In the latest round of union talks, Cargolux has reduced its cost-savings target from $37 million for 2013 and 2014 to simply $12.5 million for next year, lowering the amount of concessions its unions would have to accept for a new collective-work agreement.
The Luxemburg-based all-cargo carrier has been in negotiations with two trade unions, Luxembourg Confederation of Christian Trade Unions and the OGBL, over a new collective-work agreement. It released an official statement reiterating its goals and conceding to the new financial cuts after what it said were “diverging media reports.”
According to the carrier, union negotiators are asking for a full or partial repayment of the money saved with any concessions in the instance that Cargolux turns a profit during the next year. Although company officials say that defeats the purpose of the initial cuts, they said they will consider some reimbursement plan if financial targets are hit.
“Cargolux’s latest response to unions reflects the company’s preparedness and determination to uphold social dialogue by offering a fair and equitable solution that will enable the social partners to swiftly work towards securing the long term financial sustainability of Cargolux,” the carrier said in a statement.
The new agreement would expire on Dec. 31, 2014, and efficiency and productivity improvements would be prioritized before cuts to worker benefits.
“Certainty of employment, or expansion of activities, requires a successful and financially sustainable Cargolux in the short, medium and long term," the carrier said. "Contributions from all stakeholders, including the unions, are essential conditions to achieving this goal.”
Life in the current air cargo environment has been increasingly difficult for all-cargo operators, as passenger planes with wider belly-hold spaces are introduced into the market, making carriers that have no freighters in their fleets even more competitive. Last year, Cargolux recorded a loss of $35.1 million, but beat its projected 2012 loss of $57 million. At the time, officials said the carrier fared better than expected due to strong year-end activity, though they were gearing up for a difficult 2013.
The state-owned carrier also went through some ownership changes last year. Luxembourg sold a 35-percent stake in the airline to Qatar Airways for $117.5 million only to have Qatar sell its interests back to the state in December. Potential new suitors for a stake in the company include Volga-Dnepr, Centurion Air Cargo, Nippon Cargo Airlines and a handful of other companies, according to recent reports, though no one suitor has emerged in the months since Qatar returned its piece of the ownership.
In a bit of good news, Cargolux officials earlier this month secured $300 million of bond financing for two Boeing 747-8 freighters from the U.S. Export-Import Bank. With the new additions, the carrier now has 8 747-8 freighters, with a ninth delivering later this year. It has spent nearly $1 billion on -8 freighters in the past year. - Jon Ross