Bruce Barnard, Special Correspondent | Mar 15, 2012 12:07PM EDT
Lufthansa Cargo’s operating earnings fell to $326 million in 2011 from a record $406 million in 2010, but it was the German airline’s second-best performance, achieved in the face of slumping Chinese traffic, surging fuel costs and a night flight ban at its Frankfurt hub.
The all-cargo carrier said it expects “slightly higher” revenue and another operating profit in the three-digit-million range this year. It forecast a faster increase in revenue and a comparable profit for 2013.
Lufthansa Cargo contributed almost a third of parent Lufthansa’s $1 billion operating profit, though it accounted for just over 10 percent of group revenue.
Total revenue increased 5.3 percent to $3.85 billion, including 7.1 percent growth in traffic revenue to $3.67 billion, driven by higher sales and increased rates.
Traffic was up 5 percent to 1.89 million tons, and sales were 6.5 percent higher on 8.6 percent more capacity, which trimmed the load factor by 1.4 percentage points to 69.5 percent.
North America was the best performing market, driving a 10 percent increase in Americas volume to 578,000 tons and a 22.7 percent surge in revenue to $1.4 billion as Lufthansa switched capacity from Asia to the region.
Asia-Pacific traffic grew 3 percent to 530,000 tons, but revenue slipped 4.6 percent to $1.7 billion.
Lufthansa Cargo said the sudden ban on night flights at Frankfurt, which came into effect at the end of October, severely disrupted its operations in the fourth quarter. It had to switch its 69 weekly flights to other slots and other airports, and canceled some services.
The ban, which is currently being reviewed by Germany’s administrative court, will cost around $54 million a year, according to Lufthansa.
“A final decision on long-term investment, including a new logistics center, will therefore only be taken once the number of permitted night flights in Frankfurt has been legally settled,” the airline said.
Lufthansa said it plans to keep capacity this year “more or less stable” to support load factors and average yields in a challenging environment.
Contact Bruce Barnard at brucebarnard47@hotmail.com.
