Air France-KLM considers ending freighter operations

Breaking news: Late yesterday, well after this post went up, we learned that Air France-KLM has already begun the process of getting rid of its 747-400 freighters — some of which are rumored to be going to US-based Centurion Cargo.

Air France-KLM is reported to be considering exiting the main-deck freight business. The Bloomberg news service quoted “two people familiar with the carrier’s plans” as saying Air France-KLM is about to undertake a review of its money-losing cargo business, with ending freighter operation one of the options.

After seeing losses steadily mount in its cargo operation, AF-KLM made the decision two years ago to focus on yield, rather than volume, and to retire some of its freighters. But even with this plan in place through 2013, the carrier suffered an operating loss of €202 million on its cargo operation for the year – almost as great as the €222 million loss in 2012.

The carrier’s Board will discuss the future of the cargo operation at a meeting later this month, and a decision is expected by the end of the third quarter. Will that decision be to axe the entire remaining freighter fleet and offer belly capacity only? This is the path taken by the big US carriers, and more recently by IAG. But Air France-KLM is consistently one of the top cargo carriers in the world, and it is hard to imagine it without freighters.

Cargo Facts does not know what the Board’s decision will be, but we can report that one observer at an Air France-KLM press event in Amsterdam today came away saying that cargo boss Erik Varwijk “as good as confirmed they’ll be out of freighters.” Hardly firm evidence, but perhaps an indicator.


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