(Article published on Tuesday January 16, 2023 at 08512 and updated at 10:45 am). Owner of Air France-KLM and CMA CGM ( Gallery) announced that they were discontinuing their partnership “The restrictive regulatory environment in certain important markets (which) does not allow cooperation to function optimally”. Please note, however: the capital alliance established in spring 2022 in parallel with the development of this commercial partnership, however, is not called into question.
Scheduled for the last ten years, this exclusive strategic commercial agreement will not last long. The intention was to put “generally their complementary cargo network, their all-cargo aircraft capabilities and their dedicated services”They explained during its launch.
“Air France-KLM and CMA CGM have begun discussions on new terms and conditions of commercial relations in which each group will operate independently from March 31, 2024,” mention the two groups.
Thus they will be able to pursue cooperation, but without commensurate with the level of integration and dimension planned by their previous strategic alliance. Thus they will once again become commercial players like no other, able to become partners or competitors depending on different markets.
American failure
This premature end is mainly due to difficulties in obtaining antitrust immunity from the American government for the two partners to fully exploit their partnership in the US and North America. This was especially the case Not right So that CMA CGM could integrate the transatlantic joint venture between Air France-KLM, Delta Air Lines and Virgin Atlantic into cargo (while being set up for passenger transport).
Given the importance of this joint venture, this could constitute a tipping point (the highest level of cooperation before the merger, a quarter of the capacity offered on the transatlantic before the health crisis).
The two groups’ difficulties in obtaining this immunity appear to be partly explained by the protectionism of the Biden administration, which the American president has made an integral part of. “Bidenomics”. Added to this are American-Dutch differences over limiting the number of flights at Amsterdam-Schiphol Airport. American companies strongly opposed lowering the ceiling, particularly newcomer JetBlue whose time slots were at risk. This led to him requesting a counterclaim against KLM from the US Department of Transportation (DoT).
Deteriorating market conditions across the commodity sector after two exceptional years in 2021 and 2022 have not helped to sustain this large-scale cooperation. Despite a slight improvement towards the end of 2023, the market will decline for the entire year in terms of price and volume. And restoring passenger plane hold capacity won’t help those with all-cargo planes.
CMA CGM leaves the board of Air France-KLM
CMA CGM is a 9% shareholder in Air France-KLM and the two groups are currently showing no signs of a divorce. The end of a business partnership still has consequences.
CMA CGM’s purchase of a stake in Air France-KLM was intrinsically linked to this partnership. Hence a new clause needs to be established lock-up Shares held by Marseille Logistics Group. This will now be in effect till February 28, 2025. So for the moment this capital secures the alliance, any divorce is prohibited until then, but it is still four months short of the initial planning (June 2025). Similarly, an additional clause to retain 50% shares till 2028 was cancelled.
At the same time, CMA CGM will leave the board of directors of Air France-KLM on March 31, 2024. This decision is explained by competitive reasons, it is suggested on all sides: CMA is leading CGM to become a competitor of Air again. In France-KLM Cargo, it cannot fit in its most strategic body.
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