Christian Cavez, Vice President Enterprise & IT Services of CHAMP Cargosystems, left the company this weekend (15MAY21), internal sources confirmed to CargoForwarder Global. The departure of the right-hand-man of former CEO Arnaud Lambert has a signaling effect: a cleanup operation seems to be under way. Prior to Cavez, some other managers based in the company’s Luxembourg headquarters also left the 2003 incepted supplier of integrated IT solutions to the air freight industry. Not all of them voluntarily.
‘A new broom sweeps clean’ is a well-known proverb. In relation to CHAMP, this means that under the leadership of CEO Chris McDermott, who took office in OCT20, a thinning out of personnel has begun at the company headquarters located in the Grand Duchy. Whether this has boosted the morale of the remaining employees, all specialists in their field, is doubtful.
However, an internally circulated message that Cargolux (CV) has gone to market in search of a new IT architecture to be built and hosted by an external provider other than CHAMP, is likely to have had an even more disturbing effect on the remaining CHAMPions.
Although this intended step has not yet been officially confirmed either by the airline or by CHAMP, CV’s considered move is a toxic topic laying on CHAMP’s table, as has been confirmed to CargoForwarder Global by credible sources close to the case. The situation is aggravated by the fact that Cargolux is not just any customer: it is the founder of CHAMP Cargosystems (formerly CARGOLUX SYSTEMS S.A.), and remains its second largest stakeholder (49%) next to Geneva, Switzerland-based majority owner SITA (51%).
Even before Mr. McDermott took office, it became apparent that CHAMP would have to revise its own business model. The scope of e-Cargo solutions needs to be expanded, market participants hold, and the company’s traditional and at times extremely successful community integration platform Cargospot has fallen short of what competitors are able to offer. Newcomers like IBS, SmartCargo, or Cargoflash, for instance, have gained a lot of ground lately and won important tenders.
Conversely, CHAMP lost core customers such as American Airlines Cargo, combined with futile attempts to contract heavyweights like Asiana, Etihad, Korean, or Lufthansa Cargo, who all preferred to rely on IT services rendered by CHAMP competitors; primarily India-based platform IBS Software.
“CHAMP is not customer-centric enough, is inflexible in its product offerings, and does not provide tailored support,” a leading aviation manager told CargoForwarder Global shortly before Mr. Arnaud departed the company last fall. Things don’t seem to have changed since then.
Will CV quit CHAMP?
Last year, Cargolux was rumored to be developing its own IT platform. But plans appear to have been shelved meanwhile. The step would cost a fortune, tie up a lot of technical expertise, and require a longer development time until the system is ready for use. Even the record profit flown in 2020 by Cargolux (US$768.7 million) is unlikely to reanimate these plans.
It can therefore be assumed that the responsible CV executives are knocking on the doors of providers such as Unisys or IBS, i.e., evaluating concepts to having a tailored IT architecture built by them. In any case, this would be scoring an own goal financially, because if CV were to rely on the service of an external IT provider, it would drastically reduce the value of CHAMP, CV’s own investment subsidiary.
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