For decades, Luxair Cargo has been the leading air freight handling agent at Luxembourg Findel Airport (LUX), making it the eighth largest cargo platform in Europe. The facility offers the capacity to process 1.2 million tons per year. In an interview with the TV station RTL, the management has now announced that it will be exiting the freight business, after exactly half a century of operations!
The main reasons for stepping out of freight handling are based on strategic considerations, says the airline. Carrier Luxair wants to focus on its passenger business, network, and fleet issues, argues the management.
However, local sources claim that the step is primarily based on financial considerations, because the Cargo Center needs to be modernized at a cost estimated to be in three-figure millions. Insiders speak of at least 200 million euros required for refurbishing work. Money that the Luxembourg regional airline obviously lacks. Against this background, Luxair's Board of Directors recently decided not to participate in this year's public tender to operate the cargo facility for an additional seven years. When asked for a statement, the company’s communication department denied any comment: “In the context of the current public market [situation], Luxair will not comment on this [issue],” the email reads.
Currently, a public tender is underway. According to local forwarding agents, Cargolux (CV) is the hottest candidate. A decision in favor of Cargolux would make a lot of sense, said an anonymous contact, because it would allow CV to handle its own consignments which account for about 80% of the entire air freight passing through Findel Airport. At the same time, shipments contributed by third party carriers could be managed by a second handling agent. Cargolux’s Head of Corporate Communication, Moa Sigurdardottir, was not available for a statement.
Two is better than one
This splitting of handling responsibilities would also make sense under EU competition rules because airlines serving LUX would have an alternative to the market leader, Cargolux Handling Services, or whatever the new company will be called should the tender be decided in Cargolux's favor.
The1996 erected Luxair Cargo Center comprises 58,000 m². It offers cool rooms for temperature-sensitive items such as perishables, pharmaceuticals, or medical goods. In 2001, a 12,500 m² Logistics Center was added to the facility, and in 2007, the warehouse was enlarged by another 9,500 m².
1,200 jobs are affected
The current infrastructure provides automated stacking, retrieval and loading for up to 1,640 load units. A dedicated 90,000 ft² ramp area, located adjacent to the Cargo Center, allows for the simultaneous handling of up to eight wide-body cargo aircraft. A fully loaded Boeing 747-400 or B47-8 freighter can be unloaded and reloaded in just two hours. The building is equipped with 113 truck docks, offers 1,640 ULD stacker positions, 49 pallet build-up/integration stations, and 35 automated breakdown stations.
In 2001, 821,000 tons were processed at the facility. This is a decrease of 32,354 tons compared to 2019. Staff-wise, 1,200 people are employed by Luxair Cargo. The most demanding task of the two local trade unions, OGBL and LCGB, is to safeguard the jobs in the upcoming negotiations concerning the change of ownership.
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