Cargolux makes a major, original contribution to the air freight industry. Unlike most carriers which take cargo in the belly of passenger planes, they only transport merchandise. Coupled with the dedicated support of their home country this has enabled the firm to rank 7th in the world. Dirk Reich, the Chief Executive Officer, explained how they are confronting growing competition.
How does Cargolux thrive in this competitive market?
The last ten years have seen increased competition from belly operators from Asia and the Gulf. However, while they must stick to the passenger routes they operate, we can fly to any airport in the world because we only transport cargo. Often we arrange this at short notice. You will not get that kind of flexibility from any other carrier.
Your home base is also unique.
Yes. Our business model is good and we have the support the country. Plus, of course, our Luxembourg hub is well located in the centre of Europe, with our clients benefiting from the speed that comes from our close relationship with trucking partners and public authorities.
How important is the Chinese market to you?
China is the most important market after the US and its importance is growing. We have daily return flights between Shanghai and Luxembourg, 10 flights a week to Hong Kong and two services a week to Beijing and Xiamen. Since April we have daily services between Luxembourg and to Zhengzhou, and since June there is now a total of 10 flights a week from Zhengzhou to Luxembourg, Chicago and Milan. We are developing a dual hub strategy in Zhengzhou and Luxembourg, connecting two of the world’s largest markets.
What other links are you developing?
Since April we have been flying across the Pacific, from mainland China (including Zhengyhou) and Hong Kong to the US. This allows Cargolux to operate within changing global trade flows because we are one of the few global players that offer flights to all regions. We are also building intra-Asian and domestic Chinese traffic.
What challenges do you face penetrating the Asian market?
The main challenge is the acquisition of traffic rights. We are happy that due to excellent bilateral relationships we are well supported by Beijing and Henan to develop routes between China, Europe and the US. More widely, countries are adopting open skies policies and this is benefiting us, and their economies. Another challenge is filling flights in both directions, as traditionally, there are more exports than imports from Asia. We have to be creative because we strive to be true to our slogan: “you name it, we fly it”.