The ongoing slide in global cargo markets has hit Lufthansa Cargo, dragging its adjusted EBIT down 67 per cent to EUR 24 million as its adjusted EBIT margin declines by 7.3 percentage points from 11.2 to 3.9 per cent.
Revenue for the logistics division of Lufthansa, which includes the cargo business, fell 4.0 per cent which the German carriers says was, “especially due to declining yields on the Asia and America route, and lower load factors.” Total operating income was 3.0 per cent lower than last year, while operating expenses rose by 6.0 per cent.
The carrier says in part this was due to volume-related increase in cost of materials and services, partly due to taking over belly capacities of Brussels Airlines. It also cited higher depreciation as a result of capital expenditure on three new B777F freighters and other tax reporting effects.
Overall the logistics business saw a 62.8 per cent cargo load factor, down -6.8 percentage points year-on-year. Demand in RTKs was 2,103 million, down -2.0 per cent.
Of its regions, the Middle East/Africa region saw demand growth (RTKs) rise 26 per cent (load factors up 3.9 per cent) while Asia/Pacific fell -8.0 per cent with load factors tumbling -8.4 per cent. Europe was down -3.0 per cent with load factors down -14.7 per cent and the America region saw a 1.0 per cent growth in RTKs while load factors declined -5.4 per cent.
“Focus remains on improvements to efficiency and cost structures, which are ongoing,” the carrier says of its logistics business.
Overall adjusted EBIT for the Lufthansa Group fell to EUR -336 million in the first quarter 2019 (compared with EUR 52 million a year ago), as over-capacity, higher fuel costs and intensive competition bites.