Cargolux - Europe’s Largest All-Cargo Airline

Cargolux: Europe’s Largest All-Cargo Airline

Cargolux is Europe’s largest all-cargo airline. Currently, Cargolux has more than eighty-five offices in over fifty countries around the globe. For over forty-five years, Cargolux has established itself as a first-class, reliable air cargo carrier. Over the years, their continuous improvement efforts and strive for quality service earned them a number of awards including the “Best All Cargo Airline” award for four consecutive years. This paper examines the development of Cargolux and its global operations that make it a successful air cargo airline today.

History and Background

Cargolux was founded by Loftleiðir Icelandic, Salén Shipping Company, and Luxair on March 4, 1970. Even though they began with a relatively low number of staff workers, their hopes were sky high as they launched into the business of flying all-cargo charters all across the world. The Salén Shipping Company was in the process of exploring their interests in the air cargo industry, along with a small group of Scandinavian ship owners. Salén Shipping Company’s first plan of action was to start small in the produce industry by transporting goods from the Canary Islands to Sweden during the week days and transport tourists on the weekends. Loftleiðir Icelandic had a surplus of five Canadair CL-44 aircraft that were used for passenger services in the 1960s. Once Loftleiðir began to phase out the Canadair CL-44s to Douglas D-C 8s, they decided to sell or put to use the surplus of aircraft they had. Originally, the Canadair CL-44 was designed as a cargo aircraft with a swing tail. In January of 1970, Salén and Loftleiðir formed Saloft.

As creation of the airline was taking place, Loftleiðir converted their first Canadair CL-44 aircraft back to its original cargo configuration. The two companies agreed to have the company headquarters in Luxembourg because it is located in the heart of Europe and Luxembourg authorities expressed interest in establishing an all air cargo that would service the continent. Luxembourg’s Luxair and Saloft negotiated to combine entities. They created the all-cargo airline, Cargolux. In September 1970, Cargolux’s first cargo flight from Luxembourg to Hong Kong took place. The airline began “to operate all-cargo ad hoc and sub-charter flights and the first years of operation proved that there was a need for the type of service that Cargolux was offering to its customers” (“www.cargolux.com,” 2015). Air charter was soon recognized as a serious and justifiable means of transportation. The Canadair CL-44s soon gave way to the larger Douglas D-C8 freighters, and in the later years Cargolux introduced the wide body Boeing 747 to its fleet.

About the Company

Thelma Etim, deputy editor of Air Cargo News, states “it is the freighter airline’s much admired deep-rooted culture that has been seen as vitally important to its success and sustainability over many decades” (“www.aircargonews.net,” 2014). At Cargolux, they stand by the phase “you name it, we fly it!” The core values that their employees exemplify are: to act as a team, perform high standards, and deliver on promises. Employees depend on one another in order to perform their job tasks and missions effectively. By working as a team, it makes them stronger, stimulates diverse ideas, and it brings out the best in everyone. It is agreed that the employees are all customer focused. They strive for excellence, consistency, and set high standards on their job performances. The future of their company and growth depend on customer satisfaction by providing reliable and quality service. With this concept in mind, Cargolux has earned a number of awards throughout the years. “In 2014, the company was awarded the ‘Best Freighter-Only Airline’ by Air Cargo News, ‘Highest Volume Cargo Airline 2014’ by Budapest airport, ‘10th anniversary: in recognition of its commitment to Barcelona Airport’ and ranked number 4 in absolute cargo growth at the Changi Airlines Awards 2014” (www.cargolux.com,” 2015). Cargolux considers their staff as the most valuable asset on what makes their business a success. The employees are all specialists in their field of expertise, ranging from ground operations, aircraft maintenance, finance, flight operations, information technologies, and administration.

Organizational Structure. The operational structure of the Cargolux includes, Flight Operations, Sales, Marketing and Ground Operations, Finance and Administration, Human Resources, Legal Affairs and Compliance, Maintenance and Engineering, and Corporate Services. However, most major company decisions are decided among the corporate services departments as well as the board of directors.

Key Individuals Involved. Below is the recent organization chart of the Corporate Services department as of July 29, 2015:

(“www.theofficialboard.com,” 2015)

In March 2014, the Board of Directors appointed Dirk Reich as President and Chief Executive Officer of Cargolux. The fellow chief officers include Richard Forson, who is the Chief Financial Officer and Bruno Wosniak, who is the Chief Information Officer. The Board of Directors, encompass a wide range of representatives from the company’s key stakeholders. The key stakeholders are: Luxair (35.10%), HCNA (35%), The Grand-Duchy of Luxembourg (8.32%), Banque et Caisse d’Epargne de l’Etat (BCEE) (10.91%), and Société Nationale de Crédit et d’Investissement (SNCI) (10.67%). On April 23, 2014, the Henan Civil Aviation and Investment Co., HNCA, became the latest stakeholder through its Luxembourg subsidiary, HNCA (Luxembourg) S.à.r.l. HNCA acquired 35% of Cargolux shares from the Luxembourg government, who bought these shares from Qatar Airways in 2012. The State of Luxembourg remains a Cargolux shareholder with 8.32% of shares obtained from Luxair. Luxair remains Cargolux’s largest shareholder with 35.10%.

(www.cargolux.com,” 2015)

Network and Resources

Cargolux operates eleven Boeing B747-400 freighters and eleven Boeing 747-8F aircraft. They use their modern fleet as well as a number of trucking contractors in order to move valuable and time-sensitive cargo on its global network that covers over ninety destinations around the world. Through their business operations around the world, Cargolux has approximately one thousand and five hundred employees that represent more than forty nationalities. Diversity and inclusion are some of the core values that contribute to their success as an air cargo airline.

Cargolux operates freight