Cargolux close to launching “Cargolux China” jv

In a wide-ranging interview in CargoForwarder Global, Cargolux CEO Dirk Reich confirmed that the company is on track to launch a China-based joint-venture carrier.

Those of you who followed the Cargolux saga last year may remember that one of the stipulations of the agreement that saw Henan Civil Aviation Development and Investment Company (HNCA) take a 35% share in the Luxembourg-based carrier was that the parties would work toward setting up a new carrier based in Zhengzhou. Most of the media focus at the time was on the “dual hub” strategy, and the requirement that Cargolux operate four weekly Luxembourg-Zhengzhou frequencies. But, as we reported then, the agreement also included a requirement that the parties would incorporate a joint venture at Zhengzhou, if an analysis of its commercial viability was positive.

The time limit on the decision was one year, and while there are still two months to go, Mr. Reich appears to be convinced not only that the decision will be taken to form the joint-venture carrier, but that it will be much more than the regional feeder operation that most industry observers expected it to be – that it will be a long-haul trans-Pacific carrier with its own fleet of 747 freighters.

The original interview in CargoForwarder is online here, but we summarize the main points below:

• Mr. Reich said the decision to launch the carrier, which will be named Cargolux China, has been made, but that the details have not yet been worked out. In his words, the decision is not “if,” but rather “when” and “how.”

• Two options are currently on the table: A small carrier focused on providing feeder service to/from the Zhenhzhou hub, and a more ambition plan to set up an intercontinental carrier focused on trans-Pacific and intra-Asia service. Mr. Reich said he favored the second choice, but added that it was possible a third option – a carrier which combined both of the first two options – might be chosen.

• The new carrier will be managed by Cargolux, and Cargolux will act as global GSA.

• The Chinese government backs the project.

• The fleet, assuming the long-haul option is chosen, will likely be 747 freighters, but Mr. Reich said 777Fs were also under consideration. If the feeder option is chosen, either on its own or in conjunction with the long-haul option, 737 freighters would be acquired.

Does the idea of a major European cargo carrier forming a long-haul joint venture based in China to serve the trans-Pacific market remind you of something? Something that went by the name “Jade Cargo International?” Jade was a joint venture of Lufthansa Cargo and Shenzhen Airlines. It acquired, and briefly operated, six 747-400ERFs, but the partners – later including Air China, which had acquired Shenzhen Airlines – were often at loggerheads and it wasn’t long before the Jade fleet was grounded and the joint venture dissolved.

Mr. Reich said he was very much aware of what happened with Jade, but that Cargolux and HNCA were pursuing the goals of their agreement without any friction, and were not in danger of repeating the mistakes that led to Jade’s demise.