Dear reader,

From left: Dr Alexis von Hoensbroech, Dr Karl-Rudolf Rupprecht, Peter Gerber, Dr Martin Schmitt

This last year demanded everything of Lufthansa Cargo. Demand saw a noticeable downturn after a flying start to the year and an outstanding first quarter. European cargo airlines weren’t the only ones to have their lives made difficult by overcapacities in global airfreight markets and a strong US dollar. Lufthansa was also affected by a number of strikes last year. Lufthansa Cargo was still able to carry out all of its freighter flights despite the strike action, but the labour disputes led to a significant decline in bookings.

Our adjusted EBIT of EUR 73.5m was lower than expected. We consistently implemented a number of measures last year to get our performance back to a level where we are able to make long-term investments. These measures are based on three pillars:

1. Reviewing the project portfolio and reducing external project expense
2. Retirement of two MD-11F aircraft in order to significantly improve the load factor of our freighters
3. Launching the C40 cost-cutting programme, which will sustainably reduce our annual HR expenses and costs of service providers by EUR 40m from 2018 onwards

These measures will help us to continue investing in new infrastructure, aircraft and services for our customers and remain at the forefront of our industry. We reached some important milestones last year on our journey towards the future.

The five Boeing 777 freighters which we ordered have been fully integrated into our fleet since February 2015. These modern cargo aircraft are renowned for their excellent reliability, low unit costs and low fuel consumption.

We also expanded our partnerships with other airlines. Our partnership with Japanese airline ANA got off to an excellent start. The joint venture started with the joint marketing of freight capacities from Japan, and flights from Europe to Japan were added in summer 2015. We also added a second partner at the end of the year. We plan to work together with United Cargo on transatlantic routes. This will be done with a focus on the customer, who will benefit from a wider network, more choice and process efficiencies.

With the global roll-out of a new IT platform for freight handling, the biggest software project in the Company’s history was brought to a successful conclusion at the end of 2015. The MOSAIK legacy system was deactivated once and for all in December. The new IT platform is based on an industry solution and took over from MOSAIK without any issues. We also made good progress with the digitalisation of all our main business processes in our eCargo programme. The launch of our new website and smartphone apps were some of the events that reflected the advances we have made in this area. It is now even easier and quicker for our customers to access information and services.

Finding the right price structure was a major issue for practically everyone in the aviation sector last year. Unlike some of its competitors, Lufthansa Cargo and Swiss World Cargo decided not to introduce any all-in rates. Instead, we decided to combine all of our surcharges into a single airfreight surcharge which is much cheaper than the previous system. This new surcharge has been in place since autumn 2015. This structure provides more transparency for Lufthansa Cargo’s customers and speeds up the process of preparing quotes. The surcharge also allows us to factor in the volatility of external cost factors which we have no control over such as fuel, exchange rates and airport fees.

A commitment to the environment and society is one of Lufthansa Cargo’s core values, and was on display once again in 2015. We met with around 150 representatives from the worlds of logistics, politics and science to discuss ways in which we could significantly reduce the impact that our business has on the environment at our environmental conference in Frankfurt, which has already become something of a fixture.

Lufthansa Cargo really showed its colours in November. One of our MD-11F aircraft is now flying around the world with 24 colourful children’s footprints on its fuselage as a flying ambassador for the aid organisation Cargo Human Care.

As you can see, 2015 was an eventful year and we are firmly convinced that 2016 will also demand a lot of us. However, we are well equipped for the year ahead. We have a clear strategy, an outstanding product and a first-class team.
Thank you for supporting us on this journey.

Kind regards,

 

 

Peter Gerber Dr. Alexis von Hoensbroech Dr. Karl-Rudolf Rupprecht Dr. Martin Schmitt
Chairman of the
Executive Board and CEO
Board Member
Product and Sales
Board Member
Operations
Board Member
Finance and Human Resources