 Cargolux Posts $153 Million Loss
Bruce Barnard | Apr 22, 2010 5:24PM GMT The Journal of Commerce Online - News Story
Falling volume, shrinking margins slashed revenue 34 percent Cargolux, Europe's biggest all-cargo airline, said it lost $153 million in 2009 as falling cargo volume and shrinking margins slashed revenue by 34 percent to $1.3 billion.
But the market picked up in the final quarter prompting the carrier to lease three 747-200 freighters to keep pace with increased cargo demand.
The Luxembourg-based airline said traffic, measured in tonne kilometers, declined by 11.3 percent, and yields slumped by over 26 percent in the "most difficult year in the history of air freight."
Capacity was cut by 9.3 percent from 2008 to hold the decline in the load factor to just 1.6 percentage points at 69 percent.
Cargolux lost $61 million in 2008 when revenue reached a record $2 billion and $47 million in 2007.
The carrier cut capacity on all routes and closed several destinations including Istanbul, Toronto, Helsinki and Cairo.
Cargolux's fleet of 16 747-400 freighters were kept in operation, but low utilization meant that it effectively grounded the equivalent of two aircraft in June and July.
Cargolux had agreed earlier to sell two freighters to UPS, but when the planes were delivered in September and October it had insufficient capacity to meet rising demand in the final three months of the year. It leased three Boeings to plug the short fall.
Despite the decline in traffic and reduced capacity, Cargolux said it maintained its 4 percent market share.
Cargolux said it has mixed emotions over the production delays that held off the delivery of its first 747-8F, for which it is the launch customer, from 2009 to late 2010.
"On the one hand, the delay helped us to preserve much needed cash," the airline said. "On the other hand, we could have well used the added efficiency, lower fuel consumption, higher range and payload to reduce our operating costs."
The loss eats through more than half of a re-capitalization to which shareholders agreed in November as mounting losses threatened the carrier’s survival.
SAirlines, part of the defunct Swissair group, sold its 33.7 percent stake to existing shareholders the Luxembourg airline Luxair, investment groups BCEE and SNCI, and a new shareholder the Luxembourg state.
The shareholders approved an authorized capital of $200 million and gave power to the company's board to issue new shares.
The carrier received a capital injection of $100 million before the end of the year.
Contact Bruce Barnard at brucebarnard47@hotmail.com. |
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