Despite the Ukraine conflict and economic headwinds, Lufthansa Cargo forecasts 

strong performance in 2023

Lufthansa has a fleet of 16 Boeing 777 freighters deployed on intercontinental routes

In 2022, the adjusted operating profit of Lufthansa Cargo was €1.6 billion ($1.7 billion). However, management anticipates that demand and yields will decline this year, resulting in a decline in profitability. After the pandemic, Lufthansa Cargo management anticipates "substantially" better profits.

The fourth quarter of 2022 was difficult due to excessive inventories, decreased consumer spending, and a reduction in ocean freight bottlenecks. Earnings before interest and taxes decreased by 10.4% to $310 million. To $4.9 billion, freight revenue increased by 22% and profit by 7%. Cargo contributed 14% of Lufthansa Group's $34.8 billion in revenue, preventing bankruptcy.

The success of the cargo sector can be ascribed to a number of things, including the addition of new aircraft, airfreight experience, technological efficiency advances, and a focus on specialty products with higher costs. Since the reintroduction of the COVID-19 passenger aircraft, Lufthansa Cargo's belly area is now half of its managed capacity. Owing to an increase in international widebody capacity and a decline in demand, weight-based capacity utilization decreased 10 percentage points year-over-year to 61%. The load factors of freighters improved.

25% greater revenue was generated by Lufthansa Cargo subsidiaries Time:matters,  Jettainer, and ground handling joint ventures. In spite of an 8% decline in worldwide airfreight demand, Lufthansa Cargo achieved record profits in 2017. The Ukraine conflict compelled aircraft to fly longer routes around Russia, and Russian cargo-only airline AirBridgeCargo exited the market, losing 1.6 freighters or 11% of fleet capacity. This year, avoiding Russia may reduce freight capacity due to an abundance of fuel. Post-COVID-19 The Lufthansa Cargo management anticipates a prosperous freight year. CEO Carsten Spohr anticipated that shipping yields in 2022 will decline but remain above pre-pandemic levels. Spohr stated that rates will not return before 2019 due to the dominance of the company's digital sales and handling systems in the industry. 

Remco Steenbergen, CFO, stated that China's reopening will aid cargo and passenger flights following the COVID-19 lockdown. Steenbergen asserts that Lufthansa Cargo's cost structure, particularly after replacing older tri-engine MD-11 aircraft with 777s, enables the company to sustain exceptional profitability despite a decline in demand. This quarter's cargo yields will be 70 percent more than they were four years ago, according to him, and focusing on high-value products such as medications and live animals would increase profitability.

CEO of Lufthansa Cargo, Dorothea von Boxberg, asserts that direct connections, freighter uplift, and specialty goods contribute to a yield premium of $1.32 per kilogram. Customer experience is enhanced through enhancing digital interfaces and proactively recovering and rebooking shipments. Lufthansa Cargo uses the One Record standard of the International Air Transport Association to optimize airfreight operations. Lufthansa Cargo has sixteen Boeing 777 freighters and two Airbus A321 freighters. Lufthansa Cargo owns eleven aircraft, whereas AeroLogic, which is linked with DHL, charters five. Lufthansa Cargo handles the belly cargo for Lufthansa and its members, with the exception of Swiss International. Last year, Lufthansa purchased two narrowbody Airbuses and anticipates doubling its short- and medium-haul fleet this summer by adding two modified jets to suit the growing demand for express delivery. More aircraft, according to management, will boost network dependability. Last year, Lufthansa placed orders for three 777s and seven 777-8 freighters to lower carbon emissions by 13% and boost cargo capacity. The second half of 2022 is anticipated to see the delivery of two further aircraft. Lufthansa Cargo picked the 777-8 over the Airbus A350 freighter to avoid having a fleet with a small number of aircraft. Lufthansa Cargo constructed a second facility in Vietnam in order to increase its Asian presence beyond China.