French shipping giant, CMA CGM will invest in Air France-KLM in a deal that would combine the airfreight capacity and sales of the two logistics players.
CMA CGM is looking to acquire a 9% stake in Air France-KLM Group as part of the new partnership that also includes combining their freighter operations.
"The CMA CGM Group and Air France-KLM Group announced that they have signed a long-term strategic partnership in the air cargo market. This exclusive partnership will see both parties combine their complementary cargo networks, full freighter capacity and dedicated services in order to build an even more competitive offer thanks to the unrivalled know-how and global footprint of Air France-KLM and CMA CGM," the firms said.
The new deal is for a 10-year exclusive strategic partnership that will see the airline and shipping group combine their current fleets of 10 full-freighter aircraft as well as the 12 freighters they have on order.
This new commercial partnership also covers Air France-KLM’s belly aircraft capacity, including over 160 long-haul aircraft.
End-to-end solution
The CMA CGM Group is moving forward with its plan to develop and provide end-to-end shipping and logistics solutions in order to support its customers' supply chains. The Group announced, during the last three years, the acquisitions of CEVA Logistics, Ingram Micro’s Commerce & Lifecycle Services (CLS), Colis Privé and GEFCO.
In March 2021, the CMA CGM Group also created an air cargo division, CMA CGM Air Cargo. CMA CGM operates four full freighter planes and has placed orders for an additional eight aircraft, two of which may by operated by Air France-KLM.
Air France-KLM, on the other hand, has a fleet of six full freighters – based at Paris CDG and Schiphol – and has outstanding orders for four additional planes.
"The strategic commercial partnership is expected to generate significant revenue synergies including the joint design of the full freighter networks and enhanced products and services mix opportunities," the firms said, noting that it will help meet customers' ever-increasing need for more integrated and resilient supply chains.
It added that the partners will leverage Air France-KLM’s vast existing franchise, experience and capabilities in air freight, backed by a global cargo network while CMA CGM will mobilize its large commercial network and global logistics platform and will complete this offer with innovative logistics and multimodal solutions, particularly in sea and land transport.
Boost to CMA CGM Air Cargo
Rodolphe Saadé, chairman and CEO of the CMA CGM Group said: "I am very pleased with this strategic partnership with Air France-KLM. It allows us to significantly accelerate the development of our air division, CMA CGM Air Cargo, which was created just over a year ago, and to position our two companies among the world's leading players in air freight."
"This partnership is fully in line with CMA CGM's strategy and its ambition to become a leader in integrated logistics, for the benefit of its customers. Through our stake in the company, Air France-KLM will be able to count on us to support its future development," Saadé added.
Benjamin Smith, Air France-KLM Group CEO for his part noted that the "strategic partnership" leverages the complementary skills, expertise and activities of Air France-KLM and CMA CGM.
"It is a landmark step which will significantly strengthen and expand the Group's position in the air cargo industry. 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," Smith added.
CMA CGM and Air France-KLM said the deal remains subject to approval by the relevant regulators and consultation of employee representatives.