Cargolux boss: No breakdown in CHAMP relationship
06 / 12 / 2018
Cargolux’s top management has denied reports of a rift with CHAMP Cargo Systems, the airfreight IT provider in which it holds a 49% stake.
Cargolux president and chief executive Richard Forson said: "There is no breakdown in our relationship with CHAMP, whatsoever."
Forson said that Luxembourg-based freighter carrier, as part of a "strategic initiative" agreed with CHAMP, will next year take in-house all of the the non-air cargo applications run by CHAMP. These functions include aircraft and crew scheduling, aircraft maintenance and some HR functions.
Added Forson: "There are about 37 different applications which are unique to Cargolux, the biggest ones being the maintenance system, the aircraft scheduling system for aircraft and crew, and SAP. None of these are the core focus of CHAMP Cargo Systems."
Cargolux will retain its stake in CHAMP and has no intention of selling said Forson, adding: "We will continue to hold our shares, and the relationship is excellent between SITA and ourselves."
SITA, which holds a 51% tranche in CHAMP, is a global air transport IT and communications specialist based in Switzerland.
CHAMP Cargo Systems chief executive Arnaud Lambert has also reacted strongly to reports that he "lost" a boardroom battle within Cargolux to retain the non-airfreight elements of his contract with a customer and shareholder, a business that accounts for 20% of CHAMP’s annual revenue.
"It is significant percentage and for sure I never like to lose revenue, but at the same time it makes sense for Cargolux to in-source, and for us to focus on what we are good at, which is the whole cargo part. Cargolux will still be one of our top ten customers, even without the non-cargo business."
He added: "I don’t think of it as a battle because, from both a CHAMP and Cargolux point of view, it has been a element of discussion over what is best for both companies. it was not about losing a battle but a strategic discussion between a supplier and a customer, and also a shareholder discussion."
There have also been reports that CHAMP has an "antiquated" system and is falling behind its IT competitors in winning new business, something rebutted by Lambert: "We have won seven ground handlers in the last year and 11 airlines in the last four years, and our customers include Cathay Pacific and Japan Airlines.
"In cargo we are basically the market leader, with 50% of the top 100 airlines being our customers, plus we have the largest ground handlers, hundreds of forwarders and more and more shippers using our solutions."
He added: "Our system has a philosophy around a true community positioning, meaning that our solutions are truly software as a service (SaaS) and every enhancement in our solutions is available to all our customers. Certain [new business] prospects do not want that and therefore choose a different business model or a different vendor for that particular reason."
On the point of antiquated technology, Lambert highlighted Cargospot, its cargo management suite which was purchased in 2008 and has undergone regular upgrades: "We are evolving our platforms with [euro] millions of investments every year, and our customers are with us in the evolution of that platform.
"Whether we have the sexiest content, maybe not. Whether we are the most efficient application, I believe that if you listen to our customers, then definitely yes. Otherwise we would not have have the largest airlines and ground handlers on that platform.
"We still win business every single year and it is an attractive solution for everybody, which we continue to evolve. We have application programming interfaces (APIs) and that is an evolution target in terms of investment."
Forson of Cargolux confirmed that the airline will "migrate slowly" across from the existing eCHAMP system to Cargospot: "In order to do that, we have been busy blueprinting our processes and optimising them before we implement them. We want to move on to something that is newer and at the same time see also what developments better enable us to interact with our customers."
Lambert, who said that CHAMP has been profitable from its launch in 2004, observed: "We forecast double digit growth for next year. The plan has been approved by the board and it sees a very bright outlook for the company.
"We are a strong and leading company in cargo software, and we continue to expand our community of customers, and to invest massively in our solution to further help them satisfy their customers’ needs and to evolve in the digital world.
"We are here and here to stay and to continue. The fact that Cargolux is taking over their non-cargo side is a normal evolution of technology."