The once ailing cargo carrier, set back by many internal and external conflicts as well as persistent financial losses, sees light at the end of the dark tunnel. The November results, now presented by the company, look very promising. They underpin the airline’s performance shown since the beginning of this year and indicate a promising future.
Record sales in 2014
Cargolux’s management is in good mood, so are presumably the majority of the employees after having noticed the latest November figures published by their company. These are encouraging, to say the least, making the word ‘upswing’ becoming the most heard statement at CV.
According to the airline, block hours have increased considerably and reached 10,224 hours, 8.7 percent higher than in November 2013. The carrier’s fleet of currently 22 Boeing 747-8Fs and 747-400Fs flew 1.766 cycles, which is another all-time record for Cargolux. Also, the November tonnage went up by 3.1 percent year-on-year, totaling 76,504 tons. That’s more than in any other month in the 44 year history of Luxembourg’s flag carrier.
The tonnage figures look even better: Since the beginning of this year, CV grew its tonnage double-digit by an astonishing 10.5 percent against the first eleven months in 2013. The carrier also announces a continuously high daily aircraft utilization rate at 15.52 hours per day for the entire 22 units in its fleet. A proud Cargolux states in their press release: “This is one of the highest utilization rates in the industry, if not the highest.”
Having said this and when looking at the latest figures the question is, what exactly caused this obvious and for many observers quite unexpected turnaround.
Not so for Cargolux’s CEO Dirk Reich, though. Asked to identify the main reasons of this upswing he mentions the “great customer support in challenging times, the enormous team spirit of CV’s workforce” and – above all – the “$400 million investment in Cargolux by the shareholders in 2014 alone.”
High market demand for CV charters services
Particularly the peak season gave his airline’s biz an additional kick with demand for charter capacity mainly on transpacific trade lanes running high, including flights between Chile and China. This demand for extra uplifts of goods was caused to a great extent by the congested port of Los Angeles that caused a number of forwarders to change their strategy by transferring some of their ocean freight to air. For CV this resulted in 22 transpacific charter flights by Boeing 747-8Fs and B-400Fs since September.
Further to this Reich mentions the dual hub strategy of his airline, generating additional tonnage transported both ways between Luxembourg Findel Airport and Zhengzhou Xinzheng International.
Zhengzhou-Chicago is next on the agenda
Currently, CV operates five scheduled flights on this route complemented by charter capacity if required. Touching on the intended inception of Zhengzhou-based subsidiary Cargolux China he indicates that the final decision on this project is expected to be taken during next year’s first quarter, with the maiden flight of the new carrier taking off sometime in 2016.
Reich announces that the scheduled LUX-CGO-LUX flights will be upped from 5 weekly to daily simultaneously with new services between Zhengzhou and Chicago beginning next March.
In contrast, the project of integrating a German airport on flights en route from LUX to CGO has been postponed for the time being. States Dirk: “The demand from/to Luxembourg is presently so high, that we have no capacity to operate additional flights from or to Germany.”
As to the expected total tonnage carried by CV in 2014 he says that it will be “significantly above 800,000 tons.” In contrast to this disclosure he leaves open if fiscal 2014 will be a financial turning point for his airline to get out of the red and into the black. “No comment” is the only comment tight-lipped Dirk Reich delivers.