Cargo slowdown - various from Reuters
Lufthansa Cargo cuts capacity due to market drop
By Paul Needham
FRANKFURT, June 20 (Reuters) - Lufthansa Cargo AG said on Wednesday it has cut its overall weekly freight capacity by about 200 tonnes due to the slowing international air cargo market but denied it had grounded any freighters.
The Deutsche Lufthansa AG <LHAG.F> logistics subsidiary was cancelling selected flights or using smaller aircraft to destinations suffering weaker demand at short notice and on a flexible basis, spokesman Dietrich Seidl told Reuters in response to an enquiry.
These cuts, affecting mostly the U.S. and Asian markets, had been made over the last two months in reaction to the weakening market and would continue for the foreseeable future, he said.
"We have reduced capacity to the extent of two freighters a week. Flights have been reduced at weak times, for example, during the week," Seidl explained.
Lufthansa Cargo operates a fleet of 22 freighter aircraft, including 14 MD11F with capacity of some 90-95 tonnes and eight B747-200Fs with capacity of some 100-110 tonnes.
Two freighters are thus equivalent to about 200 tonnes of weekly capacity while the airline's fleet has total operating capacity of 2,000-2,200 tonnes.
Seidl denied Lufthansa Cargo had grounded any aircraft and stressed the carrier wanted to keep all its aircraft operating so that it could react quickly once the market picked up again.
The capacity reductions following a clear slump in worldwide air cargo traffic since early this year which has affected the big three markets of North America, Europe and Asia.
Lufthansa Cargo reiterated on June 13 that it expected a fall in operating profits this year due to worsening market conditions after seeing a fall in volumes and load factors over the first four months of the year.
In recent weeks, major U.S cargo carriers have announced large-scale job layoffs to cut costs, including Atlas Air <CGO.N> (300), CNF <CNF.N> unit Emery (900) and Airborne Inc <ABF.N> (640) as well as Polar Air Cargo (60)
Atlas which operates 37 Boeing 747 freighters is withdrawing six from service until the market improves while Emery is cutting its fleet to 38 aircraft from 54.
NCA cuts weekly Tokyo-NY freighter flights by one to 14
NEW YORK, June 20 (Reuters) - Nippon Cargo Airlines reduced its weekly freighters between Tokyo and the U.S. to 14 from 15 due to weak market conditions, an NCA spokesman said Monday.
"We're combining one freighter flight on Tuesdays," said Peter Diefenbach, NCA's assistant director for the sales and marketing department in New York.
The airline, which uses Boeing 747-200s, is also "canceling selective flights," Diefenbach said.
Previously on Tuesdays, NCA flew a freighter from Tokyo to Chicago and then on to John F. Kennedy Airport in New York. Another freighter flew from Tokyo to the U.S. West Coast.
Now one freighter is flying from Tokyo to San Francisco and then on to JFK, Diefenbach said. This combined flight cuts NCA's weekly frequencies to 14.
"The market is worse than ever," Diefenbach said. "I thought it would get better," but that has not happened.
With summer starting, Diefenbach worries the situation could stay bad.
"You have more passenger planes in the summer with belly hold space for cargo. They're giving it away."
Atlas Air cuts ground staff, fleet as cargo mkt weakens
NEW YORK, June 19 (Reuters) - Atlas Air, a unit of air cargo carrier Atlas Air Worldwide Holdings Inc on Tuesday said it will cut its ground staff by 200 employees and take a second-quarter charge as the current economic slowdown diminishes demand for its services.
Atlas Air also said it would decrease its fleet service levels by up to six aircraft "until more normalized flying utilisation can be resumed."
CEO Richard Shuyler said, "The sudden and precipitous drop in air freight demand that our customers have seen since the first quarter requires that we take very immediate and decisive action... for the long-term."
"The global extent of the current economic downturn has become far wider and deeper than most observers had expected, and has occurred far more quickly than anyone anticipated," he added in a statement.
"Not only are our customers no longer flying at levels that exceed guaranteed minimums, but many are having difficulty even achieving those minimums," he said.
"As a result, the operational and maintenance spare aircraft in our fleet that would normally be used to generate excess flying are sitting largely idle. In addition, two aircraft that we recently took back from a customer that has filed for bankruptcy have not been placed elsewhere due to the current economic environment," Shuyler said.
"This has caused Atlas Air to re-evaluate its fleet needs and to take these aircraft out of service."
Last month, it announced a furlough of 105 of its crewmembers and some flight crew took advantage of voluntary reduction opportunities offered by Atlas so that no flight crewmembers are affected by today's announcement, it said.
But it "is continuing to evaluate its crew staffing requirements," the statement added.
The Purchase, New York, company said it will take a second-quarter charge of between $40 million and $50 million.
Atlas Air said it expects to break even in the second quarter and earn between 90 cents and $1.10 per share for the year before one-time charges.
Analysts had expected earnings of about 49 cents for the quarter and $2.24 for the year, according to Wall Street research firm Thomson Financial/First Call.
Atlas Air Worldwide Holdings' shares closed at $19.09 on the Nasdaq on Monday, just above a 52-week low of $19.05.
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