DHL Group is streamlining its air cargo operations by reducing partnerships with third-party airlines to eliminate excess capacity and enhance efficiency. This move is part of the company’s “Fit for Growth” initiative, aiming to cut over $1.1 billion in annual structural costs by the end of next year.
Operational Adjustments and Financial Performance
Despite a 7.1% decline in demand for time-definite international parcels, DHL Express reported a 4.8% year-over-year increase in operating profit, reaching $754 million in the first quarter. Improved capacity utilization, seasonal network adjustments, and higher yields contributed to this performance. Additionally, aviation supply costs for DHL’s fleet and purchased transportation decreased by 7%, and operating costs at Express air hubs fell by 1%.
Changes in Airline Partnerships
In line with its efficiency goals, DHL has ended several air cargo partnerships. Notably, the company withdrew from its joint venture with Polar Air Cargo, operated by Atlas Air, after 18 years. DHL also terminated its contract with SmartLynx Airlines, which had been leasing four Airbus A321 converted freighters to DHL in Europe. Following this, Slovakia’s AirExplore discontinued its cargo operations, having started services for DHL in early 2024.
Fleet Modernization Efforts
DHL continues to upgrade its intercontinental fleet, with Boeing expected to deliver six 777 production freighters this year, completing a 28-unit order. In Asia, Air Hong Kong, a DHL partner, is modernizing its fleet by replacing Airbus A300-600 freighters with larger A330-300 converted freighters, enhancing capacity and efficiency.
Leveraging Technology for Productivity
The “Fit for Growth” program also focuses on leveraging technology across all divisions to improve productivity. Management reports that these technological advancements are already yielding positive results in sortation centers and pickup and delivery operations.