Operating profit quadrupled
Lufthansa Cargo AG turned in the best-ever performance in its history in the 2000 business year. The logistics services provider and one of the strongest growing companies in the Lufthansa Group further expanded its lead in the international airfreight and logistics market.
Profits from operating activities rose year-on-year by 173.1 million euros to a total of 227.5 million euros. This is a fourfold increase on the year-earlier level and impressively demonstrates the company`s competitiveness. Revenues were up by 23.2 per cent to a total of 2,564 million euros. The bulk of the total is made up of revenues from operating activities, which increased to 2,542 million euros (plus 23.3 per cent).
In a global comparison, Lufthansa Cargo again successfully cemented its leading position in the international airfreight business. Compared with the average 9 per cent attained by IATA member-airlines, fuelled largely as in the previous year by the positive development of Asian carriers, Lufthansa Cargo - with a growth rate of 8 per cent - ranked among the world`s high-growth cargo carriers. It again outperformed the carriers in the Association of European Airlines (AEA), which grew on average by barely 7 per cent.
“Excellent results in the 2000 business year have vindicated our strategy. We have profited, above all, from the measures we took in previous years to set the company in the right direction,” said Lufthansa Cargo Chairman Jean-Peter Jansen at today`s annual press conference in Mainz. “Our efforts have had the gratifying effect of further improving company value. We have also gained in weight within the Lufthansa Group.”
Success rests not only on external factors:
Success in the past business year due not only to the favourable world economic environment and advantageous currency movements. It is even more attributable to the time-definite products, which Lufthansa Cargo has spearheaded since their launch in 1998, and the Service Packages or dedicated transport solutions for specific shipment categories, which it market-launched last year. These services especially profited from world economic growth and the ensuing boost in demand. Amid good macroeconomic conditions, Lufthansa Cargo raised capacity (measured in terms of tonne-kilometres) by 8.7 per cent and, with demand up by 8.4 per cent, it sold almost all that capacity increase in the marketplace.
Expenditure outgrown by earnings:
A contributory factor in the year`s good results was the slower growth rate in expenditure compared with the appreciable rise in revenues and earnings. Operating expenses increased year-on-year by 488.3 million euros or 22.9 per cent to 2,624.2 million euros. The increase was largely due to expenditure on fuel, personnel and depreciation. The fuel bill was up by 162 million euros on the 1999 level, an increase of 91 Prozent. However, Lufthansa Cargo managed to contain the effects of high kerosene prices by fuel hedging and by adding a fuel surcharge to cargo rates. Depreciation rose by 16 per cent to 99 million euros owing principally to the purchase of four MD-11 freighters.
Further investment in the fleet, infrastructure and information technology:
During the year, Lufthansa Cargo pressed consistently ahead with fleet modernisation. Capital expenditure in fleet renewal in 2000 totalled 348 million euros arising from the purchase of four new MD-11 freighters and downpayments on a further two of the type. That investment will equip the fleet strongly for future international competition, since the MD-11F is a notably quiet and low-pollution aircraft. In further pursuance of its investment policy, Lufthansa also injected substantial resources in ground infrastructure and information technology (19 million euros).