For insiders, the announcement comes as no surprise. The cooperation between the cargo airline and the French shipping line, announced with great fanfare at the start, is coming to an end before it really began. Both companies are going their separate ways, but CMA CGM will remain a key shareholder in AF-KLM.
In a joint press release published 16JAN24, the two companies announce that their separation will take effect on 28FEB24. Both companies blame this step on the political hurdles set up by governments, as indicated in their release: “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 […] withdraw from their existing agreements from March 31, 2022. 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.”
The companies do not specify which ‘important markets’ they are referring to. But it can be expected that tensions between the Netherlands and the USA over antitrust clearance for joint Air France-KLM and CMA CGM cargo flights between Amsterdam and destinations in the U.S. got no clearance by the U.S. regulator after Schiphol announced to cut slots at SCL. This angered operators like JetBlue which asked Washington to pursue countermeasures. However, in their joint statement, Air France-KLM and CMA CGM do not address this aspect.
Long-term partnership ended quickly
Meanwhile they informed their customers that the groups “remain committed to work collaboratively, to ensure cargo customers can continue to benefit from their respective networks.”
Presumably to reassure the stock markets, both players also point out that, despite their split, CMA CGM remains a core shareholder in Air France-KLM, holding 9%.
The joint cooperation dates back to 18MAY22, when the cargo carrier and the container liner joined forces by signing a major long-term strategic partnership in global air cargo, initially set to last for ten years. Practically, the tie aimed at combining their complementary cargo networks and link their full freighter capacity, became effective in MAY22. It was intended to help meet customers’ ever-increasing demands for more integrated and resilient supply chains.
According to the deal, Air France-KLM and CMA CGM planned to operate a fleet of 10 freighter aircraft, with four belonging to the shipping line and six to Air France-KLM Cargo. The partnership also covered Air France-KLM’s belly aircraft capacity available on the Franco-Dutch carrier’s 160 long-haul aircraft.
Many questions, few answers
The question now, is what comes after the breakup? Will the air freight newcomer CMA CGM Cargo market the fleet of its four B777Fs on its own or commission a GSA to do so? Prior to the agreement with Air France-KLM, the French group, ECS, was responsible for selling the capacity. An open issue is also what will become of the order for a further 9 freighters, among them 4 A350F. Or will the Shipping Line step out of the air freight business altogether?
It can be expected that CMA CGM will sell their capital shares in Air France-KLM come 2025 since the existing lockup period which originally expired in 2028 was amended and ends now on 28FEB25. Until then, many unresolved issues have to be straightened out which include the role of CMA CGM’s subsidiary, CEVA. Today, the only certainty is that CMA CGM will step down from the Air France-KLM Board of Directors on March 31, 2024 – a clear signal of partition. It must also be noted that the project of cooperation between a cargo airline and a shipping company, which began with great hope, has vanished into thin air.
