CEO

Qatar Airways CEO in talks for share in Cargolux

AP News
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Posted: May 02, 2011 8:18 AM
Qatar Airways CEO in talks for share in Cargolux

Qatar Airways is in talks to buy a third of the freight airline Cargolux as part of ambitious expansion plans that would grab a bigger share in the world's rebounding cargo market, the carrier's CEO said Monday.

Akbar al-Baker declined to provide financial details of the 33 percent stake in the Luxembourg-based cargo hauler at a press conference in Dubai, but said the carriers expect to reach an agreement in the coming weeks.

Doha-based Qatar Airways is one of the region's fastest growing carriers, serving 100 destinations.

Al-Baker said Qatar Airways sees the Cargolux deal as a way to strengthen its bottom line without drawing management resources away from its growth strategies.

"We see there are synergies. Qatar Airways would like to expand. I've always said that we will only be interested in other airlines if they are healthy, if they are well-established (and) that they will add value to Qatar Airways," he said.

Cargolux Airlines International S.A. generated $59.8 million in profit in 2010, rebounding from a steep loss the previous year as the global economy improved and demand for air cargo increased.

"We will not invest in an airline, no matter how attractive it is that will take my management time and management resources to cure a sick individual," he added.

Cargolux operated a fleet of 14 Boeing 747-400 freighters at the end of last year, according to its annual report. It plans to gradually overhaul its fleet by replacing existing freighters with Boeing's newer but delayed 747-8 model. It hopes to receive the first three of 13 of those planes it has on order by the end of this year.

Al-Baker also announced three new cities to Qatar's network with flights scheduled to begin in November: Entebbe, Uganda; Baku, Azerbaijan, and Tbilisi, Georgia.

Last month, Boeing Co. said Qatar Airways placed orders for three Boeing 777 freighters and two 777-300ERs, an extended-range passenger version of the same plane. The airline currently operates 25 777s.

The companies did not disclose the financial terms.

Qatar Airways also has multibillion-dollar orders for 30 of Boeing's delayed 787s and options for 30 more. Al-Baker said Monday that concerns about the delivery date for the aircraft have been resolved.