ATW Daily News

AF KLM reportedly considering cargo restructuring

Monday September 14, 2009

Air France KLM is preparing an in-depth restructuring of its cargo business including a further reduction of its freighter fleet, transfer of all remaining freighters to its Martinair subsidiary and a 20%-30% increase in rates, according to Les Echos.

When contacted by ATWOnline, AF KLM said it would not comment on the substance of the report while contradicting several figures used by the newspaper.

AF KLM said on Sept. 4 that "with regard to cargo, which has been severely impacted by the steep decline in world trade, a restructuring plan is underway, including a much more significant reduction in capacity (of some 15%), also aimed at improving the load factor." It has been reducing cargo capacity gradually and at the end of the fiscal first quarter ended June 30 it operated 29 freighters (12 747Fs and two 777-300LRFs by AF, two 747Fs by KLM, six 747Fs and seven MD-11Fs by Martinair), five fewer than on June 30, 2008.

In July, CEO Pierre-Henri Gourgeon said overall group ATKs would be reduced further, although he did specify by how much. Cargo revenue plunged by a staggering 41.5% in the first quarter to €540 million, unit revenue fell 30% and the unit's operating loss of €196 million compared to a €16 million profit in the year-ago period.

AF KLM became the sole shareholder of Amsterdam-based Martinair in December (ATWOnline, Dec. 18, 2008). Martinair has a lower operating cost base than AF, a company source confirmed to this website. The three carriers have been integrating their cargo networks following the acquisition, as AF and KLM did following their merger.

by Cathy Buyck

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