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Lufthansa Cargo targets Vienna for growth

By Hpanchal on September 11, 2012

Hopes of Austrian Airlines retaining any semblance of an independent cargo product have finally been dissipated. The quick-fix solution of Austrian Lufthansa Cargo, following the acquisition of the ailing Austrian carrier by neighboring Lufthansa, has been consigned to the trashcan, a little more than a year after its creation. Vienna, however, remains a key market for Lufthansa.

Lufthansa Cargo has concluded, it would appear, that the Austrian market would fare better under the greater Lufthansa Cargo mass than with any allusion to independence. There might also be an element of asset-stripping by the German carrier. Austrian Airlines is still a heavily loss-making operation and is proving difficult to absorb into the German fold, much to the growing frustration of the head office in Frankfurt.

Besides, the Austrian Airlines’ cargo business was never about Austria, but more about its Vienna hub operation. Hasso Schmidt, Lufthansa Cargo’s head of regional management for Central and Eastern Europe, readily conceded this point.

“Vienna for us is about being an Eastern European gateway, rather than just an Austrian entry point,” Schmidt told Air Cargo World. “That is why we feel we can best develop that concept by being an integral part of the Lufthansa Cargo network.”

Within that context, Schmidt is still happy to refer to Vienna as the carrier’s third European hub, after Frankfurt and Munich. “We may never see our freighters operating through Vienna, but it will play an increasingly important role for us in developing the Eastern European market,” he said. He is dismissive of some of the current freighter operators touching down in Vienna, which he refers to as ‘carpetbagger capacity.’

“Some of these carriers are returning to Asia from Europe and are looking to uplift cargo wherever they can.” He is also aware of the fact that other Eastern European gateways are making headway in attracting direct freighter capacity, which could dent Vienna’s Eastern European gateway crown. Indeed, Vienna airport recorded an 8-percent, year-over-year, drop in freight volumes in the first six months of the year, down to 131,000 tonnes.

But Schmidt is content with the extent and reach of the Lufthansa Cargo product offering in the Eastern European market and the strength of some of the niche sectors within it. In particular, he refers to the current strength of the Poland market, in which he said Lufthansa Cargo enjoys a 30-percent share.

“There is a very strong focus on the aerospace sector around the Polish city of Rzeszow, in what is known as ‘Aviation Valley,’ where around 70 companies are located,” Schmidt said. “Here, you have such names as Pratt and Whitney, Sikorsky, Goodrich and Siemens engaged in production, not only of aerospace components, but also complete units, such as passenger doors for Boeing and landing gear for the Airbus A380.”

A further aerospace cluster is located around Warsaw, with a strong presence of the European aviation consortium EADS and its Airbus Military subsidiary.

As well as taking on responsibility for Austria, Schmidt’s empire has stretched beyond the confines of Eastern Europe and now includes Greece, Turkey and Israel. “We are going to be adding our first freighter service to Tel Aviv this winter,” Schmidt told Air Cargo World. “We are also surprised at how strongly Greece is performing, despite its financial troubles.”

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