Lufthansa Cargo rides airfreight pricing power to stronger yields

Lufthansa Cargo increased its base yields by 14% year on year in the third quarter, with strong demand and constrained capacity supporting pricing power, even as Middle Eastern airlines restored services.

Overall yields rose 22%, as the carrier also successfully passed-on higher fuel costs. Adjusted EBIT more than tripled, to €162m ($182), with margin reaching 15.6%, up from 6% a year ago.

Lufthansa Group CEO Carsten Spohr told analysts on a conference call in Frankfurt yesterday that the strong performance came during what is usually the seasonally weakest quarter for airfreight.

“The strong performance reflects a very robust demand environment. Capacity increased by 5%, driven by double-digit growth in belly capacity, mainly due to the now fully integrated belly capacity of [Italian airline] ITA. Chargeable weight increased by 7% and, as a result, load factors increased by more than three percentage points. At the same time, pricing remained very strong,” he said.

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