Lufthansa Cargo Eyes 25% Market Share In Asia-Pacific

Lufthansa Cargo AG, the wholly-owned subsidiary of Germany's flagship carrier Deutsche Lufthansa, expects to increase its cargo market share to 25 per cent from 17 per cent in the Asia Pacific rim.

The company hopes to meet this target with the commencement of operations of its Indian unit, Lufthansa Cargo India, in early 1997.

Lufthansa Cargo India, which is awaiting its operator's licence from the directorate gerneral of civil aviation (DGCA) has already begun operations from Sharjah with three Boeing 727-200s under US registration.

The current routes operated by Lufthansa Cargo AG in India as well as the existing personnel will be absorbed into the new company. Commenting on Lufthansa's presence in the Indian market, company sources said India is the airline's largest cargo market, accounting for nearly 1.6 per cent of the group's cargo revenues.

 

It is also the second largest passenger market, bringing in 1.5 per cent of the group's revenue from passenger operations.

Lufthansa Cargo India is a 60:40 joint venture between the UK-based Hinduja group and Lufthansa Cargo AG and is seen as the German airlines' first step towards realising its policy of developing a strong market position in South East Asia and later in South Africa. It also needs to improve its performance from its 14 per cent profit decline to DM 434 million in the first nine months of the current financial year.

The loss in profits can be attributed to two factors, namely, the 40 per cent hike in global fuel costs, and a price war waged by several European aviation companies. This had resulted in Lufthansa losing nearly a quarter of a million of its passengers in Europe, company sources said. The focus on Asian markets could be an effort by the airline to balance its gradually declining status in Europe.

The group has, however, shown a 6.6 per cent increase in its turnover at DM 15 billion over the first nine months.