLogic (AGC). The freight airline AeroLogic (AGC) is a joint venture of DHL Express and Lufthansa Cargo (LUB). (AGC) will start operations in April 2009 from Leipzig/Halle airport.