'It needs to re-invent itself' – Champ Cargosystems loses ground
Champ Cargosystems’ future remains in doubt, with observers pointing to falling staff numbers and customers ...
Next week marks a milestone in air cargo’s history: a Cargolux Canadair CL-44 took off from Stockholm for New York, in search of a shipment of strawberries and iceberg lettuces, on 10 March, 1970, just six days after the airline was founded.
There was one aircraft crew, four ground staff and a single-room office with a ping-pong table for a desk. It’s a story like Jeff Bezos’ – except with less money.
Not all cargo airlines reach the grand old age of 50. But Cargolux has.
The 1970s saw it move to jets, then jumbo jets, and bring its maintenance to Luxembourg. The 1980s, however, were challenging.
The economic crash saw the carrier edge close to bankruptcy (for the first time), making a third of its staff redundant. But this perhaps planted the cultural seeds for it to become the survivor it is today. (You can read the full history on a lovely new website here.)
And it is a survivor. The runways of the industry are littered with the names of more mortal freighter operators, every year another one (or more) falls by the wayside. But not Cargolux.
So what is its secret sauce? How has it survived – and sometimes even flourished – where others have failed?
“Cargolux is a unique outfit, where commercial, flight operations and maintenance really work hand in hand,” explained Robert van de Weg, former senior vice president sales and marketing.
“There is real common spirit in the firm, and flexibility is what always has seen it through challenges.
“They kept management structures simple, costs down and nicely applied economies of scale with monotype fleet expansion and network synergy effects.
“But the most important hidden assets in the company are pilot flexibility and the in-house maintenance team: big parts of the success story.”
Stan Wraight, president of SASI and air cargo expert, added that Cargolux has always been one to watch.
“Cargolux started its life as a very specialised airline for Panalpina’s Nigerian oil and gas ambitions. Even in the beginning a carrier that knew that specialisation for “high-value verticals” was a winner.
“Fifty years later it remains so, highly skilled and recognised globally for its quality approach.
“I don’t mind telling you that when starting AirBridgeCargo in 2003 we looked closely at Cargolux’s model, out of respect for its way of doing business. I hope Cargolux will continue to show the value of a quality-driven approach for the next 50 years.”
A personal view
Each airline has a distinct character and, as an observer of the industry, I have a real fondness for freighter airlines. Sometimes shady, sometimes struggling, always brave and engendering real loyalty, cargo-only certainly looks like one of the harder aviation businesses to work in.
My first contact with cargo was via Cargolux. Working on an aviation finance title in the 1990s, I was invited on a press trip to see Cargolux. I knew very little about aviation, absolutely nothing about finance, and didn’t know freighter airlines existed. I asked an older journalist on the flight to tell me anything he could about cargo.
He was succinct: “The only thing you need to know is that cargo airlines hate passenger airlines, because they have no idea of the value of their capacity, and give it away, almost for free. That’s it. You now understand cargo.”
It turned out to be a little more complicated, but the one thing that struck me most was how generous the Cargolux people were with their time; how happy they were to explain the business; how very much they cared for the airline; and how very different it was to my experience in the passenger business, where people were uptight, short of time, unfriendly, expected an encyclopaedic knowledge from you, and yet would not share theirs.
And reporting on Cargolux has been fun – even when it has faced difficult times and the insider leaks to the press were daily and scathing, all it really evidenced was a company about which everybody cared enormously, everybody had strong opinions and everybody wanted to thrive.
And so it has.
Cargolux shaped my interest in freight and logistics, as it has, I suspect, for many hundreds of people.
Happy birthday, and here’s to the next 50 years…