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Magazine Stories September Issue 2009
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Friday, 13 February 2009
Lufthansa Cargo confident new services - including air-sea freight options and animal handling - will help it through the crisis
In the 2008 financial year, Lufthansa Cargo transported around 1.70 million tonnes of freight and mail and clocked up 8.3 billion revenue tonne-kilometres and revenues of 2.9 billion euros. The cargo carrier serves some 300 destinations in 90 countries in a global network with its own fleet of freighters, the belly capacities of Lufthansa’s passenger aircraft and an extensive road services network.
Gabriela Ahrens is responsible for Lufthansa Cargo in South-East Asia and Australia. She was born in Steinkirchen, Germany and initially worked in tourism both in Germany and United Kingdom before joining Lufthansa German Airlines in Frankfurt in 1987. She moved to LH Cargo in 1999 as regional manager sales - Eastern China, based in Shanghai. From 1995-1999 Ahrens worked in the passenger division of the airline. She returned to cargo in 2001 and as regional manager sales Hong Kong, Southern China and Taiwan based in Hong Kong. In 2005 she moved back to a passenger role as general manager Lufthansa Australia and moved to Sydney. In 2007 she moved back to cargo and was promoted to her present position as regional director for South-East Asia and Australia. She is headquartered in Singapore.
What is your role with Lufthansa Cargo?
As regional director Lufthansa Cargo South East Asia I am responsible for the development of Singapore, Malaysia, Philippines, Indonesia, Vietnam, Cambodia, Thailand and Australia. A very interesting and challenging region with a lot of cultural differences and of course I am very happy to still take care of ‘Down Under’.
AirShip Australia, launched in difficult economic times, has now had six months to bed down. How is the new product performing?
We launched a 'one stop' international multi-modal AirShip service from Europe to Australia in January this year, offering a high quality and reliable air and sea logistic solution.
We are using our daily direct connections into our hubs in Shenzen and Hong Kong linking to the largest Australian seaports Melbourne, Sydney and Brisbane. All one-stop-shopping with LH offering the complete transportation chain under one AWB, and all with the quality assurance of our services.
Considering the overall economic situation the service is doing very well. It is a more cost-effective and flexible freight option than direct airfreight with a faster transportation time than by traditional ocean-going freight and with clear advantages for our customers. Transportation time is reduced by approx 50 per cent compared to pure sea freight. Capital working costs also are much lower and it gives us expanded and flexible capacity access to further meet our customers’ supply chain needs. The sales advantage of AirShip is the cost advantage to shippers and it enables us to offer an attractive alternative to direct air freight services.
You have also expanded livestock services with the opening of an animal lounge in Frankfurt. How does that work?
Lufthansa Cargo is proud to have the world's most modern airport animal facility at Frankfurt Airport. Built on approximately 4000 square metres, it is run by experienced livestock experts. They provide for the animal 'passengers' organising care, feeding and shelter which maintain the strict hygiene and veterinary directives of the European Union.
The new animal lounge is optimally prepared for all species, whether large or small, exotic animals or family pets.
The animal lounge works on a 'fast lane' principle for export, transit and import. The animals get priority and are first on and off the aircraft.
The facility boasts a special veterinary examination area and a black-light area for tropical ornamental fish - very important for South East Asia as most of the worldwide tropical fish originate from here.
On the numbers side the facility boasts 42 large animal stalls; 18 climatic chambers for sensitive birds and exotic animals such as reptiles or insects and 39 small animal boxes - mainly for dogs and cats.
A special team of 'animal keepers' including horse attendants, former zoo employees, vets and police dog handlers guarantee an unprecedented level of professional animal care.
The animal lounge is located in its own dedicated special safety and hygienic area and marks the European Union external boundary. Each employee has two lockers, one for his or her clothing inside the animal lounge and again one for the outside. This meets strict quarantine rules and guarantees the safety of the animals.
Time: Matters (TM) your special service for courier, same day and emergency logistics seems to be coming into its own since the global financial crisis (GFC). More companies are reducing and centralising in a bid to reduce warehouse capacity. Has this helped TM?
Time:Matters and its services, especially courier services, are needed at all times regardless of any crisis. The GFC has not helped as products in this sector are now not in such high demand. Unfortunately TM is not immune to the downturn.
Lufthansa is also expanding its electronic channels, adding an electronic claims process. How has this been accepted by customers?
We are simplifying our processes wherever possible. This is to the clear benefit of our customers — a fast and reliable way of processing claims — and the improved efficiency has been welcomed.
What progress has Lufthansa made on ‘green’ freight initiatives?
The airline is very much involved and engaged in environmental initiatives. We are making good progress on green freight initiatives, but I am not personally involved and have little information on the details.
You recently inked a new aviation agreement with Israel, is any other route expansion in the pipeline?
At this stage we are performing route reviews as and when appropriate and do not expect to announce any major route changes in the near future.
How is Lufthansa’s yield in Asia-Pacific? What markets do you expect to improve first?
The Global Financial Crisis I think is hitting everybody in our industry very hard. Fortunately Lufthansa Cargo management reacted quickly to the changing market dynamics and we believe that we are on the right track to get through this crisis as a winner.
Yields are very much under pressure. We are trying to keep them at a viable level. Our goal is to stay profitable with our operations. Not easy in the current environment.
However we are seeing markets stabilising and the last couple of weeks have been very good for tonnage and load factors. We hope we have reached the bottom of the trough and are on a upward trend again. Still, as mentioned before, the yields also have to stabilise to really talk about improvement.
As for which markets will improve first, we are working with industry to improve all markets where possible. The problem is the overall market is quite volatile and some markets change more stable than others and it's changing more or less on a weekly, if not daily, basis.
Singapore and Malaysia airports have reduced fees to airlines during the GFC has this helped?
Yes and we appreciate the gesture by the airports as it helps us survive. Singapore and Malaysia and many others are very service-orientated airports and help to keep flights in the air. It is good to know that they see us as partners in business and want to help combat this tough and critical period.
What impact has 9/11 security had on air freight?
When 9/11 happened in the US it changed the world of airfreight business almost overnight. Security measures all over the world have been drastically increased. For Lufthansa Cargo security is a top priority and measures have been taken to provide customers with the best possible security for their valuable cargo.
The US is implementing 100 per cent screening from 2010. Will Lufthansa do the screening itself and charge additionally or will you outsource the screening?
I am not involved in the details of the screening processes in US. However we will adhere to the new requirements and whether this is outsouced or if we will do it will depend on quality and complexity. Cost also is an issue and I believe it will be done the most cost-effective way whilst maintaining maximum security.
Air France and KLM have decided to merge many of their services as well as operate joint services and reduce freight staff where it is practical. How much increased competition does this represent?
I cannot judge and comment on the actions taken by our competition. However cost and competitiveness is important to all participants in the industry and increasing productivity is an issue for all of us.
You have worked in both passenger and freight roles for Lufthansa, which do you prefer?
This is a most difficult question to answer. I love my job, but my origins are on the passenger side, and previously I never thought that I could ever do anything else. Then I had the chance to look beyond the fence and explore the air freight world within the Lufthansa Group - and I loved it. Australia was a very special experience with Lufhansa being so successful in a market we don't fly any more. With my current position as regional director - South East Asia , one big plus is that I am still responsible for Australia and with our Airship product we are now also serving Australia again on the freight side. A good feeling !
I feel fortunate that I have these great opportunities and challenges on both sides of the business, not only on the career side but also with all the cultural experiences and the beautiful people I have met over the years.
