PARIS (Reuters) -French shipping giant CMA CGM and French-Dutch carrier Air France-KLM on Tuesday said they would end their air cargo alliance due to regulatory constraints.
The cargo partnership, struck in May 2022 in parallel to a deal that saw CMA CGM become a shareholder of Air France-KLM, was part of a push by Marseille-based CMA CGM to expand its reach in logistics, supported by a boom in shipping profits linked to the COVID-19 pandemic.
“Air France-KLM and CMA CGM have begun discussions on new terms and conditions of a commercial relation to operate independently from March 31, 2024 onwards”, the companies said in a statement.
The companies on Tuesday cited the “tight regulatory environment” in some markets as the reason for ending their cooperation, without giving further details.
CMA CGM will remain a core shareholder of Air France-KLM but will leave the board of air carrier on March 31, the companies said.
A share lock-up agreement will also be modified, with the lock-up now to expire completely on Feb. 28, 2025. Previously, the lock-up was to expire initially on June 15, 2025, followed by a subsequent lock-up period on 50% of shares until June 15, 2028.
CMA CGM controls about 9% of Air France-KLM’s capital.
“Both groups remain committed to work collaboratively, to ensure cargo customers can continue to benefit from their respective networks”, said the companies’ joint statement.
The two companies had struck the deal after banking on growing demand for flying goods around the world as supply chains remain snarled in the wake of the pandemic.
(Reporting by Tassilo Hummel and Gus Trompiz;Editing by Sudip Kar-Gupta and Miral Fahmy)
