Lufthansa Cargo’s operating profit down after price-fixing settlements
Germany’s Lufthansa Cargo reported an operating profit of 81.5 million euros ($108.3 million) in 2006, down 24.7 percent from 108.2 million euros in the previous year, as the carrier was hit by higher fuel prices and out-of-court settlements relating to price-fixing allegations.
Lufthansa Cargo’s revenue in 2006 increased 3.4 percent to 2.85 billion euros ($3.78 billion) after a 1.3 percent volume increase to 1.76 million tons of freight and mail.
The Frankfurt-based carrier said its 2006 result was negatively affected by about $90.3 million after reaching agreements to settle class-action lawsuits alleging price-fixing in the United States and Canada, while its fuel expenses climbed to 497 million euros ($660.6 million), compared to 421 million euros in 2005.
Looking ahead, the airline said it expects “significantly higher” earnings in 2007, although it will face challenges along with the rest of the international air cargo industry such as imbalance in trade flows, increasing competition, high fuel prices and growing security requirements.
It also hopes to grow its market share in Asia, especially India and China, through its joint venture Chinese cargo carrier, Jade Cargo International. Jade Cargo was formed in 2004 by Lufthansa Cargo and Shenzhen Airlines in partnership with Deutsche Investitions- und Entwicklungsgesellschaft, and commenced operations in Shenzhen last summer using three new Boeing B747-400ER freighters between Asia and Europe. An additional three of the same Boeing freighters will be joining Jade Cargo’s fleet by early 2008.
Lufthansa Cargo’s operating profit down after price-fixing settlements
