AI hardware, Asia demand lift Lufthansa cargo revenue 27%

Lufthansa Cargo is currently the No. 14 carrier in the world, by traffic volume, according to the International Air Transport Association. It operates 12 Boeing 777 freighter aircraft and is able to market capacity on six 777s operated by AeroLogic, a joint venture between Lufthansa and DHL Express, for a total of 18 widebody freighters under its control. It also manages the belly capacity of sister airlines Lufthansa Airlines, Austrian Airlines, Brussels Airlines, Discover Airlines and SunExpress to transport freight. 

FreightWaves reported on Monday that Lufthansa Cargo has quietly abandoned plans to reinstate four Airbus A321 standard-size freighters pulled from European and North Africa regional service in April. The company didn’t provide a reason for souring on the aircraft, but analysts suspect it has to do with operating and market characteristics that make it difficult to fly them at a profit.

Lufthansa Cargo revenue grew 27% during the second quarter to 1 billion euros (equivalent to $1.2 billion). Operating income grew 26% to $1.21 billion, and on an adjusted basis was up 58% to $133.6 million. During the first half, revenue was up 16% and profit margin rose 2.2 points to 10.4%.

Second-quarter demand remained strong, up 3%, despite disruptions and economic uncertainty associated with fighting in the Middle East. Lufthansa benefitted from flight reductions at Middle Eastern competitors such as Emirates and Qatar Airways Cargo and the shift of some ocean freight to air as businesses sought more predictable transport, resulting in a 27% increase in yields, year over year. Fuel surcharges offset fuel expenses and brought in additional revenue, which positively contributed to yields.

The crisis triggered a surge in demand on passenger and freighter routes to Asia. Yields to Asia and on new intra-Asia routes increased by 30%, while yields to the Middle East rose even more. The company also attributed profitability to the increased focus on high-margin industry sectors like pharmaceuticals, semiconductors, automotive, and artificial intelligence.

“The increased need for transportation of server racks indeed has almost become an industry-shaping element. We are allocating and reallocating our network to serve our customers who try and who want to move server racks around the world,” Lufthansa Group CEO Carston Spohr said on a call with analysts. “As you can imagine, for these high-risk and very expensive equipment, logistical costs are almost immeasurable, so this is a very profitable business. You do need freighter aircraft for this business by the sheer size of these racks.” 

Robust demand for semi-conductors and AI-related hardware helped air cargo industry volumes grow 7% in June, according to research from Xeneta.

Available cargo capacity expanded by 2%, driven by 6% belly space in passenger aircraft, particularly from the marketing of capacity on ITA Airways. Lufthansa Group acquired a minority stake in the Italian carrier in 2025.

Hub modernization

Part of the premium strategy includes modernizing cargo infrastructure on the ground. 

Lufthansa is building a $682 million, 3.5 million square-foot cargo terminal with high bays for efficient pallet storage and automated transport system that will significantly expand cargo handling capacity and efficiency. The initial building, considered the most important phase, spans 860,000 square feet — equivalent to 11 soccer fields. 

Lufthansa Cargo boasts the terminal will be the most modern air cargo hub in Europe when completed in 2030.

The new facility features sophisticated warehouse management systems and conveyors to efficiently route goods, a fully automated 131-foot tall high-bay warehouse with nearly 3,000 storage slots for large pallets and an automated pallet warehouse for temperature-sensitive and specialized shipments. The high-bay section alone will enable more than 300 storage and retrieval operations per hour, doubling capacity, Lufthansa said in a news release.

The cargo airline also consolidated the activities of its heyworld GmbH and CB Customs Broker subsidiaries under the newly established brand GlobeCross. The new company combines e-commerce logistics service, including last-mile delivery, with customs clearance expertise to provide businesses with end-to-end transport for small parcel shipments. The strategy goes beyond the traditional airport-to-airport model for an airline so Lufthansa Cargo can capture additional business opportunities in the growing parcel logistics sector.

Overall, Lufthansa Group profits were dragged down by $864 million in extra fuel costs compared to last year. Operating profit fell 56% to $441 million and net income plunged nearly 90% to $141.7 million.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

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