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Cargolux posts $18.3m loss in 2011

By control on March 30, 2012

Sluggish freight traffic in the Asia-Pacific, staggering fuel prices, and delays in Boeing 747-8F deliveries crippled Cargolux’s performance in 2011, according to company officials. In addition to reporting a net loss of $18.3 million, the Luxembourg-based freight carrier decreased capacity by 1.3 percent, year-over-year, on a load factor decline of 2.5 percent.

These numbers differ greatly from Cargolux’s 2010 statistics, which showed the carrier profiting $59.8 million.

Even so, Cargolux’s revenues surged 8.4 percent, year-over-year, in 2011, totaling $1.87 billion. The carrier also saw higher cargo volumes in the Americas — particularly North America, which was propelled by capacity increases on routes to Atlanta, Houston, New York and Los Angeles.

Unfortunately, a 15.4 percent, year-over-year, decline in Asian exports and a 14.3 percent, year-over-year, drop in African freight volumes contributed to Cargolux’s lower tonnage in 2011. Such losses were partially offset by a 10.1 percent, year-over-year, surge in export traffic from the Americas and strong export volumes from Europe, namely Germany.

In total, Cargolux Airlines and Cargolux Italia transported 658,800 tonnes of freight in 2011, a 3.6 percent, year-over-year, decrease. Since the latter business segment is geared toward Asia, “it was disproportionally affected by the same dynamics as Cargolux Airlines, mainly overcapacity,” according to a press release.

Overcapacity wasn’t the only factor leading to the carrier’s $18.3 million loss, Cargolux Chairman Albert Wildgen maintained. “It is difficult to pinpoint one reason specifically, as a combination of factors impacted our performance negatively, including steadily rising oil prices, an unfavorable fleet mix coupled with higher wet leasing costs, and reduced network flexibility resulting from the delays in the 747-8 program,” he said in a statement.

In September, Cargolux “rejected” delivery of the first two of 13 747-8 freighters it ordered from Boeing. Reports indicated that Qatar Airways, which took a 35-percent stake in Cargolux in June, disagreed with contractual terms. Although Cargolux and Boeing settled their month-long dispute in October, the two 747-8Fs Boeing handed over to Cargolux were more than two years behind delivery schedule.

On March 23, Cargolux took delivery of its third 747-8F, which it plans to deploy on its Seattle-to-Luxembourg route.

Despite this development, Wildgen believes hard times are still ahead for the European freight carrier. “Looking to 2012, we expect trading conditions to remain more than challenging,” he said in a statement.

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