European cargo carrier, which is 35 percent owned by Qatar Airways, has reported a net loss of $18.3m in 2011.
The Luxembourg-based carrier said its performance compared to a $59.8m profit the previous year and blamed oil prices, higher leasing costs and excess capacity in the global air cargo market
In a statement, it said revenue rose 8.4 percent to $1.87bn while volumes shrank 3.6 percent to 658,000 metric tons.
The statement said the situation in global air cargo markets in early 2012 continued "to look challenging while the outlook for economic recovery remains frail".
Cargolux said it also expects load factors and profitability to suffer from continued weakness in cargo traffic in the near to mid-term future and has adopted a cautious budget for 2012 with plans to reduce costs and enhance revenue.
The company added that it expects to grow its Boeing 747-8 freighter fleet with additional deliveries this year.
Since Qatar Airways bought its stake in Cargolux in June last year, both airlines saw cargo traffic increase at their hubs as Cargolux moved freight through Doha and Qatar Airways fed the Company’s Luxembourg base with regular Boeing 777 freighter flights in 2011.
Frank Reimen, Cargolux president and CEO, said: "After the remarkable recovery in global air freight markets in 2010 following a disastrous 2009, we saw load factors and yields come under pressure from the second half of 2011, in particular in the last quarter, as a result of weakening demand and rising capacity with a supply/demand gap at year end of 5.7 percent.
"Besides, our business was adversely affected by record fuel price levels. Therefore, we have developed a comprehensive action plan for 2012 to respond dynamically to the current downturn but also to take advantage of any potential upswing in global air freight markets."