Tariff truce for Canada and Mexico – China retaliates, but lightly
Donald Trump’s use of tariffs for leverage and ‘deal-making’ was proven yesterday when those to ...
van Biesen
By Alex Lennane
Cargolux’s CEO has warned that the carrier will need to take “some hard decisions” as it reviews its operations.
In an interview with German publisher DVZ, Richard Forson, who took over from Dirk Reich in August, shed doubt on the very survival of the carrier in its current form, which faces stiff competition and a poor market.
“Can we survive as a main deck carrier within the rate environment we undergo now?” he asked.
And he added that the review would determine “whether ...
Comment on this article
Darryl Becker
October 25, 2016 at 6:02 pm“The Loadstar’s source claimed Mr Reich had been “a yes man” to the Chinese, putting interests in Zhengzhou above those in Luxembourg.”
The Cargolux management, the Luxembourg government and the social partners (the aforementioned 3 very likely includes the “source”) have said yes to China a long time ago.
“Perhaps this strategic review will put the Chinese operation and new airline Cargolux China – its launch next year with three 747Fs appears to have stalled – under rather more critical focus.”
Nice load of wishful thinking and a shred of hope for some emotional satisfaction which, fortunately for those that seek it, will not materialise.
The strategic review will finish with a lame 15 minute summary presentation about 2 years from now in front of an EXCOM that will consist of at approximately 50% new faces when compared to today. The conclusion will be that it was a nice idea but the review became obsolete 8 months into the process due to changing market conditions and the course of Cargolux will continue unchanged. Unchanged since it cannot be changed. Should the review by then have come up with proposals that infringe upon the social peace, they will not be taken on.
The usual survival by flexibility, fire fighting, and capturing every extra charter possible will be the MO for a long time to come.
the analyzer
October 27, 2016 at 4:17 pmNice comments from Mr Becker indeed, but lets at least expect that the newly hired VP Corporate Development AND Strategy, Mr Bannerman gets a decent salary for producing more than just a 15 minute summary presentation.
This (for sure not very cheap ) Study now called in by a former “Qatari Man” positioned in Cargolux and who becomes CEO only in the second round (in the first round he was obviously not yet good enough for the president of the Board as that round was won by Mr Reich) shows that Cargolux has a Managment problem on high level as they dont know what to do and in what direction to go.
The Quality of the majority of the commercial VP’s and Directors hired recently by Mr Reich is another example of desperation. I must admit, today its very difficult if not impossible to find the right staff. You just can’t get the right Staff.
This not because Aircargo has changed but the Cargo itself has changed, business has changed and nobody tells anybody what happens after globalization reached its peaks. So let some visionary and creative, modest people take over the commands of this company. I doubt you can find those people among the boardmembers and shareholder of Cargolux.
For the rest you dont need any big Study or a Crystal Ball to find out that Cargolux has too much capacity and a big “waterhead” creating lots of costs, thus hampering the productivity and creativity within this Company. The few additional charters they may capture/fix with all those 747 is not the key to success for the future but at least good to polish the cashflow. Althoug getting rid of some 747 will do it as well :-).
An opportunistic “firefighting” and flexibility strategy can also not be a longterm solution as it impossible to combine it with the adminstration, procedures and control functions in place.
Lets also not forget that the chinese investors have lots of shares and expect some return over investments. Unfortunately double Hubs (or even triple Hubs if we consider Italy as well) create double costs instead of double revenues ! the “hubbing concept” has always been used in Aircargo business as a cosmetic tool to seal cooperation/mergers/acquisitions by very innovative and creative Managers. History will tell.
finally if the social peace has not to be infringed by those drastic measures which show up at the horizon, give the Luxembourgers what belongs to the Luxembourgers namely Cargolux. As long as no sacrifices will be done ….Mr Becker is right in his comments ….nothing will change.