Cargolux calm over Asian competition

Like other European carriers, Cargolux is seeing its market share threatened by new Asian freighter services. But it reckons it has a secret weapon in the 747-8, as Peter Conway reports.

These are trying times for the big European freighter operators, faced with soaring fuel costs and growing competition from Asian carriers. The past year has, for example, seen expanded flights into Europe by such established players as Korean Air and Cathay Pacific, and new entrants such as Jade Cargo International,Great Wall and Jett8.

Against this, the European operators can seem a little leaden-footed. Not for them the massive surges in capacity and flood of new routes. Instead, they tend to stress caution and a focus on quality and service. But is this enough to stop them losing market share?

Foremost among Europe’s freighter operators is Cargolux, and its senior vice president sales and marketing Robert Van de Weg has nothing very cheerful to say on the growing Asian competition.

He admits that Asian carriers are introducing lower prices and putting pressure on yields. “It makes the European carriers and their hubs more vulnerable, that is certainly true,” he says. “We still have our growth plans, but I am not sure about the business models of all the other carriers. In the next five to ten years we will see big changes in the industry.”

That being said, Cargolux is not performing badly when compared to its European peers. In the first seven months of 2007, its traffic, measured in freight tonne kilometres, was up 5.8 per cent, according to the Association of European Airlines, better than four per cent for Air France and 2.7 per cent for Lufthansa.