United and Lufthansa enter cargo joint venture

Yesterday, United Airlines and Lufthansa Cargo signed a joint-venture agreement that will pave the way for extensive trans-Atlantic cooperation. In the near-term, both airlines will begin aligning their cargo IT systems to enable metal-neutral access to each-other’s cargo capacity between Europe and the US. Further integration will follow, with joint operations expected to commence later this year.  

From a customer-perspective, the joint venture promises to offer faster connections through coordinated “handling processes and transfers at numerous stations” and through expanded routing options. Combined, the carriers’ route networks offer 600 direct connections per-week between the US and Europe.

United also stands to gain access to freighter capacity. The US-based carrier, which does not operate any freighters of its own, will soon be able to sell space on Lufthansa’s freighters moving between the United States and Europe.

The partnership follows an extended period of significant growth at United Cargo. Most recently, March 2017 traffic was up 23.8% y-o-y, rounding out 1Q17 during which cargo traffic was 20.3% higher compared to the same quarter in 2016.

Growth at Lufthansa Cargo meanwhile, was soft in 2016 (total cargo traffic up 1.6% over 2015) but a restructuring program appears to have the carrier back on the right track. Traffic picked up at the onset of peak season 2016, and for the first three months of this year traffic was 8.3% higher y-o-y compared to 2016.

The jv with United will become the third such cargo jv for Lufthansa, after similar arrangements with Japan-based ANA and Hong Kong-based Cathay Pacific.