Looking towards a sustainable future
Determined to overcome hindrances and work towards a sustainable future, Cargolux entered the 2010s with renewed resolve and ambition to thrive as a leading air cargo carrier. As the company prepared for the delivery of its new aircraft, it was also actively working on resolving the pending anti-trust cases and strengthening itself by developing a robust compliance program.
While the decade started in a challenging business environment, Cargolux powered through and sought new initiatives and service offerings. In 2010, two trans-pacific frequencies were established; an important commercial milestone for the global carrier. Cargolux Italia’s business also started to take off with weekly flights between Milan-Malpensa, Dubai, and Hong Kong. These connections were operated on a single 747-400 freighter leased from Cargolux. These endeavors bode well for the company, and in June, Boeing rolled out the first 747-8F in the updated Cargolux livery – a true silver lining in a challenging period.
The 747-8F delivery
After a series of lengthy delays, Cargolux took delivery of its first 747-8F, LX-VCB, on October 12th, 2011. The introduction was incredibly smooth, and the new Queen of the Skies started operations immediately. The aircraft presents significant advantages compared to its predecessor such as longer range, higher payload, as well as reduced noise and better fuel-efficiency. Cargolux invested countless time and resources on the development of this model and it was widely acclaimed when it first landed at the company’s home base in Luxembourg.
Amidst the festive spirit of discovering the new aircraft and expanding operations, there was trouble at the top of the organization. Indeed, after shareholders SAirlines filed for bankruptcy, in 2009, the Luxembourg state had taken over its shares and in 2011, Qatar Airways bought a 35% stake in the airline. The relationship was short-lived, and in November 2012, Qatar Airways decided to exit its shareholding in Cargolux over different views and opinions on the company’s strategy. For the second time in as many years, the Luxembourg state stepped in until a more suitable strategic partner was found.
Throughout these years, Cargolux continued to develop its commercial strategy and focus on niche shipments. With the advantage of a fleet of purpose-built freighters boasting nose-door capability and different temperature zones, the company chose to really focus into specialized transport solutions. In support of this endeavor, Cargolux’s ground handling partner in Luxembourg, Luxair Cargo, has launched the construction of a dedicated Healthcare and Pharmaceutical Center that was inaugurated in 2013.
That same year, the airline reaches yet another impressive milestone as it takes delivery of LX-VCA, its 7th 747-8, and the 25th new aircraft Cargolux received from Boeing. This incredible feat symbolizes the long-standing and trustworthy relationship that both parties enjoy. Two more brand-new 747-8 freighters were integrated into the Cargolux fleet that year. As the year drew to a close, another significant occurrence took place; in December, Cargolux entered into a commercial cooperation agreement with Henan Civil Aviation and Investment Co., Ltd. (HNCA). This agreement paved the way for a partnership between Cargolux and its future Chinese investor, as the State of Luxembourg decided to sell its 35% stake to HNCA.
The dual hub strategy
This development opens a new realm of possibilities and in 2014, HNCA is officially welcomed as Cargolux’s new shareholder. The influx of a fresh perspective brings along new promises and, in a bold move to support the airline’s expansion, the company decided to open a second hub in Zhengzhou, in China’s Henan province, to complement the home base in Luxembourg. This dual-hub strategy was at the heart of Cargolux’s business plan and supported the carrier’s ambition of strong and continuous expansion. Commercial flights from the Chinese gateway were launched in April and proved immediately successful. October and November 2014 see record performances in tonnage, revenue and block hours, higher than ever before in the company’s history. In November, the airline celebrated its first 10,000 tons of cargo to transit through its second hub.
Europe’s number one all-cargo carrier is back on track and business expanded steadily as the airline celebrated its 45th anniversary. The decision to establish a gateway in Zhengzhou proved to be a decisive strategic move and just the year following its introduction, new possibilities arose. Following an agreement sealed with China, China was granted new traffic rights across the Pacific and frequencies were introduces between Zhengzhou and Chicago. In October 2015, Cargolux broke the landmark barrier of 50,000 tons of freight to and from Zhengzhou.
As the momentum around the second hub continued to grow, Cargolux Italia also introduced services to Zhengzhou. These flights included the group’s first ever commercial operation in Russia with a stopover in Novosibirsk. The Milan-based subsidiary also inaugurated connections from Malpensa to Tokyo-Narita in cooperation with Nippon Cargo Airlines.
Perfecting a niche service
With expansion and development well underway, Cargolux also decided to finetune its service offering and introduce a portfolio of comprehensive transport solutions designed to match specific handling needs. The product range includes 8 different customized solutions to cater for sensitive, critical, outsize, or perishable products. CV classic, CV jumbo, CV power, CV hazmat, CV pharma, CV fresh, CV alive, and CV precious, were each designed to respond to the particular nature of the relevant freight. This appealing new range was devised with a focus on niche business, an area in which Cargolux had become a recognized expert.
Two new special 747-8 freighters also joined the Cargolux fleet in 2015. LX-VCL is the 30th freighter that Cargolux acquired new from Boeing, 36 years after taking delivery of its very first 747-200F. This milestone aircraft is baptized ‘Joe Sutter – Father of the 747’ in honor of the man who designed the iconic aircraft in the 60’s. Joe Sutter and Cargolux shared a very special relationship cemented by a mutual love of the Queen of the Skies. The naming came as a surprise to the Boeing veteran who only found out during the unveiling of the aircraft at Boeing’s Paine Field. The second aircraft to be delivered that year was LX-VCM. To mark its 45th anniversary, the freighter bore a special livery created by Belgian cartoonist Philippe Cruyt that depicts the many facets of cargo shipments in a humorous way.
Buoyed by its success and bold development strategy, Cargolux brands itself as the “Global Cargo Carrier of Choice”. This signature reflects its position as leading all-cargo carrier and its ambition to remain a key player in the international freight market. This aspiration is underpinned by the success of the dual hub strategy; indeed, barely 2 years after starting operations to and from Zhengzhou, the carrier exceeded the 100,000 tons mark on this route. The fleet also stood at an all-time high, with a total count of 26 aircraft; 14 747-8F and 12 747-400F.
In 2016, another crucial decision is made as the Board of Directors approve the construction of a brand new headquarter building next to the company’s Maintenance Center at its home base in Luxembourg. In over 45 years of existence, this is the first time the employees have the prospect of working under a single roof! After several years of adjustments in top management, this is also the year that Richard Forson is appointed President and CEO of the company.
The following two years will be remembered as the record years for Cargolux. Driven by favorable market conditions and the boom in e-commerce, the airline registers unprecedented figures in terms of revenue, tonnage, and aircraft utilization. The network was further expanded and adjusted to meet requirements and Cargolux focused on a flexible approach to business to continue its achievements.
The agile processes and philosophy with which Cargolux approaches its business is carried through today, and the results are still visible now. The airline pursues its ambitions to prevail as the Global Cargo Carrier of Choice and the world’s leading all-cargo operator. Although 2019 was a challenging year for the company, the dedication of its people and its ambition to always remain a pioneer and an achiever in the industry is unwavering. Cargolux still has many plans for the future and continues to grow towards its vision of economic, social, and environmental sustainability.
Now, in 2020 we are celebrating our 50th anniversary; an incredible accomplishment stemmed from humble beginnings. We look back at our past with a sense of pride and we look at the future with confidence. As our world changes, we will face new challenges; ones we are looking forward to overcoming in order to keep building on our pioneering legacy. Our astonishing history is still in the making and sometimes we wonder how we got this far. The answer is in the words of one of our founding fathers: “Cargolux always had the right people, at the right time, with the right equipment”.