Asian weakness drags down Lufthansa Cargo profits

0
115

Profits in Lufthansa’s logistics business segment slumped by almost 90% in the first half of 2019 due to weakness on routes to Asia.

Profits measured in adjusted earnings before interest and tax (EBIT) was down 88% to €15 million.

In the second quarter of 2019, the segment fell into a loss of €9 million compared to €55 million in the same period of 2018.

First half revenue declined 5% to €1.2 billion and the second quarter dipped 6% to €622 million due to pricing and volumes falling, especially on routes between Europe and Asia.

Load factors were down 6.1 percentage points in the first half of 2019 to 61.1% and by 5.3 percentage points to 59.7% in the second quarter.

The freighter fleet is being upgraded with two new Boeing 777 Freighters for Lufthansa Cargo in the spring, and one for AeroLogic.

In response to weaker market demand, Lufthansa Cargo is reducing the use of MD-11Fs, with two due to retire by the end of the year.

Other highlights for the year include Lufthansa Cargo extending its cooperation with Cathay Pacific on route between Europe and Hong Kong.

A new subsidiary called heyworld offering tailored solutions for the fast-growing e-commerce business.

Lufthansa Group says the outlook for the logistics segment with Lufthansa Cargo is a full-year margin of 3-5%, dependent on demand stabilising in the fourth quarter.