French shipping line CMA CGM is entering the air cargo sector with an investment in an airline group that operates flights to leisure destinations as it continues to diversify its logistics portfolio beyond ocean freight.
The fourth-largest container vessel operator by shipping capacity said Wednesday it is taking a 30% stake in privately held Groupe Dubreuil Aéro and will use its logistics expertise to develop air cargo operations for Air Caraïbes and French Bee airlines. CMA CGM will inject 50 million euros ($58 million) into Groupe Dubreuil Aéro and purchase shares in exchange for two board seats.
The deal is subject to approval by competition authorities in France, French Polynesia and Austria, as well as the French Ministry of Economy and Finances. CMA CGM expects to complete the transaction by the end of the year, a spokesman told Reuters.
Air Caraïbes operates out of Paris’ Orly Airport, serving the French Antilles islands, Havana and other locations in the Caribbean, as well as New York, San Francisco, Tahiti and Reunion Island. French Bee is a low-cost long-haul carrier, also based at Orly Airport, with several overlapping destinations plus French Polynesia.
Between them, the two airlines have 14 long-haul aircraft, including eight Airbus A350 extra widebody aircraft and six Airbus A330 planes capable of carrying 15 to 25 tons of freight.
The companies said they will create a subsidiary, Hi Line Cargo, to develop and manage cargo operations, marketing and the sale of space in the airplane holds.
Both CMA CGM and Groupe Dubreuil Aéro operate in the French overseas territories of Guadeloupe, Martinique, Guyana, Reunion and Polynesia. The companies said that common experience will enable them to offer clients services that complement CMA CGM’s ocean freight and retain all the customers’ freight business to those destinations.
Jean-Paul Dubreuil, chairman of Groupe Dubreuil Aéro, said CMA CGM’s equity partnership will help the company “look forward more confidently to the turbulent period that the air transport sector is going through by preparing for the rebound and future growth of the division.”
Since the reopening of Orly on June 26, Air Caraïbes and French Bee have focused their routes on overseas French territories where there are fewer geopolitical or health restrictions associated with the coronavirus pandemic.
CMA CGM, which is owned by the Saadé family, has 500 vessels and serves more than 420 ports around the world. Last year it transported almost 22 million standard container units and completed a multibillion deal for CEVA Logistics, which ranks among the top 15 largest logistics providers in the world.
CMA CGM sold 10 port terminals to reduce debt after the acquisition.