Ashwin Bhat is three weeks into the role of chief executive of Lufthansa Cargo and is already facing up to a changed environment for air freight.
Bhat takes over after the cargo business reported record operating profits for three years in a row, but since then the market has weakened with both rates and volumes declining.
“To lead that team is always humbling but also nervous because given the successes of the last two years and what the market demands are right now, it is a tough market environment,” Bhat told FlightGlobal sister publication Air Cargo News at the recent Air Cargo Europe event in Munich.
“But, you know, this is the nature of our business – it is volatile. Maybe we will be sitting here next year and talking about what a boom time it has been. That is the nature of the game we are in.
“At the same time, I know the game we are playing is long term and not short term so our focus and our investments are for the long term,” he says. “You have to make tactical decisions on how to improve your load factor and revenue and so on, that is clear, but as a chief executive have to think long term.”
Bhat joined the carrier from Lufthansa-owned Swiss WorldCargo in March 2021 as chief commercial officer and was part of the management team that put together the most recent strategic plan under the leadership of Doretha von Boxberg. So from this perspective, the airline’s long-term ambitions will stay the same.
“First and foremost, our focus is customers,” he says. To this end, the airline aims to create a seamless and frictionless experience.
“The second topic which we will really focus on is sustainability. For us, it is a commitment we have made. It is not just about air cargo, it is about the wider world and the focus on this topic will increase. We have taken a leadership role and are very open about it.”
Innovation is the next area of focus for the airline, but any investments in this area must add value for the customer or create efficiencies for Lufthansa Cargo.
People are another area that Lufthansa Cargo will look to develop further. “There is a talent war, so how do we attract talent, how do we keep the talent, but also how to upskill the people because it will be required with the changes that are happening.
“And lastly, when everything is said and done, we are a business, so we have to focus on adding value for our shareholders,” Bhat says.
Heading back to the airfreight market, Bhat says the outlook on the demand front is cloudy and hard to predict, with some customers expecting an improvement and others more downbeat.
Thrown into the mix is the arrival of four new freighters – two Airbus A321s for intra-Europe and two long-haul Boeing 777Fs – for the airline later this year.
“One thing we have to be clear on in our organisation is that we have to be very flexible and adaptable and fast,” he says. “We talk about speed but I think we also have to ingrain in our organisation speed because whatever situation happens, whether the market goes up or goes down, we have to have the speed to adapt.”
On the freighters, Bhat says that filling them will be hard work “but we believe in the relationships we have with our customers”.
“But we also will look at the market to see which destinations we want to put the aircraft into and, which are the segments we want to focus and those are the things, like every other network, we need to look into.”
While Lufthansa’s long-haul freighter fleet looks to be set for the future – the carrier will eventually have access to capacity on a total of 18 Boeing 777Fs – the carrier’s intra-European network could be expanded from the four A321Fs that will be in operation by the end of the year.
For the time being, the focus will be on integrating the latest two of the model. “As of now we want to stabilise it,” saya Bhat. “We want to get a bit more resilient about the whole topic because it was a step into the new segment of same day. It is about speed, about e-commerce.
“It is too early to say that’s it or is it more maybe next year, but we have been very happy with the development that has been happening so far.”