OREANDA-NEWS. In its 45th anniversary year and against a background of low yields, continued overcapacity and declining volumes, the Cargolux Group performed extremely well, achieving record levels of tonnage and block hours and ended the year on a net profit after tax of US$ 49 million. The company outperformed not only the market, but also its direct competitors in Europe who, in some cases, retired freighters or reduced their air cargo activities.

“It is a sign of our company’s strength that, despite the energy we needed to achieve a CWA compromise, we managed to achieve a significant boost in our performance and a healthy profit, contrary to most of our European competitors,” says Dirk Reich, Cargolux President & CEO. “While this excellent result benefitted from a reduction in fuel costs, it is in large part due to the hard work of our people, as well as our strategy and the corresponding measures that we began to introduce in 2014 in order to reduce our costs.”

Cargolux in 2015 not only launched a strong product portfolio but also introduced a bold vision for the future: to be the Global Cargo Carrier of Choice. As a significant boost of its customer orientation, the new product portfolio continues to build on Cargolux’s existing core competency, pushing global consistency and leveraging on the evolution of its global presence. In doing so, the company increased the share of specialized products in its portfolio, further focusing on industry-specific needs by thinking beyond the flight and responding to the requirements of customers with the expansion of door-to-door service across China.

Business Overview

The Cargolux Group in 2015 grew its freight tonne kilometers (FTK) by 8.7%; the company currently ranks at No. 7 among the world’s cargo operators, according to IATA data, and is the largest all-cargo airline in Europe. The airline positioned itself above the average growth rate of IATA’s top 20 air cargo carriers.

In 2015, Cargolux carried 889,652 tonnes of freight on its global network, 7.4% more than in 2014. With 26 Boeing 747 freighters at year-end, a mix of 747-400 and 747-8 freighters and the largest fleet in its history, Cargolux achieved a record 114,792 block hours, an increase of 8.8% over the all-time high in 2014.

The average load factor remained fairly stable at 65.9%, even with a larger fleet and increased capacity. The Group’s average market share in 2015 grew to 3.8%.

 China Focus

For Cargolux, its complementary Chinese hub, Zhengzhou, was a major focus during 2015. Flights increased to 13 per week by year-end and the company introduced transpacific services between Zhengzhou and Chicago. By the end of 2015, Cargolux had flown over 65,000 tons of freight to and from Zhengzhou.

In early 2016, the Cargolux Board of Directors approved an investment of US$ 77 million for ‘Cargolux China’, the new joint venture Chinese cargo airline based in Zhengzhou.

‘Cargolux China’ is expected to start operations in 2017, focusing on transpacific and intra-Asian routes. Its fleet is planned to grow to five 747 freighters within the first three years of operation.

A new CWA

After 18 months of intense negotiations, Cargolux and its social partners OGB-L and LCGB agreed on a new collective work agreement for the airline’s Luxembourg-based staff on 16 December 2015. It is valid for three years. With the new CWA, the partners have achieved a significant improvement in the flexibility and economic efficiency of Cargolux while sending a strong signal for job security and increased competitiveness of Luxembourg as a logistics hub in Europe. Together, all parties have expressed their commitment to move forward, to defend Cargolux’s leading market position in Europe and continue to drive its growth in Asia with the implementation of the dual hub strategy.

“I want to explicitly thank everyone in the Cargolux family for their continued dedication and hard work,” Mr. Reich notes. “The long discussions with our social partners have helped us to come out a stronger company with a better comprehension of each other’s needs and concerns. This understanding, this passion for our work, keeps Cargolux at the top of the game and it is due to the little things that every single one of our staff has contributed.”

“Spreading our wings for a global reach underlines our vision of being the Global Cargo Carrier of Choice and supports our strategy to grow our activities from a single hub in Luxembourg to multiple hubs and gateways in Zhengzhou, Milan, Hong Kong and Chicago. We will continue to expand our network and, with Cargolux China getting primed for take-off, we go wherever our customers want us to go, be it with Cargolux Airlines, Cargolux Italia or, in the future, Cargolux China.”