Martinair for sale? Who will buy it?

Earlier this year we reported that Air France-KLM, which has been gradually paring back its main-deck capacity, was considering exiting the main-deck freight business altogether. The subject was discussed at a AF-KLM Board meeting early in the second quarter of this year, and while no public announcement was made at that time,  one observer at an Air France-KLM press event in Amsterdam just prior to the meeting came away saying that cargo boss Erik Varwijk “as good as confirmed they’ll be out of freighters.”

Two months later, it appears that ever since the Board meeting, Air France-KLM has been quietly looking for a buyer for its all-cargo subsidiary Martinair. In early June, Dutch logistics news service Nieuwsblad Transport quoted AF-KLM boss Alexandre de Juniac as saying the company had been in talks with Abu Dhabi-based Etihad Airways about the sale of Martinair, but beyond that, Mr. de Juniac made no comment.

At this point, it appears that Air France-KLM would very much like to follow in the footsteps of its European competitor International Airlines Group, and get out of freighter operations. But whereas for IAG the process was simple, for AF-KLM it is anything but. IAG’s British Airways World Cargo subsidiary ACMI leased three 747 freighters from US-based Atlas Air Worldwide Holdings, and getting out of the business was simply a matter of terminating the leases. Air France-KLM, on the other hand, operates its own freighter fleet, mostly through subsidiary carrier Martinair. And Martinair is heavily unionized.

To get out of the main-deck freight business, Air France-KLM will likely have to find a buyer for Martinair, but under European Union law a minimum of 51% must be held by a European company. So as much as Etihad might want to have European AOC, it would be limited to a minority shareholding. Given what happened when Qatar Airways took a minority stake in heavily-unionized Cargolux, it is hard to imagine Etihad being very keen for anything other than complete control – if it is interested at all.

We will update this story as more news breaks, but in the meantime, Cargo Facts’ European editor Alex Lennane has analyzed the current situation in depth on her Loadstar site.