CargoLogic Germany has entered insolvency shortly after it was banned from European airspace. The all-cargo airline was handed the ban due to its links to the Russian-owned Volga-Dnepr Group.

CargoLogic Germany declared insolvent

Russian-owned CargoLogic Germany has entered insolvency less than two months after it was handed an airspace ban by Germany's civil aviation authority (LBA). The airline applied for insolvency restructuring on May 10th after it was banned from flying in EU airspace in early March.

The District Court of Leipzig has appointed Lucas Flöther as the provisional administrator. Flöther has worked on several high-profile airline insolvencies, including Condor, Air Berlin and SundAir.

CargoLogic Germany could return to the skies earlier than thought, with a return to operations still very much on the cards. The carrier still maintains a valid Air Operator's Certificate (AOC) and could restart with new investors.

Flöther said,

"We are checking whether it is possible to resume flight operations as quickly as possible, taking into account the sanctions. German insolvency law offers suitable options here."

The cargo airline's revenues effectively dried up after its ban, yet it still had to pay overheads such as staff salaries and leasing fees. All four of the airline's Boeing 737-400SFs are on lease from Vx Capital Partners.

Flöther added,

"The company had to continue to pay the high leasing installments due, which, according to an initial assessment, caused the company to become insolvent."

New owners needed

If CargoLogic Germany is to restart operations, it will need to do so under new ownership. While the company may not be under direct Russian ownership, its links to Russia are clear enough through UK-registered CargoLogic Holding.

Flöther said,

"The company had a solid order backlog and was well-known to its customer base. These are important prerequisites for a successful restructuring."

This holding company is not directly owned by Volga-Dnepr Group. Instead, it is under the personal ownership of Volga-Dnepr co-founder Alexej Isaykin, who has dual Russian and Cypriot nationality.

CargoLogic Germany has contested the airspace ban and claims of Russian ownership, claiming that its staff, headquarters and taxes are all based in Germany.

Administrator Lucas Flöther confirmed in a statement that the cargo carrier is considered to be Russian-owned, supporting a previous declaration from the LBA.

About CargoLogic Germany

CargoLogic Germany is a subsidiary of Cargo Logic Holding, which also manages UK-based CargoLogicAir. The German cargo carrier was established in 2013 and initially named Value Cargo Logistics before adopting its current name in 2018.

The airline faced opposition from other German carriers due to its Russian links. However, the company has always maintained its independence and distanced itself from its Russian ties.

CargoLogic Germany's fleet consists of four Boeing 737-400SFs with an average age of 25 years old. Since the ban was implemented, these planes have been grounded in airports across Europe.

The carrier is based in Leipzig and hires around 110 employees.

What are your thoughts on this situation involving CargoLogic Germany? Do you think its ban from European airspace is justified? Let us know in the comments.