Cargolux swung to a net profit of $59.8 million in 2010 from a $153.3 million loss in 2009 to end a three year losing streak that pushed Europe's largest all-cargo airline to the brink of bankruptcy.
The Luxembourg-based carrier boosted income 29.3 percent to $1.75 billion as traffic grew 8.9 percent to 683,380 tons and the load factor of its fleet of 14 747-400 freighters and a leased 747-200 improved by 4.3 percentage points to 73.3 percent.
"The company managed to achieve a remarkable turnaround," Cargolux said. Cargolux, which ran up losses of $261 million in 2007-2009 and was hit with heavy anti-trust fines, had to be rescued by its shareholders and the Luxembourg government in late 2009. It last made a profit, of $82.6 million, in 2006.
"The recovery of the air cargo market continued into 2010, and, while it was initially volume driven, prices started to recover in March," the company said.
The Asian markets were particularly strong and led the recovery even though China showed signs of a slowdown during the final months of 2010.
Cargolux said it made "significant progress" in 2010 in reducing its exposure to anti-trust cases. It reached settlements last year with competition regulators in Canada, South Korea and New Zealand and is
appealing the European Commission's $112.7 million fine
appealing the European Commission's $112.7 million finefor participating in a price fixing cartel.
The carrier reached a provisional $35.1 million settlement with U.S. civil class action plaintiffs in December.
Cargolux's long serving President and CEO Ulrich Ogiermann
stepped down in November
stepped down in Novemberafter being indicted on price fixing charges by the U.S. authorities.
The carrier said it expects to take delivery of the first of 13 747-8 freighters it has on order during the second half of 2011.
"Clearly 2011 is set to be more testing," said Cargolux President and CEO Frank Reimen. "Yields are likely to remain under pressure from overcapacity building up in some parts of the world, most notably in China."
"Any prolonged surge in oil prices -- denting the profitability of our highly cyclical business -- must be offset by higher productivity and enhanced competitiveness," Reimen said.
Cargolux said it faces "significant" cash outflows in 2011 related to anti-trust fines of $89.6 million and capital expenditure on fleet renewal.
-- Contact Bruce Barnard at email@example.com.