CV Fleet Will Not be Moved to Italy…

…assures CEO Dirk Reich of Cargolux Airlines in reaction to recent allegations raised by Luxembourg’s Pilot Association A.L.P.L. In their statement they had accused the carrier’s management to push a cost savings program ahead that includes the partial outsourcing of freighters by transferring the aircraft to Italy. It’s all false alarm, declares Helmsman Reich.

„The only way to ensure CV’s the long term success is to grow at lower costs,” says CEO Reich  /  source: hs
„The only way to ensure CV’s the long term success is to grow at lower costs,” says CEO Reich / source: hs

Q: Dirk Reich, on 25 September Cargolux intends transferring a Boeing 747-400 freighter from its current home base Luxembourg Findel to Milan Malpensa Airport, operating under an Italian AOC in future. What are the reasons behind this decision?

A: We intend to increase our market share in Italy by offering additional flights for example via Russia to China and to the USA.

Q: Luxembourg’s pilot association A.L.P.L. fears that the upcoming transfer of the freighter to your offspring Cargolux Italia opens up a flood door for more aircraft to be outsourced. Is their assumption justified and do you intend basing additional freighters in Milan?

A: Cargolux Luxembourg shall receive one additional 747-8F in September, increasing the total fleet to 22 747 aircraft. At that stage one of the older 747-400 will be transferred to Italy to expand our local operation – so from a Luxembourg perspective, this is a swap from old to new and not a downsizing of the existing operation. Cargolux is in the middle of an ambitious growth plan, having employed 50 new crews in Luxembourg (now 450) and 25 new crews in Italy (now 50) in both locations. So for the first nine months of 2014 both locations Lux and Mil grew considerably both fleet as well as market share.

Q: The pilots refer to an intermediate report presented by law firm Janezic & Schmidt in which the necessity to base freighters at Milan airport for operating flights to the USA or destinations in Middle and Far East is clearly denied. They conclude these services could be conducted by Luxembourg licensed aircraft on legal basis. What’s your take on this?

 

A: This is wishful thinking: Unluckily for all European Airlines there is not only the general, legal view but there are also the practical, day-to-day negotiation of bilateral treaties between the European countries. Even if all European countries would fully implement the latest European agreements and intend to treat all airlines equally (which they don’t) it still does very much depend on the interest and relationship with the other side. All non-European countries are still able to conduct bilateral negotiations and as such not much will change until we eventually will have a global open sky policy. So in short: Cargolux Italy has traffic rights that Cargolux Luxembourg does not have and vice versa.

Soon, a second 747-400F will display the name ‘Cargolux Italia’ on its hull  /  source: CV Italia
Soon, a second 747-400F will display the name ‘Cargolux Italia’ on its hull / source: CV Italia

Q: The A.L.P.L. says that dissolving your Italian offspring would be the best solution for saving money and streamline both operations and administrative activities by concentrating everything in Luxembourg Findel. Is their assumption erroneous?

A: From an extremely short-term perspective they are right. In the short term, Cargolux could improve the financials by closing down all negative routes, some of which are flown also from Italy. Such a measure would lead to less employment both in Luxembourg and in Italy though and cause a long term financial problem; I am therefore surprised by such a proposal from the unions. The only way to ensure the long term success of Cargolux is to secure growth at lower costs. I am convinced that ultimately everybody will understand the drastic changes in the airfreight market and the need to respond appropriately to the challenges that we face.

Q: Which steps does the Cargolux management plan to take to better the internal working atmosphere that seems to have been impaired by the assumed fleet outsourcing intentions and reach an accord with the pilots?

A: You have to differentiate between the internal working atmosphere at Cargolux and the need of union representatives to create public support for keeping today’s working conditions in place. Our employees on the ground and in the air are highly professional and experienced individuals. They work with dedication and passion and they understand the financial pressure and drastic market changes. Many of the pilots have experienced grounding at one of their previous employers and we all want to avoid this situation. Also, the management has not cancelled the existing collective work agreement but asked the pilots for their proposals on how to enhance productivity. The working atmosphere is good and I am confident that there is a common intention to come to a mutually acceptable agreement as soon as possible. All parties are aware of the need for change and realize that it is in everybody’s interest to find a compromise.

Q: There are rumors Chinese investor HNCA plans upping its CV shares from currently 35% to 49%. Can you confirm these intentions?

A: These are rumors; there are no such plans.

Heiner Siegmund

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