Lufthansa Cargo Seeks 10 Percent Job Cuts

Lufthansa Cargo plans to reduce its workforce by 10 percent in 2010 as it cuts freighter flights in response to the slump in the global air cargo market.

Europe's second largest scheduled cargo airline said it will trim around 450 jobs worldwide entirely through voluntary early retirement, severance schemes and part time work.

The planned job cuts follow steep declines in freight revenue and traffic in 2009 which pushed Lufthansa Cargo $300 million into the red in the first nine months of the year from a $240 million profit in the same period in 2008.

The air cargo market recovered toward the end of 2009, but Lufthansa Cargo is expected to book a fourth quarter loss when parent company Lufthansa publishes its full year figures on March 11.

Lufthansa Cargo boosted freight traffic by 18.6 percent in January from a year ago to 114,000 metric tons on surging Asian shipments to Europe even as it reduced the number of freighter flights by a quarter.

But Lufthansa Cargo executive Peter Gerber, who revealed the job cuts, said the crisis in the cargo market is "not yet over.” The air cargo industry has lost four years of growth due to the global economic downturn and it will take time to return to traffic levels of 2007 or 2008.

Lufthansa Cargo reportedly plans to raise freight rates by 10 percent from March 1 following increases of 20 to 25 percent in October that still left rates below 2008 levels.

The carrier announced earlier that it will reduce short time working for 2,600 employees from 25 percent to 20 percent at the end of February.

Contact Bruce Barnard at brucebarnard47@hotmail.com.