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2017 was one of the most successful years ever for Lufthansa Cargo

(C) Typhoonski

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Lufthansa Cargo has erased 2016’s dire numbers from its memory as it announced one of its most successful years to date. Operating profits for the 12 months to December 2017 hit EUR242m – a stark contrast to the EUR50m loss it reported a year ago. Chief executive Peter Gerber said 2017 had developed into one of the “most successful” years in the history of Lufthansa Cargo.

“We have achieved impressive earnings and, in the volatile logistics business, our team demonstrated high professionalism and passionate commitment,” said Mr Gerber. “For the current year, we will therefore remain focused on pursuing our efficiency programme and investing in our future.” Sales, in revenue tonne km (RTKs), rose by 7.4%, far outstripping the 3.3% growth in capacity, with the carrier handling some 1.6m tonnes leading to EUR2.54bn in revenues, up 21.1% on 2016.

However, its RTKs were still some way below industry average, with European sales down 0.4% compared with average industry growth of 11.8%. Operating expenses crept up 6.7% to EUR2.4bn, with the price of fuel representing the biggest increase, up 25.9% to EUR326m. But growing costs were more than written off by the near 600% increase in ebit, while load factor also climbed 2.7% to 69.3%, amid heightened demand and yield increases of 14%.

Mr Gerber told The Loadstar that “clearly” the strong market for air freight played a hand in the carrier’s return to growth, but said there were other factors. “We also underwent a successful restructuring, which took place while the market was down,” said Mr Gerber. “And we had nearly completed this process when the air freight market began to pick up again.” The restructuring included reducing its employee count by some 800 and scrapping two of its MD-11 freighters.

The carrier now operates a fleet of 12 MD-11Fs alongside five B777 freighters, and has plans to alter its fleet composition in the near future. “We intend to bring in new cargo aircraft, but the question is ‘when?’,” Mr Gerber said. “For us it is good that we have these old MD-11 as it leaves us flexible – we can bring in new aircraft and drop the MD-11s if we need to reduce capacity.” When asked about overcapacity, Mr Gerber said he could not foresee a repeat of the start of the decade, which saw the market flooded with capacity causing rates to plummet.

Amid the optimism, chief financial officer Martin Schmitt told The Loadstar the change in the market was “unforeseen” by the industry. “Before the shift, what we had was very definitely a buyer’s market but now – especially after the November and December peaks – we have a seller’s market,” said Mr Schmitt. “It flipped the game in a fairly extreme and unforeseen way.” Mr Gerber highlighted e-commerce as an important avenue for growth, noting that express operations had increased “considerably”.

“It is clear that this sector is strong and growing fast, and we expect to see more e-commerce volumes going forward,” he said. “We are looking to develop a special product that will improve our participation within this sector, and I do believe we will have a result soon.” Neither Mr Gerber nor Mr Schmitt would offer much on the picture for the air freight market in the long term, but both were confident about the next quarter or so. Citing “certain base factors”, Mr Gerber said he was anticipating growth of 3-4% for the next mid-term cycle, while Mr Schmitt said 2018 has started well.

“I cannot say how long we will see growth in the market, but the good times did not stop after Christmas, with IATA positive for the next few months at least,” he added.

“For Lufthansa Cargo, though, the biggest and most important season runs from November to December and this I can’t predict – we will see.”


  1. ^ (theloadstar.co.uk)

Freshport Asia Awarded “Best Perishables Shipping & Logistics Provider Thailand 2018”

Freshport Asia[1], Thailand’s cool care specialists in conjunction with BFS Cargo[2], were recently awarded as the “Best Perishables Shipping & Logistics Provider Thailand 2018” by Acquisition International. The award showcases Freshport Asia’s commitment to helping Thai fresh produce exporters stay competitive and reach overseas markets. Over the past 10 years, the company has handled over 6000 tonnes of cargo, and both educated and assisted shippers in eliminating unnecessary polystyrene in shipments, proving their responsibility to environmentally friendly shipping standards.

Mr. Chris Catto-Smith, Freshport Asia’s Supply Chain Consulting & Solution Development Manager, said: “I’m so incredibly proud of my airport Freshport team led by Chris Reichert. The award showcases our commitment to improving the handling of temperature sensitive cargo in Thailand.

Our companies impeccable record of zero claims or losses is a testament to the hard work the team brings to the table every day. I’m confident in the products and services we provide help to not only reduce shipping costs for temperature-controlled airfreight, but we also help deliver the highest product quality and shelf life at destination. Thanks also must be given to Bangkok Flight Services and all the airlines, shippers, modern trade retailers and freight forwarders who have supported us on this journey.”

Freshport Asia is a leading logistics consultancy company specializing in cool chain. Our core business is operating a specialized airfreight handling service for perishable goods on behalf of BFS Cargo.

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Freshport Asia Awarded “Best Perishables Shipping & Logistics Provider Thailand 2018”

Danny is currently a Contributing Writer for Airfreight Logistics and Logistics Manager (LM) and is quite the foodie. He’s always on the hunt for new and exciting dishes to sample, and is never one to back down from a spicy challenge.

His travels have taken him around the world, and he’s been able to experience many different cultures (and food).

Previous Article[3]

Geodis Launches Online Booking and Pricing for Global Air and Ocean Shipments[4]


  1. ^ Freshport Asia (www.freshport.website)
  2. ^ BFS Cargo (www.bangkokflightservices.com)
  3. ^ Previous Article (airfreight-logistics.com)
  4. ^ Geodis Launches Online Booking and Pricing for Global Air and Ocean Shipments (airfreight-logistics.com)

Strong year for cargo, but Virgin Atlantic still records first loss in four years

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Cargo volumes may have hit a five-year high, but Virgin Atlantic has recorded its first loss in four years. Chief executive Craig Kreeger predicted last year that the carrier would struggle for profit as sterling depreciated against the dollar, and he stuck to that line when reporting the GBP28.4m pre-tax loss. Reports also have him citing an industry-wide problem in accessing Rolls-Royce engine parts for VA’s Boeing 787 fleet and other challenges resulting from hurricane disruption across the Americas.

Despite the weakness reported by the carrier overall, the cargo division managed to ride the e-commerce – and to a lesser extent, pharma – wave that boosted the air freight market last year. Virgin Atlantic Cargo MD Dominic Kennedy said that, while the market was undoubtedly buoyant, there remained “strong competition” for business. “We are delighted with the results we have delivered for the airline, which are a tribute to the outstanding performance of our entire cargo team,” said Mr Kennedy.

“With our prime route network, growing capabilities for specialist products and continued passion for high-quality service, we are well placed to meet sustained demand from our customers.” Cargo revenue was up 9% year on year at GBP199.6m on the back of 230.5m kg in volumes (up 6%) – the carrier citing “strong” westbound business, particularly on its new Heathrow-Seattle route. Africa and India services also saw “strong” volume gains, as did UK-China and UK-US routes, despite exchange rate pressure.

The improvement in its African ventures supported Virgin Atlantic’s decision last week to announce a second daily service between Heathrow and Johannesburg for the end of October. Director of sales Steve Buckerfield said: “Virgin has been serving the Johannesburg market for 22 years and we continue to receive outstanding customer support.

Strong year for cargo, but Virgin Atlantic still records first loss in four years

“2017 was a particularly strong year for both north and southbound cargo volumes, so the addition of a second daily frequency is great news for us and our customers.” The carrier saw Johannesburg export volumes up 4% year on year, with the wider South African market growing 5%.

The new route will be served by a B787-9 with 24-tonnes of capacity. To handle the city’s growing customer base, the carrier said it would open a local contact centre. Regional sales manager Johannesburg Laurn Baldwin said he was confident: “News of this additional capacity could not be coming at a better time and reinforces our commitment to the South African market.”

He added: “Our decision is also based on having listened to the requirements of our customers, who value the presence of a local team. I am confident these positive developments, alongside our commitment to providing great customer service, will help us deliver another fantastic year for cargo.” Meanwhile, Air France-KLM’s plans to buy a 31% stake in the UK carrier, announced in July last year, appear to be nearing completion, requiring just regulatory approval.

The purchase would see the Franco-Dutch carrier become the second biggest shareholder after Delta, which has a 49% stake.

Sir Richard Branson, who founded the airline, will retain a 20% stake and remain as chairman,


  1. ^ (theloadstar.co.uk)

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