Air France-KLM Sells Freighters to FedEx

Air France-KLM Sells Freighters to FedEx

Air France-KLM signed a letter of intent to sell two new 777 freighters to FedEx as it downsizes its all-cargo operation.

"This sale is in line with the current slump within the global air cargo industry," the Franco-Dutch carrier said.

The sale of the planes, which have yet to be delivered by Boeing, will not affect the number of flights by Air France Cargo, the airline said.

Air France didn't say how much FedEx is paying for the 777s, which have a list price of $252 million to $260 million each.

Air France Cargo currently operates five aircraft -- two 777-200 extended range freighters and three 747-400 extended range freighters. It has leased two 747-400s to Russian carrier Air Bridge and a third is due to be chartered out in March.

Air France-KLM owns Europe's largest all-cargo fleet of 29 freighters but plans to significantly reduce its exposure to the sector by transferring some aircraft to its Amsterdam-based subsidiary Martinair and selling others to rival carriers.

The airline, which has grounded 11 freighters, wants to optimize the use of belly hold space on its passenger aircraft and its combi passenger/freight planes.

Air France-KLM's cargo unit booked a $219 million loss in the second quarter ended in September against a year-earlier profit of $15 million as revenue slumped 41 percent to $851 million. The airline does not expect to break even for at least another 18 months.

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