- Air France-KLM and CMA CGM have signed a 10-year, exclusive air cargo partnership, the companies announced Tuesday.
- The two will combine their cargo networks, freighter capacity and dedicated services with the deal, per a news release. Their combined capacity currently consists of 10 full-freighter aircraft, with 12 more on order. Air France-KLM also has belly capacity in more than 160 long-haul aircraft.
- CMA CGM Group plans to take an up to 9% stake in Air France-KLM Group as part of the agreement, which "will reinforce its commitment in the air freight industry," according to the release. The deal remains subject to approval by relevant regulators.
The arrangement will help CMA CGM advance its ambitions of offering customers end-to-end shipping and logistics services, CMA CGM Group Chairman and CEO Rodolphe Saadé said in a statement.
"Through our stake in the company, Air France-KLM will be able to count on us to support its future development," Saadé said.
The investment also allows CMA CGM to spend "money that's burning" in its pocket, Peter Sand, chief analyst at ocean and air freight benchmarking and analytics platform Xeneta, said in a LinkedIn comment. CMA CGM Group saw revenues jump 78% YoY in 2021, and the company has invested heavily in industrial assets like aircraft while also accelerating its overall development "through strategic acquisitions," Saadé said.
Air freight has become a more lucrative business for carriers since the COVID-19 pandemic squeezed available capacity, causing rates to climb. Air freight rates in April 2022 were 145% higher than in April 2019 despite a 5% drop in volume, according to an emailed press release from Clive Data Services, part of Xeneta.
CMA CGM doesn't have the same heavy presence in air cargo that it does in ocean shipping — its air cargo division was created in March 2021, and Saadé said the partnership will allow it to accelerate that division's development. Group subsidiary CEVA Logistics transports 400,000 tons of air freight annually.
The partnership will tap into Air France-KLM's existing air freight capabilities and experience, along with CMA CGM's logistics and multimodal services, the release said. The two will jointly sell their air freight capacities, providing customers with more transportation options, CMA CGM Group Executive Officer Tanya Saadé Zeenny said on LinkedIn.
Working together "will significantly strengthen and expand [Air France-KLM Group's] position in the air cargo industry," CEO Benjamin Smith said in a statement. KLM, part of the group, ranked 23rd in international air cargo activity in 2020, with 3 million scheduled cargo tonne-kilometers flown internationally, according to IATA.
Air France-KLM's network is built around its global hubs at Paris-Charles de Gaulle airport and Amsterdam Airport Schiphol, which serve 295 destinations in 110 countries, per the release.
A resolution calling for a CMA CGM representative to be appointed to Air France-KLM's board will be presented at the next shareholders meeting on May 24.