Lufthansa Cargo (LH, Frankfurt International) is planning to park several more MD-11Fs over the coming twelve months as part of an intensified cost-cutting plan.
Parent firm, the Lufthansa Group, said in its first half earnings report for its 2016 financial year that its Cargo unit had registered the group's biggest decline in first-half earnings – EUR95 million (USD104 million) - blamed on what it said was 'massive market overcapacities'.
With yields in the airfreight sector having now declined to levels last seen during the 2009 financial crisis, Lufthansa Cargo has been forced to dial up its belt tightening measures to include an EUR80 million (USD89 million) structural cost savings program, double a previously anticipated EUR40 million (USD44 million) drive, as well as a fleet and staff reduction plan.
As of June 30, Cargo has mothballed two MD-11(F)s leaving it with twelve of the type alongside five B777Fs. With the reduction in capacity, so Cargo will also shed up to 800 jobs from its global workforce. 500 of the affected positions will come from the firm's German home base, Reuters reported in June.
Mainline carrier Lufthansa is not immune from the decline in demand with plans to take one additional widebody and six narrowbodies out of service during the upcoming winter 2016/17 season.
