UK-based freight carrier CargoLogicAir has revealed a large increase in losses during its second full year of operations, as it continues to consider fleet-expansion options.
It has disclosed an operating loss of $17.8 million for the year to 31 December 2018, nearly nine times deeper than the $2 million recorded in 2017.
Although revenues doubled to $213 million the cost of sales rose at a faster rate to $191 million, the company's newly-released accounts state. Pre-tax losses reached $18.2 million and the carrier turned in a net loss of just under $18 million.
CargoLogicAir's balance sheet shows that its net liabilities exceed its net assets by $2.3 million, and that its current liabilities exceed current assets by $16.4 million.
But it states that Volga-Dnepr Group has agreed "unconditionally and irrevocably" to provide "adequate financial support" to ensure continuation as a going concern.
CargoLogicAir operates a fleet of four high-capacity freighters – two Boeing 747-400ERFs, a 747-400F and a 747-8F – and is based at London Stansted.
It was set up as a division of Russian outsize freight specialist Volga-Dnepr Group and commenced operations in early 2016.
Cargo revenues reached $206 million last year following a "strong expansion" of commercial flying and sales, it says. Monthly aircraft utilisation rose by nearly 8% even with the addition of a fourth 747 in October 2018, although the carrier admits: "Further improvements will be required to deliver more profitable returns."
Use of the 747s, it says, enables it to capitalise on a niche which smaller freighters, or belly capacity in passenger aircraft, cannot easily address.
But it adds that its growth ambitions have been hit by a "constrained market" for available 747 freighters, and states: "The airline is actively working with partners to mitigate [the situation] and may also assess the merits of other aircraft types in future."
CargoLogicAir says the market for air cargo continues to be "heavily commoditised and highly competitive". While both 2017 and 2018 were "strong years" for air cargo, it says, the industry remains "volatile".