Cargolux flies high on recovery and new fleet
To say the last couple of years have been trying times for the air cargo industry would clearly be an understatement and no carrier's experience more typifies these trials than Luxembourg-based maindeck cargo carrier Cargolux. Donald Urquhart reports.
March 1, 2011
The problems faced by Cargolux – the severe air cargo market collapse instigated by the global recession in late 2009/10, production delays to Boeing’s new 747-8 Freighter and airfreight cartel charges which have included substantial fines and US grand jury indictments against two of its top executives – have, in varying degrees also been experienced by other major players in the industry. But with the market recovery stabilising and a new timeline established for delivery of the first of its substantial order of 13 B747-8Fs, at least two of these problems have found some degree of resolution for Europe’s biggest all-cargo carrier and the 9th largest air cargo carrier in world. More than 40 years of experience in the industry clearly helped Cargolux navigate the turbulence of the recession. Speaking to Payload Asia, Cargolux’s new president and CEO Frank Reimen said the crisis did not have a fundamental lasting impact on how the carrier does business, but added however, “it changed various aspects in our customer relationships. “Rate changes tend to be more frequent and contracts periods tend to be shorter. Also, we are aiming to keep our capacity commitments (e.g. leases) more flexible,” he said. But he notes Cargolux is not alone on these impact as they also apply to the industry at large. “Furthermore, it reminded us all that aviation business is a very tough one: We are dealing with a high degree of fixed costs vulnerable to economic swings and we are exposed to pure, global competition. It is not a place for the faint-hearted.” The recovery for Cargolux, in Reimen’s words, was “quite good”. “We were able to bring yields back to levels where they need to be in order to operate, profitably. This translated to a load factor in 2010 (FTK/ATK) of over 73 per cent reflecting the strong market Cargolux was operating in. “Keep in mind with load imbalances, commercial off-loads in the Middle East on the way to Asia etc. it is hard to exceed this number.” Overall volumes were up about nine per cent up versus 2009. “As a negative point, we were not able to adapt capacity quickly enough, largely due to delay in delivery of our new B747-8’s.” The first delivery of these new generation jumbos – almost six metres longer than their cargo market defining predecessors with an increased capacity to 148 tonnes of payload with 17 per cent better fuel efficiency – has now been pegged to the middle of this year.