A global player: how Swissport is moving forward following its refinancing

posted on 20th November 2019 by William Hayes
A global player: how Swissport is moving forward following its refinancing

Earlier this year, Swissport looked on the verge of being sold, with Reuters reporting that “everyone in the world” was looking at what Chinese owner HNA would do with the world’s leading ground service provider.

However, following a successful debt refinancing in August, the company looks resurgent – with CEO Eric Born even suggesting “selective bolt-on acquisitions” could be on the cards.

ARGS caught up with Stefan Hartung, senior communications manager at the Swiss company, to find out what it was doing with its newfound breathing space.

“Mainly a lot of investments, to go to the ground service equipment [GSE],” said Hartung, adding that “we are also investing in training, innovation, and we had some trials going on with autonomous vehicles.

“These are smaller projects, as well as data related projects we are investing in where you might not see it right away, like with a new building or a new facility.”

Yet that is not to say new facilities are not being built, as Hartung disclosed the opening of a “brand new Swissport pharma centre in Brussels,” which he claimed would be the most modern building of its kind. This was in addition to a “brand new cargo facility” at Frankfurt Airport, which “will have ground breaking by the end of November and go live into operation mid to end next year.”

It would seem the company is operating in line with Born’s assertion that the successful refinancing “significantly increases” its cash position, enabling it to further enhance its “leading global market position through organic growth opportunities.” But what else is it spending its money on, and why?

 “A major part is the green revolution and if we look at this part it’s all about which equipment is running on the ground at Swissport – the shift goes from fossil fuels to electrically powered vehicles.

“We are already operating many of these electric vehicles, currently about two and a half to three thousand eGSE which are run through our different airport locations, and this share will definitely rise, to 50 per cent by 2025.”

Investment is not only limited to GSE though, with the company receiving plaudits for its delay prediction tool currently in use at Helsinki Airport for Finnair.

The machine-learning tool is based on an algorithm developed by Finnish information technology company Bluugo and uses a variety of factors for its predictions, including weather data, data from air traffic control and information from other airport operators.

“This data model is quite precise and this really helps us to better plan our equipment and staff in Helsinki, and then they don’t have to wait at an empty ramp or gate position.

“If a flight from Finnair flies from Helsinki to Paris and London and vice versa we already can predict when it will be back in Helsinki for the third time in a day.”

This touches on the wider point of operational efficiency for Swissport, with Hartung highlighting “operational challenges regarding to airspace management” as one of the key problems the company faces in its day-to-day work.

“We rely on the punctuality of the airlines and the airlines rely on certain conditions with airspace management. The more punctual they are, the better we can plan our staff and our ground service equipment.”

This was important, Hartung added, because as “the punctuality gets better for the airlines, so does the operational stability for us in terms of cost.”

Another problem identified by the company is one surely recognisable to all providers across the ground service industry, and that is the challenge of staff turnover.

“[This is] a topic where the whole industry is pressurised. We know these are tough jobs with regard to weather, shifts, comparatively low pay, although industry level. At the end of the day it’s a low margin business and we have high expectations from our customers, from the airlines.

“So yes, it’s a tough job, but we do the best we can do to keep that attractive, because it still is an attractive environment in the airline and aviation industry. We are a global player and we have a lot of career steps also in place.

“What do we want to do to make this even more attractive? We are always working on open communication culture, with new and strong communication platforms.

“For example, more and more of the millennials are our staff workers out there, via check in or ramp, so they have an expectation with regards to communication platforms. And of digital processes, be it rosters, shift switches etc.”

The digitisation of the industry has certainly been a slow process, as documented by CAAS magazine in its August-September 2019 issue – but what does Swissport think about digitisation as a means to drive the industry forward?

“It’s definitely a part, digital processes, but there you need all players involved. I mean we do the first steps, as I mentioned in Helsinki, but you need more players all involved in the whole passenger journey and I think this integration of players and data… [it] will go on and will be deepened in the months to come.”

Digitisation or not, Swissport looks determined to grow its business in inventive and perhaps unexpected ways, with Hartung revealing the company “just started the  construction of our first lounge… [which] will be in Perth,” further expanding its footprint down under, following the acquisition of Australasian ground handler Aerocare last year.

“We also just started our executive aviation business there in New Zealand, in Auckland and we will see more progress there I think,” said Hartung.

“When we bought Aerocare it was just a ground handling business and this was always meant to be a platform for further growth, also in other business units besides ground handling.”

Certainly the noises coming out of Swissport sound like a company on the ascendancy, despite the market downturn surrounding it (“the market is softening,” admitted Hartung). But as the savvy spokesman also said, Swissport is a global player – and it looks set to weather the storm once more.