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   Vol. 15  No. 60
Monday August 8, 2016

Letter To Lufthansa

Letter To Lufthansa

Dear Lufthansa Cargo,

     Firstly, we hope that all is well and that after a long gray period of time the sunshine is over your heads at your Frankfurt home.
     Although we have not been invited to any of your press briefings in 2016, we follow your progress in German-owned media, including Handelsblatt, DVZ, and in the German-owned Air Cargo News publication in London, and certainly from our sources both in Germany and around the world.
     Of course, just like all other airlines you want to increase yields, but one thing we have learned covering this beat is often that attempt can end up have the net effect of shooting yourself through the foot.
     It is a fact that Lufthansa Cargo volume has decreased every year since 2012 and the simple reason for that action is that your rates have not been competitive in the market.
     Now we understand that you have been experiencing a big increase in air cargo volume since earlier this year as your rates have dropped substantially.
     Well, now, elsewhere comes change.
     Some airlines have just announced that they want to increase their rates by 10 cents to support better yields.
     But, let’s wait and see.
     If others do not follow they will most likely experience continued increase in yield but drop in volume.
     Unfortunately, the constant here is that a drop in volume eventually outruns a gain in yield.
     One thing we are certain will never work is high yield and high volume.
     If you can increase Lufthansa Cargo yield with that newly announced product called myAirCargo service, mazeltov!
     But that remains to be seen.
     myAirCargo service is available immediately, between almost all European countries and the USA, and plans in the coming months to extend the offer to countless other countries.
     Speaking of myAirCargo, as that sevice appears available in addition to consumers, also to passengers, our question is how many passengers will carry items that are too big or too heavy for the cabin?
     One thing is certain. Passengers have paid excess baggage charges in the past to get their stuff on the same flight.
     If they can now use cargo rates it does create additional revenue on the cargo side, but won’t revenue be lost on the passenger side (and most probably more than is gained by cargo)?
     Will more passengers bring additional baggage/items?
     We doubt that.
     Will they have more guys with their chopper bikes rolling down Route 66?
     Sorry, but we doubt that as well.
     We note that the fine and always helpful Andreas Pauker of Lufthansa PR declared that myAirCargo will be an easy process and the passenger only has to enter dimensions and weight and will immediately receive the price for transportation.
     Andreas also assures that the procedure is transparent and much less complicated than handling via a local forwarder.
     In fact, for all intents and purposes, the claim is that LH is taking care of the whole chain, including customs.
     But Mr. Paulker also says that LH will utilize contracted forwarders for the handling to and from the airport.
     Our question is what rate are they quoting when I have a huge toolbox of 75kgs and I fly from Frankfurt to Hong Kong?
     What about pick up from my home?
     When will Lufthansa do the packing?
     How will they direct delivery in Hong Kong if I still have to book my hotel?
     How much will all of this cost and come to think of it, what about customs, etc?
     Let us step back a bit and see how all of this works if, as advertised, the service is rolled out this summer.
     We will also report how well the contracted forwarders are doing with this new model, which, as one industry wag said with a smile, will most probably be “a pain in the neck.”
     As is said around the Arend and FlyingTypers family every time something new is on the horizon:  Break a Leg!

Our very best wishes,

Nils Haupt and Geoff ArendP.S. About those Lufthansa Cargo Press Conferences . . . In the modern era, Nils Haupt (pictured here with myself) and later Matthias Eberle hosted the most wonderful and expansive press conferences in air cargo.
     Wonderful because the gatherings were always business and also social, allowing for the Fourth Estate to gather, ask questions, learn something, and later talk amongst each other in a completely relaxed setting. Lufthansa Cargo made the press conference work and in our minds made the media better.
     Today the air cargo press conference is for all intents and purposes a dead duck, with the exception of the trade show and on the rare occasion when a carrier wants to show off something, for example as Qatar Airways did about six months ago, and after that, when we all went to see Emirates SkyCargo’s big operation at Dubai World Central.
     That’s too bad.
     And yes, while scolding Lufthansa gently here, we hope they and others pick up the air cargo press conference tradition again sometime soon.
     Give and take can open new doors.

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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Access specific articles by clicking on article title
Vol. 15 No. 57
All About India
India To Top Of The Heap By 2022
Chuckles For July 28, 2016
Africa To India September Takeoff
India To Africa Waiting In The Wings
Vol. 15 No. 58
ACIA A Collaborative Effort
Chuckles For August 1, 2016
EMO Trans Singapore Swing
Ron Davies: A Man & His Airlines
Why Ron (R.E.G.) Davies Matters

Vol. 15 No. 59
LIGHTBOX for August 3, 2016
Lufthansa Cargo's Long Hot Summer
Chuckles For August 3, 2016
Repo Man Moves Customer Claims

Publisher-Geoffrey Arend • Managing Editor-Flossie Arend •
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend • Advertising Sales-Judy Miller

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