“Our magic was to balance demand across the network”

When the Lufthansa Group announced its financial results for 2024 on March 6, the standout performance came from its logistics business segment, which includes Lufthansa Cargo, one of Europe’s leading cargo airlines. Revenue rose by 10 percent, reaching 3.26 billion euros compared to 2.98 billion euros in 2023. The segment achieved an operating profit of 251 million euros for the year, with 199 million euros generated in the traditionally strong fourth quarter for airfreight. This is a significant improvement compared to the 30 million euros in operating profit earned in the fourth quarter of 2023. The fourth quarter of 2024 was the best fourth quarter in the Company’s history, with the exception of the years 2020 to 2022, which were marked by the Covid-19 pandemic.

In an exclusive interview with The STAT Trade Times, Ashwin Bhat, CEO of Lufthansa Cargo, speaks to Reji John about the key highlights of their financial performance, the rollout of the BOLD MOVES strategy, and how well-positioned Lufthansa Cargo is to face the challenges of 2025. Bhat has been the Chairperson of the Executive Board and CEO of Lufthansa Cargo since 15 April 2023.

How significant was the repositioning of your main-deck capacity to Asia during the peak season in considerably improving your financial results?
In order to meet the high demand, Lufthansa Cargo offered around 29 percent more freighter capacity to Asia during the peak season in the fourth quarter than in the same period last year. We also added the new stations Shenzhen (SZX) and Zhengzhou (CGO) to our freighter network to support important supply chains from China to Germany. Having said that, the fourth quarter results were also positively impacted by demand to both North and South America. Our magic was to balance demand across the network and not just focus on one commodity.

Belly cargo revenue developed very well in 2024, could you tell what is the approximate share of volume carried in the bellies versus freighters? And do you notice any specific trend of more cargo flown in main-deck as against bellies since you have a large fleet of freighters?
I ask for your understanding that we cannot release this information to the public.

One of the two things that you highlighted for the remarkable 2024 numbers was the “speed of innovation”. Could you elaborate this with one or two examples?
Putting our strong purpose of “Enabling Global Business” into the center of our action we want to offer premium and innovative solutions in a flexible way. To fulfill this, we believe in the power of collaboration both as a Lufthansa Cargo team, but especially with our partners. And indeed, we developed a comprehensive and compliant e-commerce solution in 2024 within a few months in cooperation with our subsidiaries heyworld, CB Customs Broker and the local customs authorities to enable customers to import e-commerce shipments to Europe smoothly and compliantly.  

Another example underlining our purpose in 2024 was the expansion of new routes and direct connections. Our transpacific flight, a weekly freighter rotation that connects Frankfurt via Ho Chi Minh City with Los Angeles and then returns to Frankfurt, underscores our commitment to connecting economies by responding to the demand of Vietnam's fast-growing economy.

But there were also important successes from what I call "3-degree changes" that showcase our "agility muscle" as a company to respond quickly to changing market dynamics, from customizing processes for the semiconductors industry to digital solutions that improve customer experience.

“In the long term, an expansion of our Airbus A321F fleet is conceivable. There are no concrete decisions at the moment.”

Asia, as a region and cross-border e-commerce cargo, as a product, has contributed very positively to your 2024 financial performance. Given the uncertainty and volatility that you see in the market, largely due to the rapidly changing geopolitical positions, what do you think will be the impact on Lufthansa Cargo in 2025?
The air freight industry has been, is and will remain volatile, and the demand for short-term quality transport solutions continues to grow. In consultation with our customers, Lufthansa Cargo steadily analyzes the market situation to be able to react quickly and purposefully to lasting changes. With our dense global network, catered both with belly and freighter capacity, a diverse product portfolio with multiple speed options and extensive expertise, we are able to respond flexibly to unforeseen political, economic or natural events. Even if there are fluctuations in individual traffic flows, the long-term demand for air freight solutions remains stable and e-commerce will remain a driving force behind the growth we experience in global air cargo. Hence, Lufthansa Cargo continues to be optimistic to the coming year.

Do you intend to add more A321Fs to the fleet as cargo coming from e-commerce channels is expected to increase substantially?
In the long term, an expansion of our Airbus A321F fleet is conceivable. There are no concrete decisions at the moment.

How important is the cooperation between ITA Airways and Lufthansa Cargo and when do you expect to have joint offers to your customers?
With its strong home market in Italy, the integration of ITA Airways creates further growth potential for the Lufthansa Group in 2025. We expect new opportunities for our cargo customers in the short term.

Could you expand the “BOLD MOVES” and maybe highlight one or two elements of this for the year 2025?
At the beginning of 2024, we started to implement our “BOLD MOVES” strategy. With a three-year horizon, it aims to ensure sustainable, profitable growth and secure at least a top 5 position in the global airfreight industry by focusing on three priorities: Competitive Core, Profitable Growth and People & Culture. To maintain competitive excellence, we are streamlining operations, reducing complexity and improving cost competitiveness while improving service quality. Profitable Growth is being driven by entering new markets segments, diversifying revenue streams and leveraging the Lufthansa Cargo Group's strengths. By fostering our brand strength, Lufthansa Cargo is relying on its employees to drive the transformation by leveraging its expertise.

In 2025 we want to continue the process of tapping into new markets and sectors to achieve profitable growth in a dynamic market environment. Further growth always must go in line with our promise to continuously strive for excellence in service and adding value for our customers.