Cargolux punches back

For the last two years, Cargolux has been the air freight industry’s favorite punching bag. Now it appears to be punching back.

The Luxembourg-based all-cargo carrier has provided an unending series of headlines for the media, and been an easy target for criticism by industry observers. Not only that, the company has been torn by dissention within, as senior executives have jumped ship, and unions have declared war on management. Even the government has waded into the battle.

Boiled down to its essence, the source of the headlines, criticism, and dissention has been the sale of a 35% share of the company to a Chinese investment group, and the consequent implementation of a Luxembourg/Zhengzhou dual-hub strategy. A strategy that, in the view of many in the industry, could never work. A strategy that would see a once-proud carrier gradually (or not-so-gradually) lose market share and eventually decline into irrelevance.

But today Cargolux released preliminary figures for 2014, and the news is anything but bad.

• Revenue up 10.1%

• Volume up 9.9%

• Traffic up 11.2%

And the bottom line? Full financial and operational details have not been released, but Cargolux said it would report a 2014 net profit of about US$3 million. Not huge, but the company said the profit would come despite a $40 million fleet impairment charge, and provisions for the potential payouts resulting from the various anti-trust actions ongoing against many cargo airlines.

As mentioned, full details of Cargolux’s 2014 performance have not been released, but it is interesting to compare the preliminary data with similar data from Lufthansa Cargo, which is generally considered to be the best-run, and most successful cargo operation among the big European combination carriers.