Lufthansa spreads its wings further across China
Lufthansa Cargo has expanded its Chinese freighter network with two weekly flights between Frankfurt and Chengdu in southwest China.
The B777 freighter departs Frankfurt every Monday and Saturday and returns every Tuesday and Sunday with connections to Germany, Europe and the world.
Chengdu, the capital city in southwest China’s Sichuan Province, joins Shanghai, Beijing, Guangzhou and Hong Kong as the fifth freighter destination in China for Lufthansa Cargo, one of the world’s leading air freight carriers.
“We are very proud to be serving the western Chinese city of Chengdu twice a week. The expansion to our network will allow us to offer solutions to the booming markets in the west of China,” said Frank Naeve, Lufthansa Cargo Vice President Asia-Pacific. “These new flights to Chengdu are strengthening our position in China. It is a further investment into a very important Chinese airfreight market.”
As Lufthansa Cargo’s first footprint to western China, Chengdu is an ideal point for both exports and imports, especially on the IT industry, consumer products and automobile sector, according to the air freight carrier.
Chengdu is a familiar destination for Lufthansa Cargo because it transported a pair of pandas, Meng Meng and Jiao Qing, from Chengdu to Berlin in June 2017. The two pandas, accompanied by two animal caretakers, enjoyed the approximate 12 hours and 20 minutes’ first-class flight experience, and happily chomped on several bamboo snacks while en route.
It is the freight carrier’s latest commitment to the Chinese market. The freighter frequency to Shanghai, the largest station of Lufthansa Cargo in China, was increased in 2017 from seven to 11 flights per week.
The Chinese market remains strong, important and profitable to Lufthansa Cargo. China accounts for 20 percent of global tonnage and 30 percent of the freight carrier’s revenue, said Alexis von Hoensbroech, Lufthansa Cargo Chief Commercial Officer.
In addition, Lufthansa Cargo offers the belly capacities of Lufthansa and Austrian Airlines to Beijing, Shanghai and Hong Kong as well as Nanjing in east Jiangsu Province, Qingdao in east Shandong Province and Shenyang in northeast Liaoning Province. Lufthansa has been serving Shenyang three times a week, with passenger aircraft from Frankfurt, since the end of March 2018.
“We are proud to have long-standing connections with customers in the Chinese air cargo industry for more than 20 years. Our aim is to build on this and expand into the future,” said Hoensbroech.
Since the fourth quarter of 2016, the global air freight markets have grown continuously, at double-digit rates on average after a major setback. Lufthansa Cargo’s growth in the Chinese market also continues. Its export business in the Chinese market increased 12 percent last year, along with a 16 percent growth in the import businesses. Lufthansa Cargo transported 240,000 tons to and from China in 2017.
Import cargo to China includes machinery to support infrastructure development in Chinese cities and consumer goods driven by cross-border e-commerce, where Chinese citizens shop online from overseas, said Hasso Schmidt, Director of Sales and Handling, Eastern and Western China.
The other large segment of imports to China are semi-produced parts of electronic devices, like mobile phones and automobiles for assembly, along with a growing number of fresh foods from overseas, Schmidt said. Specific orders to China also include a lot of baby products, such as diapers and formula milk ponder, as well as a large amount of cherries from Chile every November and December. China has become Lufthansa Cargo’s third largest volume export market in 2017, following Germany and the United States. The Chinese market is also the second most profitable in revenue for the air freight carrier, after Germany.
In spite of some bottlenecks, such as busy slots, airspace congestion and over-flight rights to Russia, Lufthansa Cargo is still committed to further expand its businesses in the Chinese market.
The first-tier airports in China such as Shanghai, Hong Kong and Beijing have great growing potentials on air freight, but they had congested capacity and were difficult to get additional access, said Hoensbroech. On the other hand, the secondary airports in cities like Chengdu and Shenyang have easy access, but are more difficult to get profits.
In order to cope with the demands, Lufthansa Cargo has established a joint venture with Shanghai Airport Authority for the Shanghai Pudong International Airport Cargo Terminal Co.
With an investment of 479.02 million yuan (US$75 million), it has become one of the top cargo terminals of the world and succeeded in playing a key role in establishing Pudong International Airport as one of the major cargo hubs in China. Pudong airport handled a total of 3.8 million tons of cargos in 2017, making it China’s top and the world’s third busiest air freight hub.
Hoensbroech, who studied physics at the University of Bonn and obtained a doctorate in an astrophysics-related subject at the Max Planck Institute for Radio Astronomy, joined the Lufthansa Cargo in December 2014 and, has witnessed the major growing and setbacks of the air freight market in the last three and half years.
“We have gone through a very difficult time, but we used the crisis to modernize the company,” Hoensbroech said. “When the market came back, the company was in much better shape than before and therefore, the turnaround became very successful.”
Lufthansa Cargo ranks among the world’s leading air freight carriers. In the 2017 business year, the airline transported around 1.6 million tons of freight and mail and sold 8.9 billion revenue ton-kilometers. The company employs around 4,500 people worldwide. Lufthansa Cargo focuses on the airport-to-airport business. The cargo carrier serves around 300 destinations in more than 100 countries with its own fleet of freighters. The belly capacities of passenger aircraft operated by Lufthansa, Austrian Airlines and Eurowings, offer an extensive road feeder service network. The bulk of the cargo business is routed through Frankfurt Airport. Lufthansa Cargo is a wholly owned Lufthansa subsidiary of Deutsche Lufthansa AG.