The Hindu Business Line : Air France, KLM to merge cargo operations by Oct

KLM Royal Dutch Airlines and Air France, which merged in May 2004, will continue to maintain separate passenger, cargo, and maintenance operations for now.

However, the two airlines have set themselves an October 2005 deadline for the merger of the commercial side of their cargo operations.

According to Mr Jan de Vegt, Chairman, Cargo Service Centre India Pvt Ltd, a subsidiary of KLM Royal Dutch Airlines, the three main operations are being maintained separately for the moment, as the laws governing these operations vary from country to country. Nonetheless, the two airlines had initiated some changes at the head office level.

"In the cargo business, we are looking at a merger of the commercial side of operations. As a result, from October, cargo space in both airlines will be sold as a total package," he said.

Air France currently operates three-freighter services each week to New Delhi. KLM, on the other hand, has discontinued its freighter services to Mumbai.

Talking about the possibility of recommencing services, he said, the airline is always looking at the scope for expansion. On the prospects for air cargo business vis-à-vis transport of cargo by sea and surface, he said the three modes of cargo transport would continue to complement each other. While sea freight is cheaper than air freight, the latter is preferred for the transport of specialised cargo and when time is of the essence.

Meanwhile, the merged entity, Air France KLM, recently announced a 20.7 per cent rise in the full-year operating profit, despite the impact of high oil prices.

According to reports, cost synergies achieved through the merger had been greater than anticipated, but operating profit was forecast to remain flat in 2006 when the impact of fuel costs would further increase.

On the challenge posed by the oil price rise, he said there is not much an airline could do about the hike apart from cutting costs on other items.

"Airlines across the world are working on improving efficiencies. While there is an attempt to recoup a fraction of the hike from customers by way of surcharges, there is a limit to this as well in a competitive environment," Mr de Vegt said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
IndiGo orders 100 Airbus jets

Safran group bullish on India

Air France, KLM to merge cargo operations by Oct

SIA Engg team to call on IA chief for talks on maintenance facility

Divergent views on Begumpet airport closure

Bharti keen on Mumbai, Delhi airports modernisation project

FICCI discusses pvt investments in ports, shipping

Jaisu Shipping bags dredging contract from Kochi port

Policy on containerised operations — Rly Ministry seeks user perspective