French container line CMA CGM is aiming to expand its air freight reach in a new cooperation deal with Air France-KLM.
The shipowner said the agreement will see the two companies jointly sell their aeroplane cargo capacity as CMA CGM becomes a “reference” shareholder in its partner.
The 10-year deal is described as a long-term strategic partnership, bringing together complementary cargo networks to “build an even more competitive offer thanks to the unrivalled know-how and global footprint of Air France-KLM and CMA CGM”.
The combination will initially operate 10 full-freight planes, with 12 more units on order, jointly designed by both groups.
CMA CGM has four of the planes in operation, with eight yet to be built. Two of these may be operated by Air France-KLM.
The airline has six full-freighters and orders for four more.
The deal also covers long-haul conventional planes, of which Air France-KLM has more than 160.
“Significant” synergies are expected to be generated, according to the two companies.
CMA CGM’s stake in the airline will be 9%, reinforcing its commitment to the air freight industry.
The holding would be worth €241m ($254m) currently.
This investment could be made as part of a contemplated capital increase of Air France-KLM.
The French shipowner will hold the stock for at least as long as the 10-year duration of the cooperation agreement.
Growth of new division to accelerate
CMA CGM’s chief executive Rodolphe Saade said the move allows his group to “significantly accelerate” the development of the air division, CMA CGM Air Cargo.
This was created in February 2021.
“Through our stake in the company, Air France-KLM will be able to count on us to support its future development,” he added.
Air France-KLM group CEO Benjamin Smith said the deal is a landmark step.
“I am also extremely pleased that this commercial partnership with CMA CGM has resulted in their decision to invest directly in the Air France-KLM Group, demonstrating a strong testimony of their belief in the future success of our group,” he added.
CMA CGM bought four freight planes last year to complement its shipping services.
The move marked a further push into aviation by the Marseilles-based company just months after it took a minority share in a French airline.
In September 2020, CMA CGM acquired 30% of Groupe Dubreuil Aero, a French airline which owns Air Caraibes and French Bee.