A global operator
Cargolux entered the new millennium as an all 747-400 operator with a fleet of 10 freighters and plans to further expand business in the wake of the golden 90s. In the first half of the decade, the company went through a rapid expansion with global destinations soaring on 6 continents and three more aircraft delivered from Boeing. This period was however punctuated by several significant events that would shape the future of the industry.
With the 747-400F well-established in service, and additional freighters on order, Cargolux started to take matters into its own hands in terms of personnel. The requirement for crewmembers and their training became more pushing, and the decision was taken to provide crew training in-house. To ensure a tailored approach to instruction, the company took a huge step and invested in a full-flight simulator. Another pioneering step for the airline, as it inaugurated the world’s first 747-400F simulator in February 2000.
A changing industry
On August 7th, 2001, the company took delivery of its 11th 747-400 freighter and was looking forward to welcoming two more over the next couple of years. The following month however, September 11th, 2001, the aviation industry was thrown into turmoil as the United-States was struck by a violent terror attack carried out with civil aviation aircraft. The world was profoundly shocked by the events and the industry suffered in the aftermath, leading to the implementation of drastic security measures to curb any further attempts. As restrictions were imposed throughout civil aviation, air cargo was also impacted by the ripple effect of the terrible event as shipments required increasingly stringent security checks. But there was a silver lining for air freight; belly capacity significantly decreased offering enhanced opportunities for all-cargo operators.
Despite the changing face of the industry, Cargolux continued its planned expansion, determined to overcome any difficulties. True to its flexible approach to business matters, the company fast adapted to new recommendations and set high security standards throughout its growing network. Over the first half of the decade, Cargolux focused on the development and future of its fleet as well as the extension of its global network. By 2005, the fleet comprised a total of 14 aircraft, all 747-400 freighters. In addition, the airline kept strengthening its international footprint; in 2006, Cargolux served a total of 60 commercial gateways worldwide.
Introducing Corporate Social Responsibility
After over 35 years in existence, Cargolux was now an established entity in the air cargo industry and one widely recognized as an expert by its peers. As an airline intent on remaining at the forefront of innovation, following years of striving to mitigate the negative effects of its operations, Cargolux took a leap forward and became the first all-cargo airline to sign the UN Global Compact in 2007, to promote sustainable commercial practices and fair practices for all throughout the world. This pledge became the embodiment of the company’s commitment to environmental and ethical issues. Once this initial step was taken, Cargolux organized its efforts in the field and began to put a name on its engagement; the Corporate Social Responsibility program was born.
Ever since the signature to the Global Compact, Cargolux has been reporting on its efforts and documenting its measures in accordance with the Global Compact. Each year the airline publishes its progress, shortcomings, and targets in a publicly available Corporate Social Responsibility report. This engagement was a significant milestone for the company which came in the wake of another huge step forward; a re-fleeting program. Boeing was working on the latest development in the 747-freighter family; the 747-8. In addition to providing more capacity and aerodynamism than its predecessor, this new generation development would be the quietest, most fuel-efficient aircraft in its category. Cargolux played an essential role in the design of the airplane to ensure it was as reliable as the -400 while taking into consideration environmental and sustainable aspects.
Launch customer of the Boeing 747-8F
Since Cargolux took delivery of its first 747-200 in 1979, the airline built a solid relationship with Boeing. When the question of a new generation aircraft arose within the airline, other manufacturers were considered but the choice to continue working with Boeing was evident. Both parties had come to foster an open and transparent relationship, based on trust and a mutual love of the iconic 747. This close collaboration is what pushed Boeing and Cargolux to work together on the design of the next generation 747, the -8F. It was decided, in 2005, that Cargolux, together with Nippon Cargo Airlines, would be the launch customer of the new and improved Queen of the Skies freighter. Cargolux placed an order for 10 of these brand-new aircraft.
For several years, during the design phase of the project, operators and manufacturer worked hand in hand. Based on the capabilities of the -400 and the expertise they had in the building of this aircraft, Boeing came up with a concept while Cargolux contributed its input for the operational and technical/engineering aspects. The B747-8F was designed to incorporate many of the technological advances of the B787 passenger aircraft, new technology engines, a new wing design, and with a capacity of close to 140 tonnes. The first deliveries of the B747-8F were scheduled for 2009 but the construction ran behind schedule and Cargolux would not receive its new freighters before the next decade.
A state-of-the-art Maintenance Center
With the 747-8 project now underway, Cargolux was resolutely geared toward the future and could focus on another highly important undertaking; the construction of a modern maintenance hangar in Luxembourg. After years of discussions and unsuccessful plans, in 2006, works finally started to create a state-of-the-art double-bay hangar at the company’s home-base. Its innovative design offered both advanced ergonomics and features aimed at conserving energy and preserving the environment, as well as proper and safe working conditions for the airplane maintenance services of the Cargolux and maintenance customer airplanes.
The building is, still today, recognized as the largest structure in the Grand-Duchy and can accommodate 2 Boeing 747s simultaneously. It was conceived to host the Maintenance and Engineering division under one roof to optimize workflows and enhance overview. Cargolux would now be able to perform A and C-checks in Luxembourg on its own fleet while also providing third-party services. It is also by chance that the construction started just as the company celebrated the 25th anniversary of its Flight Mechanic apprenticeship program in collaboration with the Lycée Technique Privé Emile Metz. The higher-education program enables young technically driven professionals to specialize as aircraft mechanics and learn their trade on the job within Cargolux.
The order for 10 brand-new aircraft, rapid geographical expansion, and the construction of a remarkable new maintenance center reflect Cargolux’s desire to settle itself as the leading player in the air cargo industry. To secure its European stronghold and reach new markets worldwide, the airline is also looking into developing a subsidiary in Italy. The plan is to operate one 747-400 freighter out of Milan-Malpensa. After intense work on the field to set-up the project; in 2008, Cargolux Italia is established and the new airline has applied for an Air Operator Certificate that was granted the following year.
Despite the ambitious expansion plans and Cargolux’s determination, 2008 was a complicated year for the global economy. Market conditions suffered from the downturn and the situation severely affected world trade. The following year, conditions continued to be turbulent and 2009 is now recognized as one of the most difficult years in the history of air freight. These headwinds did not bode well for the company, as Boeing announced the first of several significant delays in the delivery of the B747-8F. In the same year, the air cargo industry was also shaken by a series of antitrust investigations against several air carriers for alleged price-fixing.
In the wake of these events, Cargolux underwent major capital restructuring; SAirlines' 33.7% shares were sold to current shareholders Luxair, BCEE, and SNCI and the remainder was acquired by the Luxembourg State on a temporary basis.
This difficult episode in the company’s history served as a basis for new safeguarding measures, tighter internal policies, and enhanced transparency to ensure situations such as this would never re-occur. With new shareholders and a revised upper management, Cargolux entered a phase of renewed dynamism.
At the end of 2009, the company moved its whole Maintenance and Engineering division into the new hangar overnight. Cargolux could look to the future with confidence, buoyed by stronger confidence and the resilience of its employees. The company started preparing for the next decade, fueled by the anticipation of a new aircraft type and the prospect of further expansion.