Air France-KLM – is Anyone Selling CargoSpace?

One might be tempted to think not, considering the latest figures released on the Air France-KLM cargo load factors. March freight traffic fell by almost 9% while capacity on offer by both carriers only went down (so far) by 1%. The average load factor fell a further 5.3% down to 62.4%.

What‘s going on in the cargo sales organization of the Franco-Dutch carrier?

The management of both carriers are not commenting on the March and first quarter results.
It’s somewhat unclear as to whether the drastic fall in March revenues is due to the lack of sales activities or whether it can be wholly or partially attributed to declining fuel surcharge revenues.
Some industry experts are assuming that the shipping world is losing confidence in the AF/KL freight product and that cargo is being shifted big time across to other carriers.
The recent confirmation that the management will not reconsider its decision to scale down the freighter fleet has caused more internal unrest as well as questions from the shipping world as to whether Air France-KLM will remain as an attractive cargo carrier in the future.

New cargo management is one month on seat
Bram Graeber who took over as interim head of the AF-KL freight division almost a month ago is seen as being a person who does not look back at the past and is more of a builder than a reformer.
He admits in a recent interview with the Dutch trade paper, Nieuwsblad Transport, that there are times when management must push through decisions which are not to the liking of many within the company.
He refers here of course to the scaling down of the freighter fleet especially that of the daughter company, Martinair Cargo.
He also admits that he does not see any hope of an alternative plan and that the rundown to a total of three freighters plus one reserve aircraft, is a done deal.

Not much KLM enthusiasm
Despite the above, there is still considerable opposition from the Dutch Shippers Council, EVO.
The Dutch Aviation State Secretary, Wilma Mansfield has again stepped into the argument by suggesting that due to the decrease in KLM cargo capacity, that there should be more foreign freighter flights allowed to operate through Amsterdam Schiphol airport.
This suggestion is not being met with much enthusiasm by KLM managers.
Reference is made to the recent study by Seabury on behalf of KLM, whereby even with decreased national carrier capacity, that there is enough belly hold space on carriers operating (including KLM) through AMS to take up the slack.
One wonders how Seabury put their figures together and where they get them from and as to whether they have “got hold of the wrong end of the stick.”

Surely it has to do with the national carrier share of the freight market.
This, despite the fact that there are said to be more than 20 different foreign cargo airlines operating out of Schiphol.
If the above is the case, then indeed KLM does not have to worry too much about selling space and can even scale down their sales force accordingly and leave the field open for the others.
And - again the question arises as to KLM’s cargo capacity once its 15 B747-400 Combis are taken step by step out of the market.
Any forward thinking there?

But - back to the March figures.
Some are openly stating that the low load factors, decline in revenue and capacity on offer, is not caused by a lack of cargo on the market, but moreso by KLM’s internal sales lethargy and the shipping world’s lack of confidence.

The alarm bells should be ringing even louder now on the top floor.

John Mc Donagh

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