Lufthansa Cargo bullish about 2021 and expect rates to ease in H2
NEWLY appointed chief executive of Lufthansa Cargo, Dorothea von Boxberg, says she is expecting another good year in 2021 but adds that rates are likely to cool in the second half
09 March 2021 - 15:27
The bullish comments were made after Lufthansa Cargo announced a record adjusted operating profit of EUR772 million (US$920 million), more than double the previous record of EUR342 million in 2010.
The 'extraordinary results' were because of 'extraordinary circumstances', Ms von Boxber said, with profits largely driven by high rates as a result of the loss of bellyhold capacity. Reduced costs also played a part.
'It's been a great year. We love to have those results, we are proud of it and we are happy to be able to contribute to the group,' she said.
'We know that it won't last forever, but how long it lasts is of course a question we think about.'
Looking ahead, Ms von Boxberg expects demand to remain strong this year. She pointed out that volumes from China began to thrive at the end of last year, US inventory levels remain low and business confidence in Europe is high, reports London's Air Cargo News.
In terms of sectors of importance for Lufthansa Cargo, the automotive industry recovered at the end of last year, pharma volumes continue to grow, and cross-border e-commerce demand continues to rise - last year this sector increased by 10 per cent and is expected to return to 20 per cent growth next year.
However, the capacity situation is expected to change this year and Lufthansa is expecting its passenger operations to begin to pick up in the second half of the year.
'Capacity will come back and that is what we expect in the Lufthansa Group,' von Boxberg said. 'So, capacity will come back but right now demand is much higher than capacity and we also see that demand is still growing as well.
'For this year, we can say that we will have a good year in airfreight again although it will probably not quite stay at the record levels we have seen in the past months.'
As well as the return of belly capacity, the industry will need to manage the freighter capacity that has been added to the market over the course of the last 12 months in response to lost bellyhold space. However, Ms von Boxberg is hopeful this will not create overcapacity in the market.
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