Lufthansa Cargo Eyes 2010 Profit

Lufthansa Cargo could return to operating profit in 2010 after a record loss in 2009 if the steep increase in freight volume in the opening months continues through the year, the airline said.

Europe’s largest air cargo airline also said it will suspend short time work for ground staff during April and May and will end it permanently in September “should the upturn continue.” Short time work was introduced in March 2009.

“Ongoing market developments are giving rise to a degree of optimism for 2010,” said Lufthansa Cargo chairman and CEO Carsten Spohr.

“The crisis has bottomed out and demand is rising steeply. We are experiencing a marked upswing, especially in Asia,” Spohr said.

Earlier in the month when it announced a record $234 million operating loss in 2009, Lufthansa Cargo had said it was aiming to return to profit by 2011 at the latest.

“If the dynamics of the market continue, then we could already reach that target in 2010,” Spohr said at the company’s annual press conference.

Lufthansa carried 9 percent more cargo in February than a year ago following an 18.6 percent year-on-year increase in January.

Lufthansa Cargo said it is preparing to re-activate two of its four idled MD-11 freighters in response to growing cargo demand and can bring back the other two at short notice.

“Our goal is to eventually fly with a full fleet of 19 [MD-11] planes again,” Spohr said.

The carrier stressed it would continue to pursue cost savings.” Discontinuation of short time [work] does not mean that the company is abandoning its rigorous savings policy,” said Peter Gerber, Board member Finance and Human Resources.

“The air freight industry has lost four years of growth in the crisis. Cost discipline will, therefore, remain essential for success in the present year,” Gerber said.

Lufthansa Cargo plans to cut unit costs by 10 percent by trimming its payroll and improving processes, Gerber said.

“At the same time, Lufthansa Cargo will be seeking to raise earnings by a minimum of 20 percent,” he added.

The airline recently announced it will cut its worldwide staff by 10 percent, or some 450 jobs.

Contact Bruce Barnard at brucebarnard47@hotmail.com.