CEO: Jade Cargo’s future to be decided by end of Q1

The fate of Jade Cargo International, a Lufthansa Cargo (LHC)/Shenzhen Airlines (ZH) joint venture that temporarily suspended operations Dec. 31 (ATW Daily News, Jan. 4), will be decided by the end of the first quarter.

LHC chairman and CEO Karl-Ulrich Garnadt told ATW in Seoul, South Korea, that Jade’s air operator’s certificate remains and all salaries for employees have been paid. He said the carrier’s six Boeing 747-400Fs are on the ground and will be maintained. “This is the best thing we can do regarding that situation,” he said.

Garnadt said that LHC is trying to sell its shares, “but I cannot tell you how this will end.” He said that bankruptcy could not be ruled out.

Jade, founded in October 2004 as a joint venture between ZH (51%), LHC (25%) and German development finance institute DEG (24%), has faced continuous financial difficulties.

Garnadt said that cargo routes to Asia will remain the most important market for LHC, as 50% of its business goes to Asia.

“Even we realized a drop in demand in markets like South Korea. In Hong Kong we saw a double-digit drop.” China has been affected, he said, “but in China there had been too much capacity.” Nevertheless, Garnadt said LHC has been able to increase sales from Europe to Asia by 22%. “This reduced some of the losses,” he said.