TNT Airways to reduce long-haul capacity by 50%

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Express freight carrier TNT will reduce its intercontinental aircraft capacity by 50% this year as it moves to stem losses at the business.

The operator, through subsidiary TNT Airways, has a long-haul fleet comprising two owned Boeing 747-400 Freighters and three 777-200LRFs on lease from Guggenheim Aviation, of which two are presently in operation.

The company has yet to decide on how to cut capacity, said chief financial officer Bernard Bot, but it is examining a number of measures including divestment, sub-leasing and codesharing. The two 747s are up for sale, due to their relatively high fuel burn. However, the company was forced into booking a €39 million ($51.6 million) impairment charge against their declining value in its 2011 accounts, said Bot, "given market conditions".

Chief executive Marie-Christine Lombard said TNT will shortly announce a codeshare agreement with an as-yet unidentified airline for its 777 fleet. "It is a very strong operator and it will complement our operation very much. We will share the risk and capacity to counter the fluctuations in volumes we have seen."

TNT's consignments will still be handled through its Liege, Belgium hub, she added.

Agreements with "preferred suppliers" will be signed to further bolster its non-owned airlift capacity, Lombard said.

TNT's European air network will be "optimised" in the near term, with fewer aircraft on each route and increased sectors on the routes. Over the longer term it will move to a network of seven regional hubs.

TNT made a pre-tax loss of €172 million for the year to 31 December, on turnover of €7.2 billion.

The company last week announced it is the subject of a hostile takeover bid from us rival UPS.