CMA CGM Buys 9% stake In Air France-KLM As Part Of An Air Cargo Partnership

CMA CGM, a French shipping company, invests in Air France-KLM AFLYY as part of an air cargo partnership, counting on growing demands for flying goods worldwide while supply chains remain snarled in the aftermath of the pandemic, Reuters reported.
CMA CGM will take up to 9% of Air France-KLM, worth ~€240 million ($252 million) based on the closing price on May 17, 2022, as part of a possible capital increase by the airline group for the duration of their partnership, which is initially set to last ten years.
CMA CGM established an air cargo division last year as part of a push to develop non-maritime logistics.
Profits for ocean shipping have risen due to high freight rates since the COVID-19 epidemic, allowing CMA CGM and other shippers to invest in alternative modes of transportation to strengthen global supply chains and protect against a downturn.
Air France-KLM and CMA CGM stated that their collaboration would result in "substantial revenue synergies" and had a "strong intention to invest and grow sustainably" in the air freight industry. They will also combine their global sales forces.
The collaboration with Air France-KLM encompasses a combined fleet of ten full-freighter aircraft, four at CMA CGM Air Cargo and six at Air France-KLM. They have a total of 12 aircraft on order.
Price Action: AFLYY shares closed higher by 3.22% at $4.17 on Tuesday.
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