ANNOUNCES RECORD PROFITS FOR 2003

- CARGOLUX PERFORMED WELL IN 2003 DESPITE DIFFICULT MARKET CONDITIONS AND A VERY COMPETITIVE ENVIRONMENT.
- THE LUXEMBOURG-BASED COMPANY CONSOLIDATES ITS POSITION AMONG THE LEADERS IN THE WORLDWIDE AIRFREIGHT BUSINESS.
- IN 2003, CARGOLUX ACHIEVES ITS TENTH CONSECUTIVE PROFITABLE YEAR, WITH A RECORD OPERATING RESULT OF USD 65 MILLION.

Luxembourg, 21 April 2004 – In 2003, Cargolux Airlines International S.A. registered increasing sales and operating profit, topping the previous record of 2002. The operating profit reached US$64.9 million, up from US$55.6 million in 2002. Net profit increased to US$70.9 million, up from US$49.6 million in 2002.

Despite difficult market conditions, Cargolux succeeded in raising its operating revenues by 18.18% to US$954.3 million. The company's core business, the sale of air lift and related transportation services, generated over 98% of the income. Tonne kilometers flown grew by 6.5% to 4,429 million. This compares favorably with an industry-wide rise of only 4.8%. It puts Cargolux at third position among the top European carriers where the company remains the biggest all-cargo airline. The worldwide market share remained stable at about 4%, with Cargolux in ninth position worldwide. Total block hours increased by 9.5% to 71,258.

Operating expenses increased by 20.5%. This was mainly due to a change in the company’s depreciation policy, a step-up in the Rolls Royce engine maintenance contract and the continued high fuel prices. Additionally, some expense items such as personnel costs and benefits, handling and trucking were negatively impacted by the close to 20% appreciation of the euro versus the US dollar.

BALANCE SHEET STRENGTHENED
As from fiscal year 2003, the company has reduced the period for the depreciation of its fleet from 20 to 18 years. This resulted in an additional charge of US$ 10.4 million, compared to 2002. The company was also able to pay down debt and improve its gearing ratio, i.e. the ratio of net financial debt to shareholders’ equity, from 280 % at year-end 2002 to 205 % at year-end 2003.

OPERATIONAL EXCELLENCE
Customer focus, flexibility and the ability to quickly react to changes, as well as operational excellence, have consolidated the position of Cargolux among the top air cargo carriers worldwide.

The SARS outbreak in Asia and the war in Iraq delivered proof of Cargolux’s response and adaptation capacities. SARS was a threat to the trade between Asia and Europe. But it could not affect Cargolux’s short term business results: as an all-cargo carrier, the company was able to maintain all schedules, which are purely driven by the demands of the cargo customers worldwide.

“Competitiveness shows in an uncompromising dedication for quality”, says Cargolux President and CEO, Uli Ogiermann. “We also need to swiftly react to our customers and build our network according to their demands. The only yardstick of our performance is our customers’ satisfaction. Once this is achieved, we have a sound basis for a strong economical performance and also for further profitable growth, which will be tackled.”

STRONG NETWORK SERVING THE WORLDWIDE MARKETS
Asia showed the strongest performance in the Cargolux system, mainly due to a surge in demand for export capacity from China. Hong Kong and Shanghai were the gateways with the strongest growth in Cargolux’s network. The US markets improved visibly, while South America remained weak in the first half of the year and started to recover in the second half. Europe showed a slight decline in tonnage throughout 2003, which can be considered an achievement under the given circumstances.

In 2003, Cargolux successfully built on long-term cooperation with strategic focus on key markets. The company was able to use existing relationships to expand its presence in important areas and gain traffic rights in others. Strategic partnerships have helped Cargolux to broaden the scale and scope of its operation and strengthened its network. Reacting to forwarders’ demands, the company started new services to Fort de France and Kinshasa and added capacity to China and the US West Coast. In early 2003, it also added Rio de Janeiro and Panama to its system.

ENVIRONMENTAL RESPONSIBILITY
Cargolux’s commitment towards a reduced impact on the environment is illustrated by its policy of operating the most modern and environmentally friendly freighters available. The Boeing 747-400F noise footprint during take-off is 50% smaller than its predecessor’s, the B747-200F. Additionally, the aircraft has an 18% lower fuel consumption and its engines emit between 20% and 50% less hydrocarbons, carbon monoxide and nitrous oxides. In 2003, Cargolux implemeted additional operational measures during take-off and landings in Luxembourg that further reduced the noise level.

OUTLOOK FOR 2004
“Barring unforeseen events, Cargolux is on course to achieve another strong year” says David Arendt, CFO of the Company. “In any event, the first quarter results point to that direction.” The increase of the fleet by one unit - the 13th B747-400F joins Cargolux on 22 April 2004 - should boost revenues.

However, risk factors for 2004 remain, including high fuel prices, overcapacity in certain markets and imbalances on certain routes.

ROGER SIETZEN RETIRES
Roger Sietzen, Cargolux’s long-standing Chairman, announced his decision to step down from his position. As Chairman and former CEO, Roger Sietzen has uniquely contributed in creating the Company in 1970 at the request of the Government, in shaping it and in making Cargolux what it is today - a financially strong and profitable company that is a leader in its industry. Cargolux is deeply indebted towards its former Chairman and last remaining founding member for his 34 years of guidance and leadership.

For a full copy of the 2003 annual report, please visit www.cargolux.com

For more information, please contact:
Marc Schonckert, PR department
Cargolux Airlines
Tel +352 4211 3929
Fax +352 4211 3509
mschonckert@cargolux.com