Menzies Aviation is focusing on cargo and emerging markets as the world begins a slow return to normality in the wake of Covid-19
The increase in cargo operations Menzies Aviation is seeing all over the world could be instrumental in driving the growth of its ground handler services.
Executive vice president Middle East, Africa and Asia Charles Wyley says the ground handler has now broken the 50 station mark for cargo operations, having grown from 36 to 53 in the last year.
While the growth has meant Menzies has been able to penetrate new markets, including Pakistan and Iraq, he is also confident that the company can use the stations as a showcase for its operations, with the aim of then signing contracts to provide other complementary ground-handling services.
Wyley says: “If we can look at cargo going into the airport first and then those aircraft that come in, they need a ground-handling aspect. The aircraft needs fuelling and the aircraft needs to be serviced from the ground from a safe, secure operation.”
But he also admits the strategy of growing the number of cargo stations Menzies operates is serving the company well, particularly during the Covid-19 pandemic when most passenger aircraft have been grounded but the demand for air freight has grown heavily.
Wyley adds: “We have been increasingly focused on growing our cargo business worldwide through different avenues such as acquisition, organic growth and partnerships, so this achievement was a major milestone for us.
“Our cargo team has not only expanded the cargo network, but has grown key relationships and secured contract wins with the likes of Qatar Airways Cargo in the UK, the US, Australia and New Zealand, and United Airlines Cargo in Sydney and Melbourne while facing the unpredictability and challenges of the past 15 months.
“This milestone has highlighted the success of our strategy for cargo growth and only reaffirms its presence as part of our core long-term strategy.”
Wyley adds Menzies is also deliberately targeting emerging markets like Iraq, where operations began in April following the launch of its joint venture MASIL with Iraqi Airways, and Pakistan as it allows them to bring in best practices from around the world to the benefit of the new customer.
It also allows Menzies to develop existing relationships with cargo carriers by working together in the developing markets Wyley says, citing the example of the work being undertaken together with Qatar Airways Cargo in the new Pakistan venture, where Menzies acquired a 51 per cent stake in aviation services business Royal Airport Services.
He adds emerging markets are very much on the map for further stations, thanks to the growth rates and higher yield returns they offer.
“The potential for further growth in some of these markets based on all the analysis available to us and despite the impact of Covid-19, is high,” Wyley says.
“The Middle East, the Far East, Indonesia and Latin America have all featured in our recent business development efforts and will only become more important pieces of our global portfolio.”
And he admits that working in such markets can also provide unique challenges beyond simply understanding the governmental, political and regulatory frameworks.
For instance much of Iraq is still suffering from the ongoing impact of the US invasion and occupation of the country.
However, Wyley says none of the ongoing issues are particularly prevalent at Baghdad International Airport where Menzies has its new operations.
“This is one of the securest places within Iraq,” he says. “So you know, we brief our teams, we provide them support and also we expect the government of the country to be able to secure the airport zone to allow it to have continuous operations.”
However, he is quick to add the new business will not be at the expense of Menzies’ current operations, which are also being targeted for growth too.
Wyley says: “We still see the potential for targeted growth in our existing markets, particularly in cargo and fuels.
“For example winning the Avianca Cargo contract in Miami as the gateway to Latin America, or seeking out opportunities in Oceania to enter the fuels market there alongside our well-established and successful cargo and ground handling businesses.”
Wyley adds the emerging-market growth strategy was also in place long before Covid-19 struck, although he admits the success of the plan is expected to be reinforced by the pandemic.
He says: “The recovery rate is forecast to be considerably stronger and there is potential for Menzies to enhance standards and processes for customers. Expanding our network into these markets with strong growth dynamics will be a key part of our growth, utilising all of our product categories.
“Within the ground handling market, we will target high volume, high value contracts in key locations making better use of resources and enabling increased customer service and engagement. Where market dynamics are favourable, we will also seek to selectively expand our ancillary product portfolio.”
Of course, with vaccination programmes rolling out across the world we can all be grateful that the world is emerging from Covid-19. In which case, it will be interesting to see if Menzies’ focus on emerging markets for cargo and other services pays of as well as hoped.