Air Transport World

Built for cargo: Cargolux thrives by devoting its full attention to the freight business.(Profile)(Company Profile)

Next year, Cargolux Airlines International will celebrate its 35th anniversary. Established in 1970 by Luxembourg national carrier Luxair, Salen Shipping Group, private interests and Loftleidir Icelandic--which recently acquired a 10.1% stake in easyJet--the airline has outperformed its founders' wildest expectations, growing to become the ninth-largest cargo airline in the world, according to IATA, and Europe's largest all-cargo carrier, with revenue expected to exceed $1.1 billion in the current year.

Moreover, it has managed to put itself into the elite group of European network airlines that have been profitable in each of the past five years, with earnings of $70.9 million in 2003 up 43% compared to $49.6 million in 2002. Operating profit rose 17% to $64.9 million on an 18% increase in operating revenue to $954.3 million.

"We're doing rather well," says CEO and President Ulrich Ogiermann with a modest nod of satisfaction. "It's quite a substantial jump when you reach the $1 billion revenue gap; it is the barrier that divides the smaller companies from the more advanced companies. To remain profitable is a great achievement as well."

Cargolux's success is not a given. It is based in the Grand Duchy of Luxembourg, a country slightly smaller than Rhode Island with a population of under 500,000 and an economy driven mainly by banks and financial services. In its backyard it faces competition from Lufthansa Cargo and Air France Cargo, the respective No. 1 and No. 2 European cargo airlines last year in terms of freight tonnes and FTKs, according to the Assn. of European Airlines. …

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