Lufthansa, Europe's second-largest airline, on Wednesday reported cargo profits in 2007 were two-thirds higher than in the previous year as sharply higher volumes outweighed tougher competition, weaker freight rates and higher fuel bills.
Lufthansa Cargo, the carrier's independent freight airline, booked a profit of 136 million euros [$208 million] last year against $125 million in 2006.
Cargo traffic rose by 8.6 percent to a record 1.9 million metric tons from 1.76 million tons, consolidating Lufthansa's position as the world's second-largest international scheduled cargo airline after Korean Air.
Revenues declined, however, by 3.8 percent to $4.1 billion, reflecting lower freight rates, especially in Asia, the strong euro and a deliberate reduction of joint services with other carriers, including Cathay Pacific, Korean Air and Air China.
Lufthansa forecast moderate revenue growth in the current year and higher profits in 2009 when Aerologic, a joint air-cargo carrier with DHL Express, starts service, and contributions from its stakes in two Chinese airport cargo terminals and a joint venture airline, Jade Cargo, kick in.
Lufthansa Cargo cautioned global competition is increasing, partly due to the rapidly expanding airlines of the Arabian Gulf, which are flying cargo from the Middle East to North America, via Europe, and partly due to new all-cargo carriers from the former Soviet republics and China.