Lufthansa Cargo Profit Slumps 60 Percent

Lufthansa Cargo’s operating profit slumped nearly 60 percent in the second quarter to 28 million euros ($34.4 million) from 69 million euros ($84.9 million) a year ago on higher fuel prices, weaker demand and a night flight ban at its Frankfurt airport hub.

But the German all-cargo carrier said it’s still expecting to post a profit in the three-figure million-euro range for the full financial year.

Revenue shrank 9.3 percent in the quarter to $849 million, tracking a 9.1 percent decline in freight volume to 439,000 metric tons. Capacity was down 7.1 percent from a year ago and the load factor eased by 0.9 percentage points to 67.4 percent.

Lufthansa remains one of the most profitable airfreight carriers in a weak global market even as its first half profit dived to $57.8 million from $163.6 million in the same period in 2011. First half revenue was down 10 percent at $1.7 billion and traffic declined 9.2 percent to 864,000 tons.

The airline grew its network – adding flights to Chongquing, China, Detroit and Montevideo this year - without adding capacity by reducing frequencies on individual routes.

Although the market environment remains challenging Lufthansa Cargo said it remains “cautiously optimistic” about the remainder of the year based on “flexible, demand-oriented capacity management and ongoing strict cost control.”

A slight upswing in demand is expected towards the end of the year at the earliest, the carrier said.

The parent Lufthansa group grew second quarter profit by almost 28 percent to $444 million on a 6.4 percent increase in revenue to $9.7 billion. Net income fell 24 percent to $281.7 million.