Lufthansa Cargo’s profits declined in the first half of this year, a report from the company reveals.
First-half year adjusted earnings before interest and taxes (EBIT) for Lufthansa’s Cargo logistics segment declined to EUR15 million (prior-year period: EUR127 million), as a result of falling demand on routes between Europe and Asia. Lufthansa Cargo has responded to this change in the airfreight market by adjusting its capacities accordingly.
Looking to the future, Lufthansa expects its Cargo segment to post a full-year margin of between 3 and 5%. However, this is dependent on freight demand stabilising in the fourth-quarter period of this year, the season in which this business segment tends to generate a substantial part of its earnings.
Ulrik Svensson, chief financial officer of Deutsche Lufthansa AG, said: “Our earnings are feeling the effects of tough competition in Europe and sizeable overcapacities, especially on our short-haul routes out of Germany and Austria. We are responding to this by further reducing our costs and increasing our flexibility.”
Lufthansa’s half-year report also indicates that its long-haul operations and Technik engine maintenance services performed well in the first six months of 2019. Meanwhile, the price war in Germany and Austria had a negative impact on its short-haul route earnings.