Cargolux makes $768m record net profit

Europe’s largest cargo airline Cargolux today reported an extraordinary set of results for 2020 in which it earned a record net profit after tax of US$768.7 million, with an EBIT margin of 31.3%.

Announcing the unprecedented performance today, the company noted that 2020 “proved to be an exceptional year for the Cargolux Group, which celebrated its 50 anniversary at the same time”. 

With the collapse of passenger air demand and the bellyhold air cargo capacity that normally generates, Cargolux carried more than 1.1 million tonnes of cargo last year, a rise of 9.7%, via its total fleet of 30 aircraft – sixteen Boeing 747-400 freighters and fourteen Boeing 747-8 freighters. Cargolux is currently ranked fourth in IATA’s ranking of the world’s top 25 international scheduled cargo carriers.

Cargolux highlighted that at the outbreak of the COVID-19 global pandemic, the outlook for the year for the air cargo sector and cargo airlines “was originally quite bleak with production halted in China”. But “the situation resulted in a significant shortfall in available air freight capacity due to the grounding of most long-haul passenger operations”, the airline noted, adding: “We experienced unprecedented demand for the transport of PPE (Personal Protective Equipment) supplies as well as for other products which came to rely on air transport to keep logistics lines intact.

“Cargolux played a key role in delivering essential supplies throughout the COVID-19 crisis, alleviating the void left by grounded passenger aircraft and keeping supply chains moving. Cargolux continuously navigated changing restrictions worldwide to respond to market demand.”

It added: “The emergence of the COVID-19 pandemic highlighted the importance of air cargo in the global supply chain. True to its flexible and agile processes, Cargolux strived to respond to the increased demand worldwide.

“The company adapted its network to optimize its services and operate according to global market needs. The airline’s dedicated 747 fleet proved to be a strong asset in an operationally challenging year. Demand for charter services also remained strong throughout the year.” 

Cargolux said it was “proud of the fact that the airline honoured all blocked space agreements, with our customers, that were concluded in 2019 when market conditions were significantly less favourable”. 

Nevertheless, the huge increases in air freight prices last year due to the loss of passenger belly capacity and demand surges meant that it was still able to delivery record results.

Total revenues rose to $3.171 billion in 2020 compared with $2.259 billion in 2019. And the net profit after tax generated of US$768.7 million compares with a net profit after tax of $20 million in 2019. The airline generated an EBIT of $991 million in 2020 compared with $114 million in 2019, with an EBIT margin of 31.3% in 2020 compared with 5.1%​ in 2019.

Outlook for 2021

Looking at the Outlook for 2021, Cargolux noted: “Over a year after the initial outbreak, the Covid-19 pandemic is still not behind us and much uncertainty remains as to the evolution of the virus and the pace and effectiveness of vaccination programme. This development would indicate that the supply chain will continue to need to rely on freighters to keep logistics chains running as the bulk of long-haul passenger aircraft remain grounded.

“Cargolux remains committed to continue adapting its services to market demand and ensure supply chains keep moving and goods are delivered where required.”