Air France-KLM Cutting Freighter Capacity 40 Percent

Air France-KLM,Europe's largest air freight airline, will cut cargo capacity 40 percent this winter compared to last year after watching a slump in demand this year extend into September. 

Although the rate of decline has slowed in the past four months, cargo traffic for Air France-KLM fell 17.2 percent in September from a year ago.

Capacity cuts outpaced the decline in traffic in September to improve the load factor by 2.2 percentage points to 66.1 percent even as the carrier’s revenue shrunk 5.5 percent.

Traffic on the Americas network fell 10.4 percent with a 10.9 percent reduction in capacity while Asia/Pacific volume contracted 24.4 percent as the carrier slashed freight space on the network by 33.4 percent.

Passenger numbers were down 5.3 percent in September but the load factor was 1.1 percentage points higher at 81.9 percent.

Air France-KLM, including its Amsterdam-based all-cargo and charter airline Martinair, will be marketing 20 percent less freight capacity than a year ago in the winter season beginning Oct. 25 to match the slide in demand.

It also plans to operate around 40 percent less full freighter capacity through the winter compared with a year ago. Among the cuts, KLM Cargo will end a twice-weekly Amsterdam-Shanghai service. The Chinese hub will be served by a four times-a-week Air France Cargo 777 freighter service from Paris.

Air France-KLM is said to be seeking a 20-30 percent increase in freight rates in the winter season, matching similar planned hikes by close rival Lufthansa Cargo, in a bid to boost revenue and return its freight unit to profit. Cargo revenue tumbled to $772 million, down 41.5 percent from a year ago in the quarter to June 30, resulting in a $280 million loss against a $23 million profit in the same period in 2008.

British Airways reported September freight traffic was down 2.6 percent from a year ago while the load factor improved by 2.4 percentage points to 78.9 percent. Revenue dropped 1.1 percent on a 4.3 percent cut in capacity.

Contact Bruce Barnard at brucebarnard47@hotmail.com.