Martinair’s days appear numbered

Air France-KLM released its second-quarter and first-half results today, and while the passenger and maintenance operations were both profitable, continuing losses in the cargo business continue to drag on the company’s bottom line.

The solution? Cut back further on freighter operations.

Air France-KLM has long been one of the biggest cargo carriers in the world, but over the past few years it has gradually reduced its freighter fleet, and focused more on filling the bellies of its widebody passenger aircraft. The freighter fleet currently stands at eighteen units.

• Five at Air France: Three 747-400ERFs and two 777Fs. Of these, one of the 747s is parked.

• Thirteen at KLM (operated by the Martinair subsidiary): Four 747-400ERFs, three 747-400BCFs, and six MD-11Fs. Of these, two of the 747-400BCFs and one of the -400ERFs are parked.

Last year AF-KLM announced further reductions to bring the fleet down to just ten units by 2015 – two 777Fs at Air France and eight freighters at Martinair.

But last month, it became apparent that the AF-KLM Board had quietly started investigating the possibility of selling Martinair, and perhaps even ending freighter operation altogether. In the press release accompanying the second-quarter results today, the company made it official: “Having already decided in October 2013 to reduce its full-freighter fleet to 2 aircraft in Paris and 8 aircraft in Amsterdam by 2015, the group is now looking to further reduce its Amsterdam-based full-freighter exposure either through a partnership with a third party or through internal restructuring.”

Speaking at the results presentation, AF-KLM CEO Alexandre de Juniac elaborated on the plans for Martinair, saying: “By the beginning of September we will make a decision on whether we will have a partnership, joint venture or partial sale.” He also indicated that by 2016, the carrier would have “mimimal” freighter capacity.

The problem with the plan to sell all or part of Martinair, is that there is very little chance of finding a buyer. We analyzed the prospects for a full or partial sale several weeks ago, and if anything, prospects have dimmed since then.

Given all this, we feel the likely outcome is that Martinair will be gradually wound down over the next two years, and that by some time in 2016 Air France-KLM will operate few, if any, freighters.