Dollar drag in Europe

Dollar drag in Europe

Copyright 2004, Traffic World, Inc.

The weakening U.S. dollar is dragging down the cargo returns of European airlines.

British Airways World Cargo saw its cargo revenue slip 2.1 percent, taking into account the fall of the dollar, to $829.1 million in the fiscal year ending March 31.

Air France airline saw a 0.2 percent decrease in cargo traffic for the year while capacity increased 1.8 percent. KLM, which is now combined with Air France, saw a marginal increase in cargo revenue of less than 1 percent from 2002 to 2003.

Lufthansa Cargo saw its cargo volume drop by 2.7 percent in 2003 while capacity edged up 0.6 percent.

Discounting the dollar, British Airways reported a strong year for its cargo unit. During the year, BA''s international cargo traffic increased 6 percent. British airways credited the addition of a third wet-leased freighter to its fleet in August 2003 as well as short-haul European freighters in October for the increase. That fleet expansion gave the airline a 4 percent cargo capacity increase over the previous year.

"Our strategic decision to introduce additional freighter capacity in key global markets last year ensured that we are able to respond to the needs of our customers in both high-demand and emerging markets, benefiting the entire logistics chain," BAWC Managing Director Gareth Kirkwood said. "We are confident that we have the right strategy in place to continue to grow the business despite the continuing challenges facing the industry."

So far this year, cargo results have been mixed for the largest European carriers. In March, the most recent month for which data is available from the Association of European Airlines, Air France saw a 1.1 percent year-over-year decrease in its freight traffic. Partner KLM reported a 10.8 percent increase for the same month, carrying slightly less tonnage than did Air France. Lufthansa, which is by far the largest European cargo carrier, saw a 4.4 percent growth in volume for the month. Lufthansa Cargo announced plans earlier this year to reduce the size of its fleet.

British Airways, with its new freighters, reported 20 percent cargo volume growth for the month. That growth brought its cargo volume up to the level KLM carried in March.

All-cargo carrier Cargolux reported growth on par with KLM, with its March volume up 11.5 percent.