Cargo B Airlines Shuts Down

NYK-backed carrier blames decision on pricing decline, falling yields

Belgian freight carrier Cargo B Airlines ceased operations this week, saying the global economic downturn sent air freight pricing plummeting and ruined the airline’s financial stability.

The shutdown made Cargo B the largest cargo carrier this year to succumb to an economy that has seen international air freight traffic fall 17.4 percent and airlines pull back cargo capacity by some 10 percent.

The airline had operated two 747-400 freighters between Europe and Africa and South America since it was launched in October 2007 by a management team that included former DHL executive Rob Kuijpers.

Cargo B’s financial backers included NYK, the Japanese shipping giant that also operates Nippon Cargo Airlines. Local reports in Belgium said the airline was seeking new financial backing but failed to recapitalize and shut down instead. Airline officials said demand for its scheduled and charter services had remained strong but that pricing had deteriorated this year and that low yields had scared away prospective investors.

"The present economic climate, with no improvement foreseen in the near future, and with continued low rates in most markets, has forced us to come to this conclusion," the airline said in a statement. 

The privately held carrier did not release financial and traffic information, but Brussels Airport where its business was based has seen cargo transport more deeply than the general worldwide downturn.

All-cargo flights at Brussels were down 50 percent in May from the same month a year ago, and overall freighter operators at Brussels fell by a third in 2008 from 2007.

 

Source: The Journal of Commerce