Lufthansa Cargo moves back into the black

Lufthansa Cargo moves back into the black    Lufthansa Cargo made an operating income of 34 million euros ($46 million) in 2004, as compared to an operating loss of 16 million euros in the previous year, on strong growth in revenue and cargo activities.
   The German cargo operator boosted its revenue 14 percent in local currency to 2.5 billion euros ($3.3 billion) in 2004, when it carried 1.75 million metric tons of cargo and mail, 11 percent more than in 2003.
   “Lufthansa Cargo is growing faster than the industry average despite difficult general conditions,” said Jean-Peter Jansen, chairman of Lufthansa Cargo.
   The German airline also raised its load factor to 67 percent last year, from 65.6 percent in 2003, while adding cargo capacity.
   It said the general recovery of the world economy boosted air cargo volumes.
   “Nonetheless, the general conditions for profitable growth were and are difficult,” Jansen said. “They include record fuel prices, an aggressive competitive environment and the strong euro. While Lufthansa Cargo takes in two-thirds of its revenues in foreign currencies, two-thirds of its costs are in euros.”
   Lufthansa Cargo said it has implemented programs to “cut costs in all areas” and reported that it has reduced staff by 2 percent between the end of 2003 and the end of 2004, to 4,980 people.
   In October 2004, Lufthansa Cargo and Shenzhen Airlines, supported by development financier DEG Invest, set up a joint cargo airline called Jade Cargo International in China. “In autumn 2005, the new cargo airline will begin servicing key business centers — starting in Asia — from its base in Shenzhen,” the German air cargo operator said.
   Commenting on trade prospects for 2005, Lufthansa Cargo warned that there are “no signs of improvement, especially with respect to capacity trends in the market.” The unfavorable exchange rates, high fuel prices and imbalanced traffic flows will continue to significantly affect the bottom lines of international cargo carriers, it said.
   However, Lufthansa Cargo expects to raise its profits this year.