Air France-KLM looks likely to take full commercial control of CMA CGM Air Cargo, which is restructuring its fledgling business – but has only until 1 December to form a full cargo agreement, reports the Loadstar.
Long-term strategic partnership
The shipping line announced a long-term strategic partnership with the airline group in May, but a month prior to that, it appointed Mark Sutch, Cathay Pacific Cargo veteran, to head the airline’s commercial team.
Observers welcomed the news. Some in the market had expressed concern over CMA’s lack of experience in air. One executive noted that its Air Belgium-operated A330F routes, which at times involved multiple stops, would struggle to make a profit.
He said: “The original route plan was a disaster. It would have been lousy revenue, with large costs and terrible planes.”
“Mark Sutch would give CMA the experience it clearly needed,” he added.
However, after just three months at the new airline, during which time it received its AOC, redeveloped its A330F routes and took delivery of two 777Fs, Mr Sutch left the carrier.
AF-KLM assumes the commercial lead
A knowledgeable source said that, following the proposed tie-up with AF-KLM, Mr Sutch would no longer be managing the commercial side of the airline and had decided to leave.
“He was employed on the understanding that CMA was building a standalone all-cargo airline, but following the JV announcement, the goalposts moved. In the new joint-venture, it is AF-KLM that will assume the commercial lead, at least for the first couple of years, thus the scope is very different.”
And now, two experienced executives have expressed doubt that the AF-KLM deal is the right way forward. One insider said: “I understand the strategy to create the JV, but I think it’s a great shame that the standalone airline project was not taken forward. It effectively makes CMA CGM a capacity provider to AF-KL, which has a very established brand.”
“Once the JV is up and in place, really AF-KL is in the driving seat. CMA has a very small team and will find a place in the bigger structure.”
While CMA now has its own airway bill and flight numbers, the plan is for it to be metal-neutral and sold by AF-KLM; it will not be expanding its global sales team. CMA will use all AF-KLM’s systems, including revenue management and pricing, and day-to-day work will be dominated by AF-KLM.
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Source: The Loadstar
