Lufthansa Cargo Q3 yields jump 14%, EBIT more than triples

Lufthansa Cargo raised base yields 14% year on year in the third quarter, and its adjusted EBIT (earnings before interest and tax) more than tripled to €162m ($182m), with margin at 15.6% against 6% a year earlier.

Overall yields climbed 22%, as the carrier passed higher fuel costs through to customers. The performance came in what is normally the seasonally weakest quarter for airfreight, Lufthansa Group CEO Carsten Spohr told analysts on a conference call in Frankfurt.

"The strong performance reflects a very robust demand environment," Spohr said. "Capacity increased by 5%, driven by double-digit growth in belly capacity (freight carried in the holds of passenger aircraft), mainly due to the now fully integrated belly capacity of [Italian airline] ITA. Chargeable weight increased by 7% and, as a result, load factors increased by more than three percentage points. At the same time, pricing remained very strong."

Group CFO Till Streichert said the cargo division's year-to-date earnings had reached €361m, with further upside expected.

What does this change for the full-year outlook?

"Adjusted EBIT of Lufthansa Cargo is likely to comfortably surpass €500m in full-year 2026, with possibly even more positive dynamics," Streichert told analysts. He cautioned that "a high degree of uncertainty still remains, as visibility in the air freight business is usually limited to about two weeks booking in advance."

The group's own review of the quarter attributed the yield gains to strong demand "in the context of the significantly changed market environment due to the conflict in the Middle East and the corresponding reduction in competitors' capacities in the region." Reduced market capacity and sharply higher fuel costs drove a significant yield increase compared with previous quarters.

Global revenue rose 26%, with broad-based regional growth. Yields ex-Asia remained robust despite de minimis pressure (the low-value import threshold affecting e-commerce flows). Revenue from temperature-controlled freight increased 33% year on year.

Where is demand strongest?

Spohr highlighted Asia-Pacific, with India standing out as a key growth market, and growing Lufthansa Cargo exposure to transpacific flows.

"Transpacific flows are becoming increasingly important for us, even though we're on the other side of the world," he said. "Currently, demand is driven by express deliveries on the one hand and by high-margin verticals on the other. These include semiconductors and IT equipment, but also pharma and automotive."

He added that Lufthansa Cargo continues to benefit from supply chain disruptions worldwide, but has also structurally improved its positioning by focusing on the markets and products that create the highest yields and value.

A forwarder quoted by industry publication The Loadstar said the drivers of pricing power, and the implications of returning Middle East capacity, differed across the major east–west trades.

"Capacity is extremely tight on the Far East-North America tradelane – where obviously the return of Middle East capacity is not an issue – driven by phenomenal demand from the hyperscaler boom and which continues to pump up rates," the forwarder said.

Will pricing power survive the Gulf capacity return?

On Asia-Europe, the forwarder pointed to easing pressure. "Emirates, Etihad, and Qatar Airways are maintaining substantially more normal operations, providing improved access to the region, and restoring a good deal of the capacity lost during the initial disruption earlier this year," the forwarder said.

"There have been signs of stability in Asia-Europe rates of late. OK, they're more than 10% higher year on year at the moment, but well short of the levels we saw earlier this year."

The forwarder flagged renewed geopolitical risk: escalation between Saudi Arabia and the Houthis, and concerns over a resumption of the US-Iran conflict, mean Gulf carriers are again assessing what lies ahead.

Lufthansa Cargo enters the fourth quarter with year-to-date EBIT of €361m and management expecting full-year 2026 earnings comfortably above €500m, an outlook that hinges on transpacific demand and tight Far East-North America capacity outlasting the restoration of Gulf competitor capacity on Asia-Europe.