Cargolux sees 2015 profits soar but revenues slide

All-cargo airline Cargolux saw profits and airfreight volumes surge in 2015 but revenues and load factors declined.
The Luxembourg-based airline saw profits increase to $49m in 2015 compared with $3m in 2014, while demand jumped by 8.7% year on year to an estimated 6.9bn freight tonne km.
It is the third year in a row the airline has recorded a profit, while its year-on-year demand increase beats that of many of its rivals.

The airline said results came against a backdrop of “low yields and continued overcapacity and declining volumes”.
“The company outperformed not only the market, but also its direct competitors in Europe who, in some cases, retired freighters or reduced their air cargo activities,” it said.
However, it wasn’t all positive news for the airline as its 2015 average load factor (for table, see end of article) slipped by one percentage point to 65.9% − the fourth year in a row aircraft utilisation has declined – and revenues slipped by 11.5% year on year to $1.9bn.

While it didn’t provide an exact reason for the revenue decline, other airlines have named lower fuel price surcharges, yield declines and currency effects as reasons for lower revenues.
Load factors were affected by increased capacity as it took delivery of two Boeing 747-8F aircraft bringing its fleet total to 25 freighters, including four operated by Cargolux Italia.
It also pointed out that the results came while it was negotiating a new collective working agreement (CWA) with pilots.
Cargolux president and chief executive Dirk Reich said: “It is a sign of our company’s strength that, despite the energy we needed to achieve a CWA compromise, we managed to achieve a significant boost in our performance and a healthy profit, contrary to most of our European competitors.
“While this excellent result benefitted from a reduction in fuel costs, it is in large part due to the hard work of our people, as well as our strategy and the corresponding measures that we began to introduce in 2014 in order to reduce our costs.”
The airline said the development of its Chinese hub, Zhengzhou, had been a major focus during 2015.
Flights from the airport increased to 13 per week by year-end and the company introduced transpacific services between Zhengzhou and Chicago.
In early 2016, the Cargolux Board of Directors approved an investment of $77m for Cargolux China, the new joint venture Chinese cargo airline based in Zhengzhou.
Cargolux China is expected to start operations in 2017, focusing on transpacific and intra-Asian routes. Its fleet is planned to grow to five 747 freighters within the first three years of operation.
Reich said: “Spreading our wings for a global reach underlines our vision of being the Global Cargo Carrier of Choice and supports our strategy to grow our activities from a single hub in Luxembourg to multiple hubs and gateways in Zhengzhou, Milan, Hong Kong and Chicago.
“We will continue to expand our network and, with Cargolux China getting primed for take-off, we go wherever our customers want us to go, be it with Cargolux Airlines, Cargolux Italia or, in the future, Cargolux China.”


*2015 FTK estimated by Air Cargo News