News / CMA CGM losses said to be at heart of 'divorce' from AF-KLM

CMA CGM Air Cargo and AF-KLM Cargo’s decision to end their commercial relationship is thought to be at the behest of the shipping line, which is said to be facing low demand for its air services. 

Today the pair announced that the 10-year joint-venture for cargo space on the freighter and passenger aircraft of AF-KLM and CMA CGM Air Cargo to be sold and shared globally – with the exception of the North American market – would end after just a year. 

CMA became a 9% shareholder of Air France at the time of the deal, in a lock-up which was due to expire on 15 June 2025, with a further 50% locked until June 2028. That has now been amended to a lock-up period for all shares ending on 28 February 2025.

CMA CGM will also step down from the Air France-KLM board of directors on 31 March this year.

The airlines said the JV was being reframed, as “the tight regulatory environment in certain important markets has prevented the cooperation from working in an optimal way”. 

They added that they would begin discussions on “new terms and conditions of a commercial relationship to operate independently from 31 March” and that “both groups remain committed to work collaboratively, to ensure cargo customers can continue to benefit from their respective networks”. 

But sources told The Loadstar CMA CGM had become concerned over losses at its air division.

“The airfreight product is losing money globally now,” claimed a CMA source at the end of last year. One Dutch media report suggested CMA CGM Air Cargo’s losses amounted to some €70m to €100m last year, with CMA also concerned about low load factors on its aircraft. 

The JV deal was said to be initiated by Air France, according to a source, while KLM Cargo had been more sceptical. 

“It was forced through by Air France to help out a fellow French company,” said one airline executive. “But CMA CGM’s philosophy of how it should deal with air cargo was not the same as AF-KLM’s. But they gave it a try. A marriage needs to work for both parties though – you don’t meet on a Tuesday and go to the altar on Wednesday.” 

The source added that KLM had concerns about the deal: “KLM thought it would be difficult, especially as CMA owns a large forwarder. It was awkward for other customers.” 

The deal was negotiated in May 2022, but did not begin until April 2023. The source said: “It all looked possible during the Covid days, when everyone was making money. But people forgot where we were before Covid – the industry is always on a wave, up or down. People had dollar signs in their eyes.” 

CMA CGM Air Cargo is based at Paris Charles de Gaulle and has four A330Fs and two 777Fs, all of which ply their trade between Europe, Africa and Asia, with no flights to North America – the only region where AF-KLM was not involved in CMA’s sales. 

CMA CGM is currently also integrating Bolloré Logistics, a possible further blow to forwarders wary of booking with the French group. And one CMA CGM Group source told The Loadstar recently: “Other forwarders are wary of the relationship between CMA and Ceva. And they definitely should be wary of it; their concerns are completely justified.” 

CMA CGM Air Cargo installed a new CEO in September, Damien Mazaudier, a former CMA executive who was at the time CEO of Monaco private helicopter flight company Monacair. He replaced Guillaume Lathelize, who spent just a year in the job. Mr Lathelize replaced Oliver Casanova, who was the airline’s first CEO, for some 18 months.

Without AF-KLM, it seems likely that CMA CGM will need to hire additional airline staff – but CMA CGM failed to respond to requests for comment – as did AF-KLM. 

A source at the carrier told The Loadstar last year some managers were leaving the company, adding: “There have been quite a few changes and not everyone is happy with some of the new people.” 

Meanwhile, CMA rival MSC is also going it alone in air freight. Its four 777Fs are operated by Atlas Air, but MSC told Stat Times it would have a fifth 777F in the fleet by the end of this quarter, which it will operate on its Italian AOC, which it got by acquiring AlisCargo Airlines.