Air France-KLM and CMA CGM end capacity partnership

MARSEILLE : Air France KLM Group and CMA CGM have decided to end their cargo capacity partnership due to the constraints of a “tight regulatory environment” but are already in talks about a new working relationship.

First announced in May 2022, the capacity partnership between the two carriers was launched in April 2023 and was due to initially run for 10 years.

However, in a joint statement issued on January 16, the companies said: “The tight regulatory environment in certain important markets has prevented the cooperation from working in an optimal way.

“As a consequence, Air France-KLM and CMA CGM today announce their decision to withdraw from their existing agreements from March 31, 2024.”

The companies did not comment on whether the current market demand situation impacted their decision.

But they said they aim to continue working together.

“Air France-KLM and CMA CGM have begun discussions on new terms and conditions of a commercial relation to operate independently from March 31, 2024 onwards.”

They added: “Both groups remain committed to work collaboratively, to ensure cargo customers can continue to benefit from their respective networks.”

One area of controversy is CMA CGM’s ownership of top 20 freight forwarder CEVA Logistics, which has agreed a deal to purchase Bolloré Logistics.

Last year, AFKLMP Executive Vice President cargo Adriaan Den Heijer admitted that the airline had faced questions about the relationship with CEVA when the partnership with CMA CGM was announced.

However, he said that CEVA would be treated the same as any other freight forwarder and that boundaries had been put in place.

“There are legal thresholds but also ethical and business thresholds that will take care of that. And most customers recognise that. But of course, we have questions about that, and that is logical,” he said at the time.

The capacity partnership plan involved the two carriers jointly operating the full-freighter aircraft capacity of their respective airlines, initially including CMA CGM Air Cargo’s six freighter aircraft and Air France KLM Martinair Cargo’s (AFKLMP) six freighters.

The commercial partnership also covered Air France-KLM’s belly aircraft capacity, including more than 160 long-haul aircraft.

This combined offering was designed to offer the carriers greater freighter and belly capacity, a more extensive network of destinations, a mix of scheduled and charter flights, and improved transit times and flexibility, as well as tailored connections.

The two have also aligned systems, network strategies, revenue management, distribution and approach to customers – online they both utilise the same myCargo platform developed by the Franco-Dutch airline group.

As part of the agreement, CMA CGM also invested in a 9% shareholding in Air France-KLM, which will remain in place.  The companies have agreed to amend the existing lockup on CMA CGM shares in Air France-KLM’s capital, which will now be effective until February 28 next year.

However, they have agreed that CMA CGM will step down from the Air France-KLM Board of Directors on March 31.