LUFTHANSA Cargo has announced an operating profit of EUR81.5 million (US$108.54 million) for fiscal 2006, a marked decrease from 2005's EUR108.2 million.

The weaker performance comes after Lufthansa agreed in September 2006 to pay US$85 million in the US and US$5.3 million in Canada in out of court settlements, relating to class-action lawsuits filed over price-fixing allegations. The one-off payments are subject to court approval.

The company also blamed the depressed results in 2006 on high fuel expenses, which climbed from EUR421 million in 2005 to EUR497 million in 2006.

Revenues for 2006 grew 3.4 per cent year on year to EUR2.85 billion on the back of a 2.7 percentage point increase in its cargo load factor to 67.7 per cent.

Freight volumes in 2006 were up on the previous year's level by 1.3 per cent to 1.76 million tonnes of cargo and mail. Sales rose by 3.5 per cent to 8.1 billion tonne-kilometres. Yields fell on the prior-year by a marginal 0.4 per cent, while traffic revenues increased by 3.6 per cent to EUR2.7 billion, a company statement said.

Looking ahead, Lufthansa Cargo sees "outstanding" prospects for growth in Asia, particularly India and China as their airfreight markets have been growing at an annual rate of up to 10 per cent.

In the summer, Lufthansa Cargo will increase its freighter frequencies to Shanghai and add Lahore in Pakistan to its freighter network. It is additionally expanding its network to South Korea with the addition of Busan as a new destination, which will be served by thrice-weekly flights operated from Munich by Lufthansa passenger aircraft.