The impending arrival of its first B777F heralds a new freighter era for Lufthansa Cargo. But it also confronts the German carrier with something of a dilemma.
The first aircraft out of an order for five B777Fs is due to touch down at the airline’s
Frankfurt home base later in October. The second will arrive by the end of the year, with three further examples to be delivered over the next 18 months. It is thought the first aircraft will likely be employed on the North Atlantic.
The new-breds will join an existing fleet of 18 MD-11Fs, Lufthansa Cargo’s valiant workhorse freighter. Until just recently, the carrier was insisting it would retain its entire MD-11F fleet, with the newer aircraft required to provide capacity build.
But now Karl-Ulrich Garnadt, CEO of Lufthansa Cargo, has revealed that its two oldest MD-11Fs will be pensioned off when the airline receives its two early B777F arrivals.
It raises the question as to whether LH Cargo has flipped the coin and decided to degrade its freighter fleet on a one-for-one basis as each new B777F is embedded.
It is not a decision that needs to be rushed; the MD-11Fs continue to provide the carrier with amortized capacity, which can be operated at virtual cost.
Although the overall market remains weak, the airline reports that it has “decelerated the decline” in tonnage and succeeded in increasing the capacity utilization of its aircraft to 70 percent, effectively running full.
Further capacity outages also have to be set against the question of the five B777F options LH Cargo has listed with Boeing. The airline says it will confront that issue early next year.
Some analysts are surprised as to why the carrier went for the B777F option in the first place when it placed its order with the plane-maker back in March 2011.
They argue it would make better sense and get more for the money with the B747-8F, particularly as Lufthansa is one of the few airlines to order the B747-8i passenger variant, providing welcome fleet commonality.
Interestingly, LH Cargo has never pursued the B747F route after it discarded its B747-200F hand-me-down conversions from its parent company. The airline therefore has never operated the B747-400F. As it stands, it is taking delivery of a freighter variant that on the face of it provides it with only marginal increase in lift. While the faithful MD-11F can uplift 90 tonnes, the B777F can haul 103 tonnes as against the top weight of 140 tonnes on the B747-8F.
“We chose the B777F because the combination of efficiency and size from our point of view, is ideal,” says Lufthansa Cargo of its endorsement of the B777F.
As to the trade-off with the B747-8F?
“We are convinced that it is much easier, but of courses will still be hard work, to operate the B777F with profitable load factors than the much bigger B747-8F,” Lufthansa Cargo says
And the airline may not necessarily be heading up a one-way street with the choice of the B777F. Boeing is already offering airlines order options on a larger B777-9X passenger version, which could provide a future freighter solution. Any bets on LH Cargo upgrading some of its options?
There is of course one more important trade-off that has played into Lufthansa Cargo’s decision to go with the B777F. It is not entirely unfamiliar with the operating capabilities of the aircraft.
Through its joint venture with DHL Express to create AeroLogic, it now has regular weekend access to that carrier’s fleet of, yes, B777 freighters. The extra capacity is used to bolster LH Cargo’s services to the U.S., soon to be joined, it would appear, with its own weekday B777F doppelganger.
Indeed, it was suggested at one stage that it would be logical for Lufthansa Cargo to channel all its future freighter needs through the Leipzig-based joint venture, offering far cheaper operating costs than the heavily union-laden Lufthansa Group. It was probably for that latter reason such a course of action was not pursued.
Any thoughts of shifting the carrier’s freighter operations to Leipzig also appear to have been dissipated. That has been confirmed with the decision to move ahead with the 588.4 million euros (US$780 million) investment in a new logistics center at Frankfurt Airport, work on which will start early next year, with a four-year build time. Even so, the project has been scaled back with a 20-percent reduction in capacity because of the continuing uncertainty of the market and as a direct result of the imposition by a German court of a blanket night flight ban at the German gateway.
More recently, the airline has been troubled by a decision by a Dutch court ruling that it can no longer operate a twice-weekly MD-11F service between Puerto Rico and Amsterdam, insisting the call at Rafael Hernández Airport is little more than a technical stopover for flights originating out of Latin America.
Lufthansa Cargo argues it has full traffic rights out of Puerto Rico, which falls under the protection of the open skies agreement between the U.S. and EU. The airline says it will likely appeal the decision.
At least the skies over Frankfurt are a little clearer for the German carrier after would-be rival flag carrier Air Cargo Germany fell by the wayside earlier this year.
So it is, Lufthansa Cargo will shortly have a multi-disciplined freighter fleet at its disposal. This, it says, will enable it to far better match capacity strengths with actual route demands and to outride the continuing vagaries of the existing market. It will be recalled that Cargolux ruminated long and hard on whether to stick with a single or mixed freighter fleet choice, before coming down in favor of sticking with the lone upgraded B747F option.
Lufthansa Cargo has the chance to prove that it may just strike a lucky formula.