'Markedly better results' expected this year, Alan Peat reports from Frankfurt
THE FINANCIAL results for Lufthansa Cargo in 1999 show an increase in turnover, but a fall in operating profit - largely the result of major capital expenditure on aircraft and business development projects.
Talking to FTW in Frankfurt last week, director Walter Gehl expressed himself content with the company's performance in a difficult business environment for cargo airlines in 1999.
Despite a weak international economy, he said, especially in the first half-year, we returned an operating profit of 106.4-million D-marks.
Questioned about the Dm165-m drop from last year's figures, Gehl said: The results reflect
substantial capital expenditure in the fleet infrastructure, information technology and staffing - preparing the ground for a
successful future.
The company spent almost Dm529-m on three new MD11 freighter aircraft (bringing the MD fleet to 10) and downpayments on six others - due to come into service in 2001.
It also invested Dm53.3-m on modernising its global IT network, expanding ground infrastructure, and acquiring stakes in other companies. Most noticeable of the last are joint-ventures with Deutsche Post - Aerologic to expand the international activities of DHL (in which both companies have a stakeholding); and e-logic as an entry into e-commerce (a field in which Lufthansa Cargo intends to involve itself aggressively, c.e.o. Jean-Peter Jansen told FTW).
Revenues rose by 5.9% to Dm4 071.5 in 1999, of which traffic revenue contributed Dm4 031.5-m - a rise of Dm240.5-m (+6.3%) over 1998.
The results position Lufthansa Cargo amongst the strongest growing cargo airlines, according to Gehl.
During the year we outpaced the average 4% growth rate returned by the carriers belonging to the AEA (Association of European Airlines). Our growth matches the IATA (International Air Transport Association) figure of seven percent.
The company is anticipating markedly better results this year, Jansen told FTW. In the first three months of this year, he said, we returned our best-ever first-quarter results.
With the world economy looking good, we expect good results for the full year of 2000.
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