3 Airlines Slug It Out In Highly Profitable Animal Airlift

Manila Bulletin
April 20, 2012
By ALEX WEBB and CHRIS JASPER

An African white rhinoceros peers through the bars of its Frankfurt compound, while across the floor a Madagascan chameleon inches around its vivarium and an Andean alpaca plucks hay from a bale.

It’s not a scene from the city’s zoo but from Deutsche Lufthansa AG’s Animal Lounge, a state-of-the-art complex that’s at the center of the German carrier’s plans to dominate the most specialized part of the $66-billion air-cargo industry.

Lufthansa, Air France-KLM Group and Dubai-based Emirates, which transports thoroughbreds for Sheikh Mohammed bin Rashid Al Maktoum, horseracing’s leading owner, are competing in a high-stakes market. Premium profit margins come with the risk of an in-flight death involving a beloved family pet, top-ranked stallion or priceless panda.

“It’s not like pharmaceuticals, where your main concern is the temperature,” said Animal Lounge Director Axel Heitmann. “If a bag of fish leaks it needs replacing with the right kind of water and the right oxygen. And if something goes wrong you can’t just hand a customer $1,000 and tell him to buy another pet. He wants the dog or cat he’s had for 10 years.”

Lufthansa’s Frankfurt facility handled 110 million creatures of various varieties last year, four million more than the number of human passengers carried by the airline and its units, though the total was swollen by 80 million tropical fish and 300 tons of worms, including live bait for anglers.

Among larger guests, the Cologne-based company’s annual roster typically includes 14,000 dogs and cats, 8,000 pigs, 2,000 horses and about 150 zoo animals. So far this year the latter have included a pygmy hippo, half a dozen penguins, two pancake tortoises and a pair of beavers, as well as five rhinos.

While animal freight makes up only 1 to 2 percent of Lufthansa’s total cargo revenue, the margins on carrying beasts make it worth the risks, Heitmann said.

Lufthansa will fly three horses from Frankfurt to New York for about 4,000 euros ($5,335) per beast, or a dog to Detroit for 800 euros, according to Heitmann, who has been in charge of the company’s animal transport business for six years. That compares with 675 euros it can cost for a standard transatlantic shipment of a similar weight to a racehorse.

“This sort of niche business is more profitable than commoditized air cargo, but you need to invest a substantial amount in specialist facilities to get the returns,” said John Manners-Bell, an analyst at Brinkworth, England-based Transport Intelligence. “They’ll be looking at a much higher margin.”

Emirates cargo chief Ram Menen said in an interview that the sector is a “competitive” part of the air-freight market.