Is Cargolux’s unique culture strong enough?

My Orchids. Dendrobium "Transparency". Photo ET

Is Cargolux’s unique culture strong enough? 

Air Cargo News through its deputy editor Thelma Etim made an honest assessment of Cargolux’ present situation. The headline casts the fundamental question about the state of the company’s unique culture. It has been the key of past success, and is essential to overcome the present challenges. Transparency is one of the major ingredients to foster morale, a key building block of that famous Cargolux culture. It has suffered. A recent survey on issues of concern to employees could only convince 30% of them to bother responding. That’s a failure of management communication.

In his last press conference, the new CEO Dirk Reich seemed to talk more openly about challenges as he perceived them. There is of course posturing in view of upcoming wage negotiations, where he clearly announced management’s colors. He did also a better job than CFO Forson about 2014 losses so far, though both used convoluted language to hide reality, such as “we missed our target by $11 million in the first six months” for Forson, and expecting a good second half, total losses for 2014 could be contained in the order of $20 million, according to Reich. Which tells us nothing else, than we don’t want to be open about this, and no one at the press conference or interview asked the obvious follow-up question: what are those numbers now? The lack of transparency creates uncertainty, source of speculation, and degradation of a culture. However recouping both numbers cited by Reich and Forson, and given a budgeted loss for the first half of 2014 of $14.4 million, it is logical to extrapolate that CV lost $25.4 million by June 30^th. Why not being upfront? Expose the problem, as all sides have to come up with a solution.

Not helping is the attitude of the Minister of Transportation, who is hiding under his desk with his grotesque claim that CV is a “private” company. He is in control of 57% of the company, considering the other shareholders who are owned by the government. So the claim serves basically to take shelter from criticism, but avoiding to be in charge is undermining the culture of trust. And certainly conflicts with his adventurous journey to Zhengzhou in April to officially inaugurate the ghostly maiden flight of the so-called “private” company, flight that never arrived.