New joiners from last year have definitelly plenty of flights to perform, no doubt about that.
Just keep fingers crossed to see this worlwide crise to end soon and new pilots will be hired quickly...

No news.
No hiring for the near future.
Good luck!

Is Cargolux heading down the drain?

yep everyone off for Christmas

Cargolux announced (28-Sep-2012) it has decided to repudiate the current collective work agreement in force, due to expire on 31-Dec-2012. The airline will commence negotiations with the unions representing employees in order to work towards achieving "a level of labour cost and improvement in productivity that will put the airline into a better position to withstand these challenging times in the market, both now and in the future". The carrier announced that a reduction in labour cost and improvement in productivity are only two of several initiatives to be undertaken by it in order to achieve sustainability in the long term. [more - original PR] --- From CAPA Aviation news---

Here's another article on the same subject:

Wort.lu - Cargolux-Direktion kündigt Kollektivvertrag

Any thoughts from the inside?

For non German speakers go to wort.lu/en. CV in deep financial poo ( around euro 13+ million recent losses ) financial injection needed. More Qatari cash perhaps, together with more shares...... Maintenance dept rife with rumours of heavy maint going to mid / far east. CEO has not ruled out personnel reductions. I have been told that the nice new shiny hangar has been busy with customer a/c recently, so some money must have been made.

13+ million € loss per month since the end of last year, to be more precise...

Have any aircraft been parked to cater for the loss of demand, or is aircraft utilisation being reduced, along the likes of LHC?

Aedius, I find your numbers hard to believe, hat would translate into more than 150 million per year! Any proof?

I think Aedius has got confused........

There would have been no reason to cancel the present CWA if the situation wasn't as severe as it is for the moment. CV will be running out of money in just a few months time.

Dramatic finances require dramatic changes.

Aedius,

you are mixing up numbers! No A/C being "parked". The problem is our Interim CEO who is on a Qatari mission. It s now up to Luxembourg to send the boy home to the sandpit....

HURZ

Deportation for working without work permit in Luxembourg will do fine as well.

/Quote
"QR threatens to exit CV, 04 Oct

Qatar eyes a dominant role in Luxembourg's aviation. If the Emirate's demands are not fulfilled Qatar Airways could pull out of Cargolux.

The future fate Cargolux is facing is highly dependent on the outcome of political decisions between the Emirate of Qatar and Luxembourg's Government. Thus, the cargo carrier has become a minor bit in a much bigger deal with only very limited influence on the outcome.

According to sources close to the case the Qatari rulers have told their political counterparts in the Grand Duchy that Qatar could completely withdraw from all investments announced or already made in Luxemburg if their key demands are rejected. These include upping Qatar Airways' stakes from currently 35 percent to a controlling majority of well over 50, perhaps even 100 percent, observers say. Furthermore, Qatar seeks an equity stake in passenger airline Luxair, the major Cargolux shareholder (43,4%).

Responsible for the financing of the package would be Precision Capital, a Luxembourg-based Qatari investor. Since the enterprise is registered in the Grand Duchy, Precision is legally a national company. Therefore, investing in Luxair and taking over the carrier's Cargolux shares would not violate EU laws, saying that foreign investors are limited to 49 percent when buying into any airline registered in Europe.

If these moves would be blocked by Luxembourg's Government or legislative body the Qataris threatened to terminate their financial activities in the Grand Duchy entirely. This would include abandoning their financial activities after their recent announcement to intend to buy two major local banks.

According to local Radio Channel 100.7 loss-making Cargolux needs a capital injection valued 750 million euros within the next three to four years. Albert Wildgen, Helm of the carrier's Supervisory Board, who is considered being an intimate of the Qatari Government, did not comment on the case. All he told the radio was that "substantial cash" is needed to keep Cargolux in the air. Wildgen announced recommending the shareholders a "considerable capital increase" before year's end. The money is mainly needed to finance the airline's fleet renewal program.

Final decisions could be taken already at the controller's next meeting, scheduled October 11. Then, a new CEO could be appointed as well since the post is vacant after the airline's former boss Frank Reimen stepped down in July with Chief Financial Officer Richard Forson taking over the chair as interim CEO. Meanwhile, a pre-selection of candidates took place, while it is unclear at this stage if Forson's name is also in the pot.

Meanwhile, Luxemburg's biggest union Onafhaengege Gewerschaftsbond Letzebuerg (OGBL) urged the Government to block any changes in the carrier's existing shareholder structure. In a letter to some cabinet members, among them Finance Minister Luc Frieden, the OGBL demanded a positive and clear commitment to Cargolux and Luxair's Cargo Center at Luxembourg Findel airport. OGBL President Andre Roeltgen further called for postponing the Cargolux controller's meeting. The views are so controversial that it is too early for taking any new decisions."

/Unquote

Maybe now some people will start to believe the numbers above. Basically CV is in a lose-lose situation. Either Qatar gets full control over CV (making sure the employees get the worst possible contracts) or they backtrack completely out of CV and leave the company in the worst financial limbo...

Aedius, very very interesting, but where does the "quote" come from ?

Aedius,

Were you rejected when you applied for a position with Cargolux ??

Regards

Hawkeye red

@hawkeye red:
you are completely misjudging the reason I'm posting here. I'm certainly not upset about CV for whatever reason, I'm just upset with whole economic and political situation here in Luxembourg, with incompetent ministers taking all the wrong decisions.

We are all in the same boat here (whether it's CV, LG or any other economic sector) and about to lose all the wealth we gained in the last 40-50 years and still, almost no one is noticing how bad the situation really is.

If any post from me here lately has any purpose, than it's to make people aware how serious the situation really is. If we don't fight now, we lose everything we enjoyed the last few decades.

P.S.: I actually didn't get rejected at CV, quite the contrary.

Who on earth hired Wyman to do the study ? Unless, in the local tradition, money changed hands...........

Who hired Wyman?
 

This competent fellow:

"...Richard Forson was at the top of his game. As SAA chief financial officer, he worked tirelessly to organise financing for the airline's acquisition of 41 Airbus aircraft in a US$3,5bn deal.

To guard against currency fluctuation, SAA took out a 10-year hedge against the rand at a fixed rate of R10,80 when the rand was trading at around R13.

He thought this hedge was adequate. Far from it: the rand rallied against the dollar in 2003 and peaked at around R6, wiping R6bn off SAA's balance sheet. Overnight, the airline became technically insolvent. Forson and then SAA CEO Andre Viljoen were blamed for the financial mess. While the finger-pointing was going on, Forson packed his bags and headed for Qatar Airways, which offered him a lucrative package and the chief financial officer job."

(from Financial Mail 24.11.2006)


Disgusting to see these guys at work!

CV was betrayed during the mid 2000's anti trust hearings, this is the penalty they now pay, the employees are very concerned , cost cutting should be top down and not the other way ..

Ok, but how do we know that this Oliver Wymon is actually the one doing the analysis for CV?? Sources please!

Then again, it was announced yesterday or so, that BIL (formerly owned by troublesome DEXIA) has now definitely been bought by Precision Capital (=the Qataris) at 90%, with the remaining 10% chipped in by LUX government.

Is this good news, because it removes one trump card from the Qatari's hand (they were threatening to pull out of LUX altogether)? Or bad news because now they control that bank (which is however, as far as I get it, mainly involved with private banking)?

source please
 

An interoffice memo stated that Oliver Wyman will do the review.

Local media reporting today that CV have been advised to outsource a/c maintenance . Also that Forson is expected to become fulltime CEO. Oh dear..........

That is not correct at all !

Local media are reporting that nothing was decided about the outsourcing of maintenance at all.

They said it was one of the discussion points on today's agenda.

Nothing has been decided as the audit by the wonderful Wyman group is not complete yet, and that involves looking at a possible fleet restructuring for Cargolux. Until this is assessed, no decision can be taken anyway on whether or not maintenance is outsourced or what maintenance is need at LUX.

The only thing that the local media have reported as "apparently decided" is that there will be a collective work agreement based on the basic luxembourgish social parameters and that all employees would receive a basic salary. Any increases would be purely performance based - according to the media. They also claim that leave will be the legal minimum required by Luxembourg and no extra/additional days, and that the 13th month salary would be dropped.

I would take all this with great caution, as the media have and will misconstrue facts, whether by accident, misinformation or negligence or speculation.

Dont get me wrong, I am not taking any sides here, but I think its always a good idea not to jump to conclusion or scaremonger. This website alone pays tribute to the media misreporting all the time.

Sorry, havnt found an english version yet:

Wort.lu - Cargolux: Nächste Woche geht's weiter

Tageblatt Online - Runder Tisch am 23. Oktober - Luxemburg

Rumours rumours,

Seems to me that they are using the media in order to demolish the employees, and specially the pilots. They threat to outsource and then they offer a new agreement, with lower conditions. Fantastic ! Thanks bwana !!

The pilots are always the piece to sacrifice, in order to "save" the fellows of the office, that do nothing. I'm pissed off; our terms and conditions have been agreed after many many years.

Performance based pay... bull**** !!. They will increase the conditions until they are unreachable. In the mean time, their bonuses are going to increase exponentially. We are going to loose family life, quality of life and money for nothing. Even qatar is competing with us in certain routes.:=

This is pathetic. :ugh: They want the employees to pay for the management mistakes; price collusion, selling aircrafts and the dry lease BCFs, sell aircrafts to competitors, and purchase an airplane that you can't pay, and that nowadays is useless, and the list goes on !!:ugh:

Instead of trying to fix and make a sound plan, they screw employees and contract Oliver Wymann's inquiry. :D Surely, like in the CDO's case, if they make a mistake, they are going to be punished. Sure. Are we serious ???

Interesting article on current www.cargoforwarder.net

Any clue if the little Cargolux south of the alps is affected by the ongoing "debate"?

Cargolux Italia
 

South Prince,
My understanding of this whole matter is that Cargolux mainline is on a cost cutting drive that involves all phases of the production line and all sides of the value chain.
The rumor I've heard from my friends in Cargolux Italia is that actually this whole situation in Luxembourg may turn out to be beneficial to them. They are at a "make it or break it" moment and it's either they grow into something bigger than one airplane operating charter flights on behalf of their Luxembourgish mother or in my opinion it would be hard to maintain a financially viable and profitable operation over time, especially taking into account the present low yields across the aircargo industry and a general contraction in the airfreight market.
By reading the articles on the subject available on the internet, it is pretty clear the new CEO wants to bring costs down while increasing the productivity in a (possibly) non-unionized environment. Cargolux Italia is already meeting all these requirements so it might actually be that all the "job outsourcing/expenses containment" idea may not include Qatar or involve Qatar Airways at all, but instead may be related to a transfer of airplanes and manpower to their Italian low cost subsidiary.
My two cents on the topic.
Ciao, alby

Hello alby,

I think that may be a little bit too much wishful thinking.

Are you saying that Cargolux Italia will be operating all the current Cargolux aircraft out of Milan or Luxembourg ?
Because I dont quite see how the whole operation would work successfully from Milan !?!
What about pilots to fly the aircraft ? How many non Cargolux guys are 747-8 rated ?!?

I'm sorry but it makes no sense what so ever !

Honestly, at the moment I think the focus is on Cargolux at Luxembourg, and making it more competitive (apparently)

The articles on the internet now range from anything involving Cargolux operating with 4 aircraft and masses of pilots being laid off, to fleet restructuring and maintenance being outsourced.

Personally I think the articles are the result of misinformed employees and some clever managers leaking bogus information to the media to create all this hype and scaremongering.

At this time absolutely no one in the work force knows for sure what the hell is going on, because the powers that be have done something very clever already.

If you want to control any group of people, the easiest way to do it is FEAR !
You tell them that their jobs, livelihood, families and financial situation is in danger, and people start panicking !
You do this with the media, which is the most powerful tool nowadays.
Once you have put the worst possible scenarios in the media, you then do absolutely nothing !
No communication with the workforce, no meetings (apart from top level closed door ones), no information !
This creates even more outrageous rumours fuelling the fear and panic.

By this stage people are expecting the absolute worst from the situation, and anything that the management bring to the table after this will "not seem that bad".
Everyone is glad to "have a job" and completely forgets how many long fought for perks and conditions have been lost, because the relief of keeping their jobs pushes all that into the background.

Also have a look at this man's view of things:

http://egidethein.********.sg/2012/1...r-11-2012.html

For all of our sakes, Cargolux and Cargolux Italia, I hope that people retain some common sense and that we dont just become more pawns in a political and financial pissing ground !

Hi Pow-Wow,
I'll try to clarify. Based on the conversations I had with friends working for ICV, they are expecting this situation in Luxembourg to help them in their quest of business success, which as you know it has been tarnished by numerous political and financial issues. The idea is to take advantage of the Italian "lower cost" structure and position extra 400s in MXP while offering pilots, that in LUX could have lost their job, to continue working on the same airplane, under the Cargolux umbrella but under the Italian terms and conditions, which are less precious and valuable than the Cargolux mainline ones.
Since I don't work for any of the two companies, nor for Qatar Airways, apologies if this does't sound accurate enough, although I felt i could contribute by giving a little heads up about what's cooking also on the other side of the Alps. On one thing I do agree 100% with you: they are putting up a "divide and conquer" type of strategy. Best option is to wait up together, let the storm pass and do a damage assessment afterwards. Taking any decision or position at this time would be hasty and probably wrong because it would be based on rumors and not on any checked fact.
Good luck. Ciao!
alby

Hi there Alby. Do I get it right? ICV guys hope that out of all the "restructuring" in mailine LUX they will get a "Bonus" moving most of Cargolux business in Milan?

Hi South Prince,
I wouldn't really call it a bonus but most likely a "boost" to their current activity. Also, I would personally doubt that moving, as you say, most of the Cargolux business to Milan is viable scenario. The assumption is that it is a cost cutting exercise. Therefore, since the yields are low on certain routes of the mainline network, one of the ways to go is to have the least productive routes to be operated by Cargolux Italia which, thanks to their lower cost base, they can maximize the revenues (or contain the losses) while maintaining the position as a global player. But again, this is my understanding from a couple of long chats with some friends and therefore is as valuable as anybody else's point of view. It sounds plausible to me and may also represent a win-win situation for both business units, but whether or not it will turn out to be a feasible option, it's not my call.
alby

Hello again alby,

Thanks, I understand now what you are saying. I respect your point of view, and of course its a valid opinion, but I still have trouble seeing it as a viable option right now.

By the looks of things, the current movement seems to be about any of the following factors:

Cutting the fat off Cargolux's operations, staff, network and getting rid of a long running "gravy train" that in certain departments must be costing the company a fortune !

Qatar systematically taking over Cargolux's routes, rights and customers. At the same time using their expertise to set Qatar up nicely.

Qatar establishing itself perfectly in a global cargo market, where it was lacking behind on its competitiors - Emirates and Ethihad.

Personally, I think they are out to do just about anything they need to, to get the last point done ! They are in fierce competition with the other operators down there to take a share of the cargo market.
So what better way, then to use Cargolux as your european hub, copy its expertise, utilise its route network and at the same time finding somewhere to use those rumoured 30+ A330 pax aircraft ready for cargo conversions.

All this should tie in nicely with the opening of the new cargo centre down in Doha this year on 12.12.12. Coincidence that they are here ?!? Nope !

Sorry but looking at all other scenarios, this one seems the most likely to me. Thats why I find the whole Cargolux Italia scenario implausible.
I believe they are concentrating their efforts at Cargolux in Luxembourg and the Doha cargo operation of Qatar and new cargo centre there.
I have no idea what this ultimately means For all of us at Cargolux and Cargolux Italia. And I am certainly no expert on any of this. This is only my opinion based on what little we have been told and what little common sense I still have ;) I am probably completely wrong !

So you can see that they have achieved the perfect storm. No one knows for sure where the ship is headed right now and there is precious little information coming from the helmsmen.

I agree with you, that right now everyone needs to stick together and not panic. If they should achieve any "divide and rule" then we are already at step one of getting shafted !

There are lots of rumors, so you have to be careful.

Speaking about Cargolux Italia, Why would you outsource to Italy ? Is much cheaper to outsorce to other cheaper places, most of them out of Europe.

Something is cooking behind the scenes, and still to early to see the final outcome. A lot of dust have to settle down. What is clear is that there is a cultural clash among the shareholders.

If I understand well the concept of joint venture, it's like to put in a basket joint resources, and then divide the outcome according to the agreement. If you put 50 per cent of the resources, you get a 50 per cent of the profit or losses.

So if that's correct, means that the unprofitable routes are dealt with the smaller airplane. Keep in mind, as well, that the acquisition of qatar is pending of approval from the EU/USA. So somehow, this may be another cause.


What is absolutely truth is that the 747-8 has brought, in my understanding the need for a second fleet. Having 140 tm of capacity is good on certain routes, but why use a -8 to carry 105 tm or less ? Nothing is as efficient as a twin engine aircraft. There is no question about having the Jumbo. Cargolux means Jumbo, but not all the aircraft have to be jumbos. Having smaller airplanes protect the company for the downturns, while the bigger capacity is needed in the upturns. The difficult part is assessing how many and when to purchase them.

Qatar can fill such needs, plus traffic rights, plus negotiation power, plus plenty of cash. So the second fleet doesn't have to be from CLX !!

Clx can offer expertise, good location and knowhow.:ok: But the deal has to done, and shareholders have to understand each other. This is the beginning, later comes other decisions, like CWA, outsourcings, CVI, etc:hmm:

Eh, lower cost base ? Is it really fair to compare the cost base of CLX to that of ICV ?

How much ICV is paying in leasing fees for KCV ? How much money do they spend on marketing, maintenance, on a sales team etc etc ? ;)

Why would this matter?

...It's like asking: How many former non Airbus guys are now A380 rated?

GlueBall, I dont understand what you are trying to say !

The reason I asked the question was twofold.

Non of the Cargolux Italia guys are 747-8 rated !

All the pilots at Cargolux are now 747-8 rated.
So if anyone wanted to outsource the pilots/crew then they would have to find 747-8 rated pilots to be able to keep the operation going.

Not too many of those around yet, unless you know any different !?!

My point was that they would have to give all the Cargolux Italia pilots -8 ratings and in the mean time who would fly the aircraft ???

Some more good questions:

http://egidethein.********.com/2012/...ripartite.html

GSS are all -8 rated and Atlas is just about done qualifiying 1000 pilots on the -8.