Cargolux stated that the air cargo industry is moving towards a "more normalized pattern" but cautioned about the impact of ongoing geopolitical tensions worldwide.

Europe's biggest all-cargo airline released its outlook after reporting a positive net result for its 2023 financial year despite challenging market conditions last year.

In 2023, Cargolux generated US$2.975 billion in revenues and profit after tax of US$286 million.

"This financial result allows the further strengthening of the group's Balance Sheet to enable the airline to remain resilient in weathering the expected volatility in the industry," it said in a statement.

Cargolux noted that the first half of 2023 saw the cyclical nature of the industry return with levels well below pre-Covid times and significant pressure on rates due to lower demand levels compounded by increasing levels of available belly capacity.

The restrictions on the use of Russian airspace continued to impact operations to and from North Asia with longer flight paths, increased fuel burn and higher operational costs.

It added that geopolitical tensions amplified in the Middle East with the outbreak of the conflict between Israel and Hamas also created challenges for global trade and further affected customer confidence.

"The disruption of shipping in the Red Sea at the end of the year did not benefit air cargo significantly, with only a marginal increase recorded in the shift from sea to air," the Luxembourg-headquartered all-cargo airline added.

However, Cargolux said the demand for dedicated freighter capacity saw a welcome surge in demand in the fourth quarter of 2023 due to the volume of e-commerce shipments.

Outlook for 2024

Looking ahead, Cargolux signalled optimism of better operating conditions for the air cargo industry — but also warned of challenges brought by the continuing geopolitical tensions in many parts of the world.

"After the years of upheaval due to the COVID-19 pandemic, the air cargo industry is heading towards a more normalized pattern," Cargolux said, noting that the cyclical nature of the market, the return of belly-hold capacity on a large scale, and the global economic downtrend "will no doubt affect air cargo."

"The ongoing increase in geopolitical tensions worldwide makes it difficult to predict future demand and cost implications," Europe's biggest all-cargo airline, added.

It noted that returning volatility, as well as increasing global concerns about sustainability, especially the reduction of CO2 emissions and the cost implications thereof for the aviation sector, will continue to put pressure on our industry.

Cargolux operates a fleet of 30 Boeing 747-8 freighters and Boeing 747-400 freighters.

As a future-geared airline, Cargolux also has 10 efficient Boeing 777-8F in order to replace its ageing 747-400 aircraft.

Cargolux worldwide network covers over 75 destinations on scheduled all-cargo flights and offers full and part-charter services. 

Last year, Cargolux also acquired three Air Tractor AT-802F Fire Bosses for its new business unit, Aquarius Aerial Firefighting.