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Sep 05

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  • Created: Mon 7th Jan 2013
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Lufthansa Cargo said it is raising rates 20 percent worldwide

In a letter dated August 29 Lufthansa Cargo said it is raising rates 20 percent worldwide, effective with its winter schedules 2013/14.
So far, not a word has been heard from other carriers.
That may indicate others are waiting to see if Lufthansa can make the increases stick.
The letter signed by Lufthansa Board Member Andreas Otto noted:
“The constant downward trend of yields has lead to prices being again, partially, significantly below cost of operation.
“Lufthansa Cargo is also under severe pressure to review the extent of the freighter fleet, because at the present yield levels there is again no economic justification for a freighter operation on many routes.
“Profitable operations are the prerequisite for keeping our freighters in the air and our ongoing investments to the benefit of both yourselves and our joint customers.
“In this framework, a rate adjustment is essential and necessary in the short term.”
A well placed source surveying the upcoming “peak season ” leading up to Christmas 2013 toldFlyingTypers:
“A hard choice and maybe even a desperate move.
“It is known that almost all carriers and, especially LH are concerned about the cargo shift from air to ocean.
“This 20% rate increase coupled with the change of surcharge calculations from actual to volume weight which LH tried to sell as “neutral price move because we are reducing rates” will hasten the process of customers migrating from air to ocean freight.
“It is not known at this time if any other airlines will follow suit and also increase their rates. If the others don’t, then LH will face an even bigger problem of losing cargo to the competition.
“In the end, it is the freight forwarder who has to explain all this to the shippers and consignees.”