C2FO Helps Air France Take Flight with Working Capital Optimisation

During challenging economic times, it’s common for corporates to take steps to hold on to more cash by paying their suppliers later. This approach, however, can put suppliers at greater risk of going out of business, thereby weakening the supply chain.

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Like any company, Air France is concerned about protecting its cash position during difficult times. But the French airline also understood that its suppliers needed liquidity during a pandemic and economic crisis that have taken a major toll on the air travel industry.

The solution was providing suppliers access to early payment on their invoices through C2FO. 

In this December interview on French business channel B Smart, Bruno Lecerf, SVP of corporate finance and treasury for Air France, and Antoine Trépant, French managing director of C2FO, discuss how their companies collaborated to provide quick, low-cost capital to the airline’s suppliers. 

Helping the ecosystem

Bruno Lecerf noted that, for the past several months, Air France has faced a situation of negative interest rates while at the same time having “a relatively generous cash position.” Early payment through C2FO enabled Air France to generate move value from that cash, while also injecting low-cost working capital into its supply chain.  

“In this crisis situation we’re all familiar with, it’s true that we too naturally tend, at certain times, to take particular care and we’re continually trying to limit our cash outflows,” he said. “Nevertheless there is also this interest, and it’s still important to recognise that we’re not alone and that we have this ecosystem of suppliers around us who we have to rely on, and we have to contribute to keeping them strong.” 

A flexible approach for suppliers 

Unlike traditional supply chain finance, early payment through C2FO is dynamic and flexible, enabling suppliers to accelerate invoices of their choice at discounts that they determine. The programme also provides buyers like Air France the option of utilising third-party funders to pay suppliers, rather than spending cash from the airline’s balance sheet. 

“We’ve really flipped the model on its head,” C2FO’s Antoine Trépant said. “Instead of a buyer incentive model, this is a supplier incentive model.”

The opportunity to help Air France’s suppliers was key to launching the programme, according to Bruno Lecerf. 

“That was actually the catalyst for us, in the context of an approach which at the start could have been a bit selfish, solely focused on the treasury function, and which in the end has become much more altruistic, focusing on all of our partners,” he said. 

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