Lufthansa Cargo lifts yields 14% as pricing power runs through Q3

Lufthansa Cargo pushed base yields up 14% year on year in the third quarter, and overall yields rose 22%, as tight capacity and robust demand handed the carrier rare pricing power in what is normally airfreight's weakest quarter.

The financial follow-through was immediate. Adjusted EBIT more than tripled to €162m ($182m), with margin climbing to 15.6%, from 6% a year earlier. Global revenue grew 26%, with growth spread across regions, and revenue from temperature-controlled freight jumped 33% year on year.

Group CEO Carsten Spohr told analysts on a conference call in Frankfurt that the strength reflected a very robust demand environment, achieved despite the seasonal trough.

"Capacity increased by 5%, driven by double-digit growth in belly capacity, 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," he said.

So the carrier flew more, filled the aircraft better, and charged more per kilo. All three levers moved the same way at once — which is why the EBIT line tripled rather than merely improved.

Where is the demand coming from?

Spohr flagged Asia-Pacific as the demand engine, with India standing out as a key growth market, and said transpacific flows are becoming increasingly important for Lufthansa Cargo — despite the carrier sitting, in his words, "on the other side of the world."

The demand mix is twofold: express deliveries on one side, high-margin verticals on the other. He named semiconductors, IT equipment, pharma and automotive.

The group's own Q3 review put the yield surge in context, citing "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, plus sharply higher fuel costs — which the carrier successfully passed on — drove yields significantly above previous quarters. Ex-Asia yields stayed robust despite de minimis pressure on that flow.

Spohr summed up the structural case: Lufthansa Cargo "continues to benefit from current supply chain disruptions around the world, but has also structurally improved its positioning by focusing on those markets and products that matter most in the air freight business and create the highest yields and value."

What does Middle East capacity mean for rates?

Not all trades tell the same story. One forwarder told The Loadstar the drivers of cargo carriers' pricing power, and the implications of returning Middle East capacity, differ sharply between 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 explained.

In short: transpacific tightness is demand-driven and untouched by Gulf disruption. Asia-Europe is a different calculation.

There, the forwarder said, Emirates, Etihad and Qatar Airways are maintaining substantially more normal operations, restoring a good deal of the capacity lost during the initial disruption earlier this year and improving access to the region. Asia-Europe rates have shown signs of stability of late — still more than 10% higher year on year, but well short of the levels seen earlier in the year.

The caveat is geopolitical. Escalation between Saudi Arabia and the Houthis, plus renewed concerns over a resumption of the US-Iran war, mean Gulf carriers are again wondering what lies around the corner.

How long can the earnings run last?

Group CFO Till Streichert told analysts Lufthansa Cargo's year-to-date earnings had reached €361m, with further upside expected.

"Adjusted EBIT of Lufthansa Cargo is likely to comfortably surpass €500m in full-year 2026, with possibly even more positive dynamics. While this upside potential is very likely to materialise, a high degree of uncertainty still remains, as visibility in the air freight business is usually limited to about two weeks booking in advance," he said.

For shippers and forwarders, the message from Q3 is that capacity discipline plus disruption-driven demand is still supporting record-level yields — and unless Gulf escalation flares again or hyperscaler demand cools, that pricing power looks set to carry into 2026.