A strong year for Lufthansa and Cathay

Two of the world’s top cargo carriers have reported solid full-year performance for 2014.

Germany-based Lufthansa Cargo reported 2014 full-year operating profit up 26.6% to €100.3 million. The increase is particularly impressive because it was achieved despite a slight (-0.3%) decline in revenue to €2.44 billion, a 1.4% decline in cargo traffic to 8.61 billion RTKs, and a drawn-out series of pilot strikes in the latter part of the year.

Commenting on the results, CEO Peter Gerber made the expected remarks about Lufthansa Cargo’s strong focus on quality, its “high-performance products,” and flexible capacity management, as well as on the performance of its new 777Fs.

However, he was also quoted much more interestingly in The Loadstar, particularly on the subject of Lufthansa’s continued focus on freighters even as Air France-KLM and IAG move toward a belly-only approach. “[Their] conclusion is that we don’t really need [freighters] any more, but those who can operate them cost effectively will have a competitive advantage. It’s going better for us than our colleagues in London,” he said. “IAG is saying, ‘we’re so smart we’re going to bellies’. But it was a comment aimed at investors. Never has anyone sold defeat in the market so brilliantly.”

Meanwhile, in Hong Kong, Cathay Pacific Airways’ cargo unit reported cargo revenue up 7.3% to HK$25.4 billion, although yield declined 5.6% to HK$2.19 per RTK. And despite a 10.4% increase in cargo capacity, load factor for the year was up 2.5 percentage points to 64.3%, reflecting a very strong 14.8% jump in cargo traffic for the year to 10.04 billion RTKs.

Discussing the results, the company said: “after a prolonged period of weakness, cargo demand started to improve in the summer of 2014 and was strong in the fourth quarter, which is the peak period for cargo. The Group’s business benefited from lower fuel prices in the fourth quarter, but this was partially offset by fuel hedging losses.”

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