Qatar Airways and Cargolux headed for divorce?
[Updated 19 November — see comment at the end of this post]
According to a report just published by the Reuters news service, Qatar Airways will sell its stake in Luxembourg-based all-cargo carrier Cargolux. Reuters quoted a Cargolux spokesperson as saying: “The Luxembourg and Qatari shareholders disagreed on the future strategic orientation of the airline, which led to Qatar’s decision to pull out of Cargolux.”
Qatar Airways bought a 35% stake in CV in mid-2011, and was widely believed to want to increase that stake, and to integrate the two carriers’ cargo operations. Qatar also wanted Cargolux to adopt cost-cutting measures that would have included job cuts, outsourcing of some maintenance, and possibly a reduction in its fleet size. This was met with stiff resistance from the unions representing Cargolux’s employees, as well as from some of the existing shareholders.
One must ask, however, what the Luxembourg shareholders have in mind as an alternative to Qatar Airways’ proposed changes. Cargolux is losing money, and while in the past the Luxembourg government could have simply poured money into the carrier, European Union competition law now makes state aid illegal in many circumstances. One rumor — originating in the French media — is that Russia’s Volga-Dnepr Group will step in, but it is hard to imagine Volga-Dnepr offering anything much different than Qatar Airways did.
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Update: On 19 November Cargolux publicly confirmed that Qatar Airways would indeed sell its 35% stake, that current Cargolux Chairman Albert Wildgen would resign at the end of this month, but that current CEO Richard Forson and his management tearm would continue in their posts “as they take the airline forward through this difficult phase of restructuring.”
This last is interesting, but Mr. Forson, as a former CFO of Qatar Airways, was seen by some as the leader of the Qatari move to influence Cargolux. Also interesting, though perhaps no longer related, is that former Cargolux CEO Ullrich Ogiermann has been reported by two separate sources in Europe to have taken over as head of Qatar Airways’ cargo operations.