Cargo joint venture for Lufthansa & ANA

Lufthansa Cargo and All Nippon Airways (ANA) will launch a strategic air cargo joint venture on routes connecting Japan and Europe. The jv, which has now received anti-trust immunity from both Japanese and EU regulators, will launch from Japan to Europe in winter 2014/2015, and from Europe to Japan in mid-2015.

The carriers say this is “the first worldwide cargo joint venture of its kind,” that it will allow them to “jointly manage activities covered by the joint venture, including network planning, pricing, sales and handling,” and will also involve their “moving under one roof at major stations, such as the airports Narita and Nagoya in Japan and Dusseldorf and Frankfurt in Germany.”

What’s in it for Lufthansa? Japan is a major origin and destination for air freight, and All Nippon has an extensive domestic network that can feed freight to and from Tokyo. It also has a strong, and growing, regional express freight business based at its Naha hub in Okinawa. A cooperation deal with ANA will give Lufthansa far better access to the Japanese market, and the regional Asia Pacific market, than it could gain on its own.

What’s in it for ANA? Lufthansa is one of the two or three biggest international cargo carriers in the world, with nineteen widebody freighters as well as the belly capacity of its widebody passenger fleet. Cooperation with Lufthansa will greatly expand ANA’s reach – not just to Europe, but to the rest of the world via Lufthansa’s network.

How the agreement will affect Lufthansa Cargo’s freighter fleet plans is not clear. The carrier currently operates fifteen MD-11Fs and four 777Fs and has one more 777F on order. It posted an operating profit of €77 million in 2013, better than its main European competitors, but down from €105 million the year before. Not long before he was promoted to head parent Lufthansa’s passenger operations, then-CEO of cargo Karl Ulrich Garnadt indicated that the when the two 777Fs then still on order entered service, they would be in addition to the current fleet rather than replacing any of the MD-11Fs. But shortly after the first of those two was delivered in June of this year, the carrier retired an MD-11F, keeping the fleet constant at nineteen units. Harry Hohmeister, who replaced Mr. Garnadt reportedly has called for a serious look at the size of the freighter fleet, but whether, and to what extent, the joint venture will impact Lufthansa’s fleet plans is not yet known.

For its part, All Nippon operates ten 767-300 Freighters – three production units and seven freighter-converted -300BCFs – in regional service, mostly in the overnight express network based Naha.