On 13SEP19, German Aviation Regulator LBA granted CargoLogic Germany (CLG) an Air Operator Certificate. However, the Leipzig-based cargo carrier, which is legally independent but belongs to the Russian Volga-Dnepr Group, will not live to see its third birthday. "In the coming days, we will completely dissolve the company," Accountable Manager, Dierk Naether confirmed to CargoForwarder Global in an exclusive interview.
Since 11MAR22, the company's four B737-400SF (Special Freighter) aircraft are grounded. They had to stop operations after the EU, the U.S., and other governments imposed sanctions on Russia following Putin’s blatant violation of international law with the invasion of Ukraine. The freighters have since then remained parked at different airports: Helsinki, Katowice, Budapest, and in Ostrava, Czech Republic.
Prior to the embargo, they operated mainly on behalf of integrator DHL Express. However, despite high payloads and operating times, CLG never got out of the red. The fleet was too small to cover the expenses incurred in setting up a new airline. Due to its grounding, all revenues dried up. In contrast, costs kept running. Expenses for fees levied by airports where the freighters are parked, or aircraft maintenance, for instance.
Given this situation, CFG had to file for provisional insolvency on 11MAY22. As a result, most of the 96 staff were dismissed, except for a core team required to carry out the various important tasks that arise.
Lights go out
On 31JUL22, all state-granted bankruptcy compensation payments terminate, so the remaining employees will no longer receive any money come AUG22. Instead, the remaining funds are needed to settle outstanding claims from business partners, explains Dierk Naether. In view of this situation, the German Federal Aviation Authority will revoke the airline's operating license within the next few days. The consequence for CLG: “Due to the lack of a viable business perspective, we have no option but to dissolve the company,” announces Mr. Naether. This will happen next week.
Just weeks ago, the prospects for the company were still significantly better. Half a dozen potential European investors had knocked on CLG’s door, signaling their interest in taking over the company and continuing operations. However, on Thursday (28JUL22), the last bidder backed out, without delivering further specifications, said Dierk Naether.
This was the nail in the coffin for CLG, whose beginning was quite promising, although never profitable. Yet, according to its business plan, this should have changed this year when three additional, leased B737-400SFs were scheduled to join the fleet. “With this increase in capacity, we could have come out of our infancy,” the manager says. The plans were even more ambitious. By 2025, a fleet rollover was scheduled, with B737-800P2Fs or even larger freighters replacing the aging and maintenance-prone B737-400Fs.
However, none of this will happen now.
In search of a new leadership role
And what does cargo veteran Naether’s personal future look like once the CLG chapter is closed?
“Since 1990, I have been very much attached to Leipzig/Halle as an aviation and logistics hot spot. This professional journey, I intend to continue, and I think there will be interesting opportunities in doing so.” The prerequisites for this are promising, because, in addition to his job at CLG, Naether is also Deputy Chairman of the Logistics Network of Central Germany, in which a large number of companies are members. This organization, which is very much supported by the federal state of Saxony, has succeeded in developing the greater Leipzig region into a logistics and air freight center, whose dominant players are integrator DHL Express, and Leipzig/Halle Airport.
AMTES about to bite the dust
In addition to CargoLogic Germany, the Leipzig-based MRO provider AMTES is also on the verge of going out of business. AMTES is a subsidiary of the Russian Volga-Dnepr Group and is thus also subject to the Western sanctions. Its main business was keeping Volga-Dnepr Airlines' AN-124 freighter aircraft in proper technical shape and performing checks of the Boeing 747 freighter fleet operated by Volga-Dnepr subsidiary, AirBridgeCargo at LEJ and FRA. Both airlines have been banned from European skies following the Russian war in Ukraine. This means that their business model, which is based on open skies enabling intercontinental connectivity, has largely turned to ashes.
We welcome and publish comments from all authenticated users