The cargo business is the second of the Group’s activities, generating €2.8 billion euros of revenues (11% of total revenues.)
In 2013, global air freight trafﬁc (in revenue ton-kilometers) grew by a modest 1.4% after two consecutive years in decline (-0.6% in 2011 and -1.9% in 2012).
The Asia-Paciﬁc airlines, which represent nearly 40% of the world market, recorded a 1.0% fall in cargo trafﬁc volumes, a slower drop-off than in 2012 when trafﬁc declined by 6.2% for a 2.9% reduction in capacity. The European carriers posted cargo volume growth of 1.8% whereas, in 2012, trafﬁc had contracted by 3.1%. The North American airlines saw air freight volumes decline by 0.4%, following a 1.4% fall in 2012. The Middle Eastern carriers continued their strong growth, with a 12.8% increase in trafﬁc. The Latin American airlines saw their air freight volumes grow by 2.4% in 2013 but decline by 5.0% in December. The African carriers posted a 1 % rise in air freight volumes for 2013 as a whole after a 6% increase in 2012.
Air France-KLM Cargo remains a major player in air freight
Air France-KLM Cargo remains a major European and world-wide player with a market share of 8.1% in 2013, down by 0.2 points relative to 2012. This trend in market share reﬂects the Group’s commitment to prioritizing an improvement in unit revenues and refocusing on the fastest-growing markets. During the ﬁnancial year, the Group transported more than 10 billion revenue ton-kilometers of which 69% in the bellies of passenger aircraft and 31% in the dedicated cargo ﬂeet, to a network of 251 destinations in 116 countries.
Backed by its two powerful European hubs, Paris-CDG and Amsterdam-Schiphol, Air France-KLM Cargo is well placed to offer its customers the beneﬁt of access to major infrastructure in the European markets. Paris-CDG is the number two European air cargo hub while Amsterdam-Schiphol ranks number three.
New "belly-dominant" business model and Transform 2015
In 2010, confronted with the crisis in the sector, the Group adopted a new “priority to bellies and combis” strategy aimed at optimizing the economics of “passenger” aircraft bellies. The full freighter ﬂeet is used as a complement to cover the routes not served with passenger ﬂights, products that cannot be carried in the hold and markets in which belly capacity is not adapted to demand. In the prevailing very difﬁcult context in 2012 and 2013, this positioning was reinforced by new measures launched within the framework of Transform 2015.
For the past three years, Air France-KLM Cargo has thus been implementing an extensive transformation and adaptation program focused on revenues, outstation costs, hub productivity, quality, optimized payload on bellies and combis and headcount reduction.
In 2013, thanks to all these economic and commercial measures, the business managed to reduce its losses despite the marked deterioration in unit revenues (down by 4.2% on a constant currency basis). The turnaround in results being however insufficient, the Group launched in October 2013 a number of additional measures.
These additional measures notably foresee the reduction in the full freighter fleet to ten aircraft (two at Paris-CDG and eight at Amsterdam-Schiphol) by 2015, i.e. a further reduction of some 32% in full freighter capacity between 2012 and 2015. The Orly cargo hangar will be sub-contracted while headcount will be adapted thanks, notably, to a voluntary departure plan targeting 280 Full Time Equivalent positions in the sector in addition to the voluntary departures looked for in the other businesses.