Lufthansa Cargo’s operating profit in 2012 sank 58 percent from the previous year to 104 million euros ($135 million), but it was one of the few freight airlines to remain in the black in a market plagued by rising supply and declining demand.
And the German carrier, which booked a profit in every quarter last year as it slashed freighter capacity and cut costs in response to softening demand, said it expect earnings to increase in 2013 followed by an “increasingly positive” performance in 2014.
The 2012 profit has taken Lufthansa Cargo’s cumulative profit for the past three years to $862 million.
Sales in 2012 were 8.7 percent lower at $3.5 billion as traffic dipped 8.5 percent to 1.72 million metric tons. Capacity was trimmed 8.2 percent from a year ago, outpacing an 8 percent drop in revenue that boosted the load factor by 0.1 percentage points to 69.6 percent.
The Asia-Pacific region saw the steepest decline in tonnage of 12.2 percent to 466,000 tons and capacity, which was cut 13 percent. Traffic out of China stabilized toward the end of the year, but other Asian markets deteriorated, especially Japan.
America traffic declined 10 percent to 520,000 tons, but sales dipped 6.5 percent, as capacity was shifted to the more buoyant South American market.
The night flight ban at Lufthansa Cargo’s Frankfurt hub that was imposed in October 2011 and confirmed by a court in April 2012 had a “tangible adverse effect” on its business and will depress earnings by a mid-two-digit million euros figure every year from now.
The carrier, which operates a fleet of 18 MD-11 freighters, expects demand to recover noticeably and tonnage to start rising again at the latest in the second half of the year.
Lufthansa Cargo said it has yet to decide whether to deploy two of five Boeing 777 freighters on order that are scheduled to join its fleet in late 2013 as additional or replacement aircraft.