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Aviation History
1994
1994 - 1479.PDF
CARGOLUX FOLLOWING THE MONEY The first airline to operate Boeing's new 747-400F freighter hears the marks of the tiny nation of Luxembourg. Herman de Wulf reports on the extraordinary success of Cargolux. I n a world where freight is increasingly carried in the bellies of passenger air craft, a thriving pure-cargo carrier out side the express-package sector is almost an oddity. Cargolux of Luxembourg, however,., has turned its strategic location into a platform on which to build a highly successful specialist operation. Operating from uncongested Luxem bourg Airport, Cargolux flies hub-and- spoke all-cargo services, combining Boeing 747 capacity with direct trucking services to Europe's major industrial centres. The airline limits its operation to the Northern hemisphere, declaring: "We only fly where the money is. Our target is not pushing metal through the air, but making money." It began life as a privately held company in 1970, with Luxair, Salem Shipping, Loftleidir Iceland and private Luxembourg interests as shareholders. Today, Lufthansa owns a 24.5 % share, but with Luxair own ing 24.53 % and Luxembourg banks (Banque Generate du Luxembourg, Societe Nationale de Credit et d'Investissement, KB du Luxembourg, Caisse d'Epargne de l'Etat and Luxempart) having 44.69 % and pri vate interests controlling 6.28% of shares, it remains very much a Luxembourg oper ation. It is also the major airline at Luxembourg Airport, with an 80% share of international flights. Cargolux's fleet has evolved from its original five Canadair CL-44s to a similar number of McDonnell Douglas DC-8s, and then Boeing 707s. Now it has two Boeing 747-400Fs and four 747-200Fs. A third 747-400F will be delivered in 1997 and the airline has options on two more. Daily air craft utilisation in 1993 was just over 13h for the 747-200F and over 14V2h for the new 747-400. Full 1993 results are not yet available, but the airline carried 131,753t of cargo. Vice-president of commercial planning, Lucien Schummer, outlines Cargolux's activities, saying: "We only fly long dis tance in the Northern hemisphere. Latin America is only just emerging and Africa is a problem. Perhaps South Africa may become attractive in the future. The CIS is dormant. We go only to the US West Coast, and to the Middle and Far East, to get the most out of the 747-400F. We dropped Montreal recently because it would undo the benefit of the -400F." 747 INVESTMENT Schummer is happy with Cargolux's investment in the new 747-400F freighters. "It carries 97t more than the -200 out of Dubai to Hong Kong. This is an investment industry. If you do not invest, you're out. The -400F is really tailored to our needs. It carries a 211 greater payload over 1,850km [l,000nm] range and burns 15% less fuel than the -200," he says. He adds that the -400's "40% lower take-off noise than the -200" may help Cargolux around Luxembourg's night time curfew. The type has also allowed Cargolux to open additional long- range destinations. On 1 March, it began a weekly scheduled service to Mexico, returning via Seattle, to respond to Euro pean demand, and on 20 April it added a weekly Houston ser vice. It already oper ated almost daily scheduled freighter services from Lux embourg to Los Angeles, San Fran cisco and Seattle. Cargolux intro duced a Luxembourg- Prestwick-Seattle service in May, frequently carrying Rolls-Royce engines to Boeing on its own General Electric CF6-powered aircraft. The Houston route is based on the carriage of drilling equipment, partly to the CIS. Cargo is a tough market anyway, he says. "The yield is coming down because of the pressure from belly loading in passen ger aircraft. They need that cargo to offset the lower yields in the passenger business, so we specialise in large-size cargo that they cannot carry. And we are increasingly active in the Asia/Pacific market, which now represents 53% of our revenue. North America represents only 13% and Europe and the Middle East 34%. We also try to take advantage of market fluctuations. At present, revenue is better on the USA-to- Europe run than from Europe to the USA. Istanbul is another booming economy and a gateway to the Islamic countries. "Our trump card is our geographical sit uation. We operate a hub-and-spoke oper ation from Luxembourg. We haul cargo by truck to and from European destinations. Our little secret is the uncongested Luxembourg airport. It is quicker to truck cargo from Cologne to Luxembourg than to Frankfurt. It is also quicker to move it through Luxembourg than through Frankfurt," he concludes. • Cargolux can boast oj an extraordinary success. Below: two Boeing 747-400F freighters flown by Cargolux cargolux FLIGHT INTERNATIONAL 15-21June. 1994
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