Cargolux to spend billions on new planes

Luxembourg freight airline Cargolux on Wednesday committed to spending billions of euros on a years-long effort to upgrade its aging aircraft fleet.

The state-owned cargo carrier finalised an order with Boeing to purchase at least 10 777-8 freighter aircraft, with the option to buy six others needed to replace its 16 current Boeing 747-400 jets.

Neither company would disclose what Cargolux would pay or when it would start taking delivery of the jets.

In January, Cargolux competitor Qatar Airways ordered dozens of the 777-8 freighters for an average price of $400 million (€412 million) each. That would mean that at today's prices, Cargolux has agreed to spending in the range of €4 billion for 10 aircraft or €6 billion for 16 jets.

Six other airlines placed earlier purchase orders for the freighter jet, which came on the market in January and will only begin being delivered to customers in five years.

Cargolux and Boeing had announced in July that the Luxembourg company would buy some of the 777-8 aircraft, but how many was not clear until Wednesday.

Cargolux's labour unions celebrated the purchase as a sign the company was preparing for its future, but also demanded that the jobs maintaining, supporting and flying the jets stay in Luxembourg.

"The introduction of the Boeing 777-8F by Cargolux must not be used to relocate jobs abroad or to employ staff for this aircraft type outside the Cargolux collective work agreement," the unions said in a statement.

The jets being replaced were designed in the 1960s and have grown outdated, but Cargolux's 14 newer-model 747-8 aircraft should be available until 2040 and even beyond, Cargolux CEO Richard Forson said in an interview with the Luxembourg Times last year. The company has spent years planning to replace aging aircraft, Forson said.

The cargo carrier tucked $970 million (€925 billion) into reserve funds out of its record $1.3 billion (€1.34 billion) profit from 2021, according to the company's annual financial statement filed in May. Cargolux also sent $200 million (€207 million) in dividends to its owners.

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