Lufthansa, DHL Launch Joint Cargo Airline

Lufthansa Cargo and DHL Express gave downbeat assessments of prospects for the global air cargo market June 19 as they officially launched their joint cargo airline, AeroLogic.

The new carrier will start service on June 29 with a Boeing 777 freighter flying from its hub at Leipzig airport in Eastern Germany to Asia.

"Our business is an early indicator, but we have no backlog, so I cannot say how things will develop," Deutsche Post DHL chief executive Frank Appel said at an inauguration ceremony at Leipzig airport.

"Until April we saw neither improvement nor deterioration so it looks as though the floor of the crisis has been reached," Appel said.

AeroLogic has abandoned its original target of annual revenue of $700 million by 2011 but it still expects to post a profit in 2010.

Appel was more upbeat about the medium term outlook." In light of an inevitably recovering market, the strengthening of vital trade lanes through the cost-efficient shared leasing of the most modern freighter aircraft currently available must be viewed as a smart investment," he said.

AeroLogic will deploy eight leased Boeing 777 freighters, two of which have already been delivered with two more scheduled to follow by the end of the year. The remaining four planes will join the fleet by the end of 2010. The carrier originally intended to operate eleven freighters but scaled back its plans amid tumbling air freight volumes.

Lufthansa Cargo will use the Boeing freighters, which have a maximum payload capacity of 103 tons, on a Leipzig-Tashkent-Hong Kong-Tashkent-Leipzig loop on weekends.

DHL will operate express services on a Leipzig-Bahrain-Singapore-Delhi-Leipzig rotation on weekdays.

AeroLogic plans to offer new direct connections to most of Asia's major metropolitan areas by 2010.

The carrier says its ultimate goal is to rank among the top five European cargo airlines.

"The new airline shows a strong commitment of both partners to extend their services to their customers and to establish a new strong global player in the industry," said Lufthansa chief executive officer Wolfgang Mayrhuber.

Contact Bruce Barnard at brucebarnard47@hotmail.com.