Tuesday, May 6, 2014

All Cargo Airline Credits Increased Freight Operations for Financial Recovery

Troubled Year Sees Better Results Than Anticipated
Shipping News Feature

LUXEMBOURG – Freight only airline Cargolux has seen any amount of changes this past year including both senior personnel and shareholders but the publication last week of the company’s audited financial statements for the last financial year (to December 31st 2013) at least show that the cargo carrier is on the right track to recovery.

The latest statement points out that, in spite of a moderate recovery in the last quarter, the airfreight industry continued to operate in a difficult environment for the most part of 2013. Capacity growth still outstripped demand, which resulted in an industry-wide decline in yields and load factors. Despite this Cargolux says it ‘quite successfully’ developed its activities and increased volumes in a bid to maximise contribution to fixed costs resulting in a 14.4% rise in total revenues to $1,988.5 million from $1,738.9 million in 2012.

The airline recorded a full year net profit of $8.4 million compared to a $35.1 million net loss in the previous year with a 16.7% rise in tonnages sold to over 750,000 tonnes. This increased activity, 95,022 block hours operated, 13,364 more than planned for the year, meant the original budgeted annual loss of $27.1 million was reversed into profit.

Cargolux expanded its fleet with three new Boeing 747-8Fs and retained, on a power-by-the- hour basis, a Boeing 747-400F that was initially planned to exit the fleet during 2013. It also added a Boeing 747-400ERF on the same basis, which brought the fleet to 20 aircraft at the end of the year. In contrast, the budget for 2013 foresaw a fleet of 16 aircraft only. This bigger fleet and rise in operations meant an average daily aircraft utilisation of 14:57 hours whilst the company’s market share reached 3.5% and it ranked at No. 8 among the world’s dedicated freighter and combination carriers in terms of FTKs. Cargolux President and CEO Dirk Reich, said:

“We don’t expect market conditions to improve significantly in 2014. Our priority is to grow and expand our global network with the continued support and valuable contribution of our hard working employees while focusing on efficiency and performance improvements. I am also confident in our ability to reap the first tangible rewards from the cooperation with our new shareholder HNCA.”