Lufthansa Cargo has made an EBIT loss of €64 million ($68 million) as yields fell and continuing overcapacity hit revenue and earnings.

Revenue for Lufthansa Logistics, which covers Lufthansa Cargo, Jettainer, time:matters and its investment in cargo airline AeroLogic, was down 11.5 per cent to €2 billion, while earnings before interest and tax (EBIT) were down from €3 million in 2015 to -€64 million in 2016.

Capacity in available cargo tonne kilometres was cut by 0.5 per cent to 12,548 million and freight tonne kilometres rose by 0.3 per cent to 8,385 million, with the load factor rising 0.5 percentage points to 66.8 per cent.

By region, European load factors remained stable at 47.8 per cent, America was down 1.5 percentage points to 62.3 per cent, Asia/Pacific increased four percentage points to 78.8 per cent while Africa declined 3.4 percentage points to 50 per cent.

In its annual report, Lufthansa Group says: “Structural overcapacities in the market are eroding yields for airfreight. This adversely affects earnings at Lufthansa Cargo, particularly outside the high season, and will probably continue to do so in future.”

A strategic cost cutting programme was drawn up and has been underway since autumn 2016 and will have effect from early this year, while an agreement was reached with the work council to shed around 800 jobs in late 2016, resulting in €32 million of restructuring provisions for the reporting year. Lufthansa Cargo plans to cut staff costs and related expenses by at least €80 million by 2018.

Lufthansa Cargo says all five Boeing 777 Freighters have been successfully integrated into its fleet, and its Boeing MD-11 Freighter fleet was reduced by two to 12 active aircraft, and it says further capacity adjustments are planned for 2017.