04 Juli 2016

[040716.EN.AIR] Cargolux CEO Steps Down After 'Losing Support' Of Powers That Be

CARGOLUX CEO Dirk Reich has stepped down citing personal reasons two years after his appointment at the all cargo carrier which is 35 per cent owned by a Chinese company, reports Luxemburger Wort newspaper.

Last month a new joint-venture with Zhengzhou-based Henan Civil Aviation and Investment Co (HNCA), which holds 65 per cent in the JV, started under mounting criticism.

News emerged that Mr Reich would leave with immediate effect, after "losing support", the newspaper said without elaborating.

Cargolux will own 35 per cent of the JV, with partner HNCA not only holding controlling interest, but also 35 per cent of Cargolux itself.

Cargolux China will receive US$220 million in initial funding, which includes $77 million from Cargolux.

The CEO departure has yet to be officially announced and still remains to be approved by the board, said the report quoting Infrastructure Minister Francois Bausch.

Richard Forson, who once served as interim CEO before Mr Reich assumed command in March 2014, is favoured to take over, according to local media.

Earlier this year, media reports citing sources close to the Cargolux China venture reported warnings of a "commercial calamity."

The reports said that Mr Reich had lost the backing of Luxembourg's minister of transport and shareholders of the airline.

The new Cargolux China said it would rely on a perishables transpacific and intra-Asia focus when flights commence next year, reported London's Loadstar.

Mr Reich said this would be 80 per cent of its business, but would also include the first-ever Cargolux connection with Australia to Melbourne.

The new airline will operate three 747s, but later expand to five within three years.

The JV will build upon the carrier's milestone of reaching 100,000 freight tonnes on the route between its Luxembourg and Zhengzhou hubs, which comes just eight months after hitting the 50,000-tonne mark last October.

Cargolux now operates seven weekly flights between its "dual hubs" as well as flights from Zhengzhou to Milan, Kuala Lumpur, Singapore and Chicago. Overall, the airline operates 100 weekly flights into mainland China.

Source : HKSG.

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