LUFTHANSA CARGO TO OFFER CARGO MANAGEMENT FOR SMALLER AIRLINES
Lufthansa Cargo is creating a new subsidiary to sell total cargo management service to small and mid-sized passenger airlines and tourist charters.
The service will officially launch in June, company officials said during a press briefing at the CNS Partnership conference in Miami. Georg Midunsky, vice president sales and marketing for the Americas, will head the new subsidiary.
'This is something completely new in our industry,' Midunsky said in an interview.
Lufthansa, essentially functioning in much the same manner that a non-asset-based third-party logistics company manages all a shipper's transportation requirements, would serve as an intermediary to find the best company to provide administration, accounting, ground handling, delivery and other functions. The new company will buy cargo capacity and market it, leaving the airline with the responsibility to fly the cargo.
By outsourcing their cargo activities airlines will benefit from Lufthansa's sophisticated cargo network, expertise and ability to pool business for better contract terms, Midunsky said.
Other companies will do most of the actual work. The new subsidiary could contract with Lufthansa or other companies that best meet a particular airlines prices and needs, Midunsky said.
Three European airlines — Condor, Span Air and Sun Express — have agreed to outsource cargo management to the Lufthansa subsidiary.
Condor is a Lufthansa charter subsidiary and Lufthansa nearly owns a majority of shares in Sun Express. Lufthansa has no stake in Span Air, the second largest Spanish carrier.
Lufthansa already provides third-party cargo management for Condor and Sun Express and developed a Yellow Cargo initiative to package that service for the general market. The decision to create a separate subsidiary was done with the idea of creating a neutral company that isn't obligated to funnel business to Lufthansa Cargo, company officials said.
The move follows a recent trend at Lufthansa to spin off separate companies for catering, cargo and other specialties that operate on their own.