Close on the heels of announcing fairly positive financial numbers for the first half of 2017, Lufthansa Cargo chief executive and chairman of the executive board Peter Gerber held a press conference in Mumbai to formally announce the launch of additional freighter services to Mumbai. Since July, the airline operates four instead of three freighter flights to Mumbai, the biggest station for Lufthansa Cargo in India.
For Gerber the visit was more than the launch of the additional freighters to Mumbai. For Lufthansa Cargo, India is turning to be an important market and he is confident of maintaining the growth momentum in India. Gerber said that Lufthansa Cargo has 10 percent share of India's international freight traffic and according to him, despite a slow first quarter, the cargo division of German flag carrier is currently seeing 9 percent growth in India. This has almost matched the global industry growth figures and it is much better than the overall 6-7 percent growth Lufthansa Cargo is witnessing globally.
Coming to the just-announced results for the first half of 2017, Lufthansa Cargo reported 18.6 percent increase in revenues year-over-year to €1.15 billion. This is driven by the 5 percent increase in revenue-tonne-kilometers over the same period. Earnings before interest and tax (EBIT) for the first half was €84m, up from a loss of €46m a year earlier and most importantly yields rose 10.3 percent to €0.25.
Elaborating the performance in the Indian market, Frank Naeve, Vice President Asia Pacific for Lufthansa Cargo highlighted the significant factor of increasing yield. “Revenue is growing higher than the 9 percent growth because we are seeing an increase in the value of the shipment we have on the board.”
Lufthansa Cargo currently has a weekly capacity of 435 tonnes out of Mumbai. This is in addition to 40 to 80 tonnes from two freighters that gone to fly to Hyderabad from Mumbai. When asked about the load factor, Zarir Kheshwala, Head of Sales (Mumbai), Lufthansa Cargo said it is “virtually full, load factor is in high 90s”.
Lufthansa Cargo also serves the Indian metros like Bangalore, Chennai and Hyderabad, each with two freighter services a week. This is in addition to the belly cargo capacity of 42 weekly passenger flights between various Indian cities and the hubs in Frankfurt, Munich and Vienna.
To India, Lufthansa Cargo operates MD-11 and B777 freighters. Its passenger fleet that includes Boeing 747 and the latest Airbus A350 offers significant cargo capacity out of key Indian cities.
On the question of Lufthansa Cargo entering into partnership with Indian carriers Gerber said, “We are always looking for partners in very important and interesting markets and India is such a market. We are looking at potential opportunities but for the moment there nothing specific.”
Lufthansa Cargo continues to maintain that India is one of the markets in the world, where “there is so much happening, there is so much development every year and it is something that we are watching very closely”.
Talking about the existing partnership and joint ventures, Gerber said that all of them are “doing well” and the partnerships are “quite deep”.
“We now see the fruit ripening in Japan with our joint venture with All Nippon Airways (ANA). It took us more than three years to have such a fruitful partnership. If we really want to have a joint venture which is working which delivers advantages and value for customers, we believe there has to be enough time and that is what we have managed to achieve.” He expects to have a similar result also for other partnerships with Cathay Pacific and United.
“We are proud to have had long-standing connections with customers in the Indian air cargo industry since 1959. Our aim is to build on this in the future,” added Gerber.