Dirk Reich, Cargolux President & CEO gave an enlightening presentation of his company under the heading of “From Luxemburg Hub to a True Global Network,” at Germany‘s Air Cargo Club (ACD) yesterday evening.
Cargolux has been in the air for 45 years and the CEO’s presentation was both nostalgic and informative for his audience as regards the way forward for the LUX based carrier in the future.
Mr Reich, although rather new to CV, having taken over from Richard Forson in March 2014, has held among others, senior positions in the past at Kuehne & Nagel International and Lufthansa.
He took up the reins last year and since then has put much time and energy into steering CV’s new direction.
This was the centre point of his presentation:
Past nostalgia and fleet development
He opened by referring back to what many of us would consider as “the good old days.”
Cargolux’s start up using the venerable old Canadair CL-44 Swingtail Freighter and his reference to the good relations to German Cargo Services, the predecessor of today’s Lufthansa Cargo.
The carrier did not hold onto the CL-44s for too long and in 1973 acquired their first DC-8 freighter aircraft. The DC-8 fleet, he explained, was in operation until 1984 where by then the airline was already operating to more than thirty destinations.
The rapid network expansion led to the introduction of CV’s first Jumbo Freighter in 1979. This was a Boeing 747-200F.
Reich also explained that the carrier was proud of the fact that they were the first operator for the advanced Boeing 747-400F.
This aircraft became their “work horse” for many years to come.
Expansion continued rapidly and Cargolux Italia was founded in 2008 and the first of the brand new B747-8Fs was placed into the fleet in 2011.
Mr Reich explained to his audience that CV has in the past five years invested US$2.5 billion in their fleet program.
The carrier now serves over 90 destinations on six continents with a mixed fleet of B747-400Fs and B747-8Fs which will by the end of this year total 25 aircraft. The latest B747-8F will join the fleet at the end of this month.
Dual Hub Strategy is the key
Dirk Reich stated that “it’s relatively easy to obtain financing to buy aircraft, but generating enough revenue to pay for them is a different matter.”
Cargolux is pushing ahead with their Dual Hub Strategy.
This refers to their LUX hub and the newly opened Chinese hub in Zhengzhou (CGO).
The latest shareholding picture shows that HNCA has a 35 percent share in CV and the remaining 65 percent stays in Luxembourg, spread between Luxair, the state and financial institutions.
The goal is to have three daily flights running between LUX and CGO.
There is talk of the Zhengzhou regional government also creating a new cargo carrier within the region.
Cargolux sees this Chinese region as being very important for their future growth. Zhengzhou is ranked as number 5 on the Chinese GDP list and is presently busy with building a massive new airport complex which, when finished, will also provide capacity for 800,000 tons of airfreight per annum.
Germany, an important area for CV
CV claims to have an 8 percent market share in Germany and growth there for the airline in 2015 is estimated to increase by almost 17 percent. The company has six offices including the German HQ in Frankfurt and operates a weekly Atlanta - Munich flight also.
Christian Thiele, who was until recently Cargo Business Development Manager with Emirates in FRA, will take over as of October as CV’s new German country manager.
He reports to Anthony (Tony) McNichol who is the Cargolux Regional Director for Germany, Austria, Hungary, Switzerland and Central Europe.
A bright outlook but much hard to be done
That’s basically how Dirk Reich looks at CV’s future.
The hub strategy plays a leading role and placing new gateways within this structure is - he says - of utmost importance.
The company is looking closely at new transpacific routes to supplement the Anchorage and Chicago airport hubs.
Kuala Lumpur and Singapore would possibly fit into this strategy he noted.
Emphasis will also be put on building up a Chinese trucking network. This he sees as being important and the company can draw on its experience with the European RFS network which he stated is served by 68,500 trucks, incorporates 439 destinations and, moves 441,000 tons p.a.
ACMI and CMI services as well as humanitarian flights and more full charter work can lead to a far better fleet utilization Mr Reich states.
Cargolux is pushing hard to place their eight main customer products even further. These range from CV Classic, CV Heavy, CV Hazmat to CV Pharma.
There is even a small e-Commerce experiment in progress whereby CV supports the transport of produce, namely milk, olive oil and wine into the Chinese market.
Who knows! - it may catch on big time.
Air Cargo Club News
- Winfried Hartmann, the German ACD President announced at yesterday’s sitting that the club is looking at various possibilities to highlight the ACD presence at next year’s World Cargo Symposium which will be held in Berlin in March 2016.
- Furthermore, the ACD has now completed its new homepage and members are invited to give their comments and suggestions.
- The club will also issue an online questionnaire to their members and would be grateful if all would take a few moments to place their comments.
- The October sitting will deviate from the usual 2nd Tuesday of each month and be held on Monday 5 October in the HOLM building in Gateway Gardens. Speaker will be Joost Hellmann, CEO of Hellmann International. Members can also “try and fly” as there will be a Boeing 737 simulator on hand for those who’d like to pilot for a while
John Mc Donagh