Air France Cargo to Slash Freighter Capacity

Air France Cargo to Slash Freighter Capacity

Air France will reduce its freighter capacity by 20 percent as part of a cost-cutting and efficiency program aimed at returning to profitability.

Air France Cargo will cut its fleet of three Boeing 747-400 and two Boeing 777 freighters to four aircraft. It is likely to dispose of one of the 747s rather than the newer 777s. The cargo unit also “will step up efforts initiated three years ago to reduce costs and improve economic performance,” Air France said.

Air France Cargo will fully integrate with its Dutch partners KLM Cargo and Martinair. It said it will seek synergies in its domestic and overseas stations but did not give details.

Once Europe's leading all-cargo operator, Air France Cargo has steadily reduced its exposure to freighters by transferring them to KLM’s lower-cost subsidiary Martinair.

KLM Cargo also has slimmed to two 747-400 freighters as it also switched aircraft to Martinair, which now operates six 747-400s and seven MD-11 freighters. 

Air France-KLM’s cargo loss widened to $88.4 million in the first quarter from $11.7 million a year earlier. Lufthansa Cargo, by contrast, booked a first quarter profit of $24.7 million against $83.2 million in the same period in 2011.

Air France-KLM’s cargo revenue shrank 8.3 percent in April from a year earlier on 3.3 percent less capacity. Parent Air France plans to restructure its short- and medium-haul passenger network and trim its payroll by at least 2,400 over the next three years by not replacing staff. It also will unveil plans to lay off “excess staff” in the second half of the year.

Europe’s largest airline aims to eliminate $3.75 billion of debt and operating costs and increase productivity by 20 percent over the next three years. The carrier, which had an operating loss of $442 million last year, is targeting break-even by 2014.

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