Dual hub for air cargo takes shape

Henan Civil Aviation and Investment Co acquired 35 percent of cargo carrier Cargolux.[Photo provided to China Daily]

Partnership allows high-value, time-sensitive items to flow seamlessly between countries

Zhengzhou is located in east-central China, an area with a population of 300 million people. Luxembourg sits at the heart of the 500 million population European market. These mega-markets are being linked by an ambitious and innovative partnership between the Chinese authorities and Cargolux, the world's seventh-largest cargo airline. "With our Chinese partners we are establishing 'Lux Fresh', a dual hub through which high value,fragile and perishable goods will flow, linking two major economic zones," said Francois Bausch, Luxembourg's minister for sustainable development and infrastructure.

Chinese manufacturing is increasingly sophisticated and Chinese consumers now demand the best, particularly high-level European products. Hence the growing demand for fast, secure and reliable airfreight services in both directions. These are the trends that encouraged Henan Civil Aviation and Investment to take a 35 percent stake in Cargolux in 2014. The Luxembourg state controls the remaining 65 percent.

"We will grow our business in Shanghai and Zhengzhou, particularly now that we have secured trans-Pacific rights into Chicago," said Paul Helminger, Cargolux's chairman. "Our partnership with HNCA is a gigantic opportunity which will give us access to routes we do not fly, particularly intra-Asia and Asia to Africa," he added. The partnership with HNCA has helped with the all-important acquisition of traffic rights.

The link to the United States is particularly important, explained Cargolux CEO Dirk Reich. "China and the US are two key markets for us, and we are one of the few global players now able to operate from three hubs," he said. Weather, exchange rates and global trade all change and Cargolux now has the flexibility to tailor its operating model to every circumstance.

Having top-class facilities in their home airport is extremely important for the firm. "We are very proud of being the fifth-leading airport in Europe in terms of air-freight and the seventh-leading company for express services like DHL and UPS," said Johan Vanneste, CEO of Luxembourg Airport. To a large extent, this is due to the work of the hub's main handling agent LuxairCargo. "We have invested very heavily in technology for our cargo installations and we have an excellent team of 1,300 people," said Adrien Ney, the Luxair Group CEO.

A central location, well-equipped facilities, excellent infrastructure and a well-designed regulatory environment all contribute to Luxembourg's winning formula in this business.