The Lufthansa Group reported revenues from its Logistics business segment up 17.4% y-o-y in 3Q17, to €594 million, on higher cargo traffic and a more favorable pricing environment. EBIT in 3Q17 was €21 million, up from a loss of €17 million in the same quarter of 2016, in part from the success of a cost-cutting program implemented last year.
Based on LH Cargo’s most recent traffic release, strong financial results were to be expected. Group cargo traffic rose 6.0% y-o-y in September to 938 million RTKs. Traffic on the trans-Atlantic lane grew fairly strongly – up 8.3% to 399 million RTKs, but traffic to/from the Asia-Pacific region was up just 3.7% to 439 million RTKs. For the first three quarters of 2017, Lufthansa Group’s cargo traffic was up 8.0% to 7.99 billion RTKs.
For the first nine-months of the year, LH Cargo revenues (excluding other logistics revenues) were 15.9% higher at €1.64 billion, while overall profit for the logistics unit was €105 million, up €168 million from the €63 million loss in the same period in 2016, on lower expenses. Employee headcount for the unit dropped 4.5%, while capital expenditures dropped 20.7%.
Unlike last year when cargo capacity grew faster than cargo traffic, LH Cargo’s cargo capacity was up just 2.0% over the first nine-months of 2016. Traffic measured in RFTKs rose 6.4% during the same period, pushing load factors 2.8 pts higher. Notable cargo traffic revenue increases were reported in the regions America and Asia/Pacific, which saw y-o-y increases of 17.7% and 18.8% in the first nine months of 2017.
Turning now to LH Cargo’s freighter fleet, earlier this year, the resurgence in air cargo demand convinced LH Cargo to put a parked MD-11F back into service. The carrier now operates a freighter fleet comprised of five 777Fs and twelve MD-11Fs. While the remaining MD-11Fs are still relatively young, LH Cargo is expected to soon provide guidance on its future fleet renewal plans.
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