Cargolux looks to Middle East to counter downturn

With deepening weakness in most major air cargo markets, early August was probably not the best of times for Cargolux to take delivery of its eleventh B747-40) freighter.
But then in thirty years of existence, the Luxembourg-based carrier has been nothing if not creative about coping with the vagaries of international air markets.
“One advantage of being a cargo airline is that we can be quicker and more flexible in reacting to market demand,” says Pierre Wesner, vice president Europe, Middle East and Africa, for Cargolux. At the moment, that means switching capacity from the Asia Pacific to the Middle East and CIS.
In particular, on July 28 Cargolux took one freighter out of Far Eastern service and switched it to a new Gulf turnaround flight flying from 1 uxembourg to Kuwait and Sharjah and back. This is in addition to its existing turnaround route which takes in Damascus
and Dubai and Karachi.
The new service, Wesner says, is aimed particularly at sea-air shipments out of Sharjah. “The idea is to be there on the right day (Saturday) so we can deliver to Europe on Monday morning,” he explains. The timing of the service is important. Though sea-air volumes as a whole have suffered, Vesner says Cargolux identified several key customers who needed Monday morning deliveries and through them are managing to get good loads on the service.
In addition to the new flight, Cargolux has also been adjusting allocations on its Far Eastern flights to give more space to inbound cargo from Europe into the Middle East. Taken with the new freighter route, these changes have added between 20 and 30 percent to its lift into the region.
Wcsiier says that adjusting allocations is an ideal solution for both Middle East and Far East markets.
“It means we can maintain frequencies to the Far East, but reduce the amount of capacity into those markets and so keep rates up. With Far Eastern rates under a lot of pressure, we don’t want to have to ru like crazy after cargo and follow the market down just to fill the planes.
Inbound volumes to the Middle East are being kept strong by continued infrastructure investment in the area, much of it driven by the strong oil price. While they are suffering elsewhere, volumes of electr on ics, telecom equipment and car parts remain Strong to MicIclie Eastern destinations, Wesner says.
Actual oil-drilling equipment is also a mainstay for Cargolux, and it has also benefited from the disappearance of many CIS freighters from the Gulf markets.
Oil is also driving growth in Baku, another market where Cargolux has recentlv started freighter services. On 2 September it started three weekly flights to tlìc Azerbaijan capital, continuing on to Shanghai. As well as oil-related cargo, Wesner says the route is carrying electronics, fresh flowers and other general cargo. “We were pleasantly surprised at the range of cargo that was offered to us,” he says.