Lufthansa Cuts Cargo Price

The move is an aggressive pricing strategy aimed at gaining market share, especially in its critical domestic German market. The cargo carrier said the pricing offensive would be combined with "wide-ranging measures to sharpen the focus on the customer."

Lufthansa Cargo's official announcement that it would strive for volume growth on the back of appreciable price cuts offered no details of what it termed "favorable rates" for long-term capacity acceptance agreements. The move by the world's largest cargo airline focuses on volume rather than yields.

A 2%-3% volume increase since mid-October was characterized as the first positive result of the pricing effort. Lufthansa reportedly cut prices 5%-10% from prior-year levels during the period.

Earlier, the airline reported volume fell 1.7% through August to 4,585,000,000 revenue tonne kilometers.

Andreas Otto, Lufthansa Cargo's board member in charge of marketing, said the airline expected to rebound with major growth and revenue increases in 2004 in part thorough leasing extra capacity and by putting all of its own assets on the market, according to a report by Air Transport World. It will also intensify its cooperation with cargo alliance partners Singapore Airlines, Japan Airlines System, and Scandinavian Airlines. Singapore Airlines is the third largest cargo carrier, reporting a 1.3% increase in cargo volumes (4,351,011,000 FTK through August). Japan Airlines reported flat volumes of 1,016,815 FTK through March, the latest figures available. SAS saw a 12% rise in cargo volume to 535,556,000 FTK through September.

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