While geopolitical turbulence has caused its share of demand challenges during the first half, ground service providers continue to be upbeat on growth opportunities
The ground services sector has so far this year seen its fair share of instability due to global events. But stakeholders remain optimistic after positive Q1 and Q2 growth – despite the challenges they face.
At the beginning of this year, dnata Chief Executive Steve Allen said the “big question” for 2025 would be about how far geopolitics would impact trade flows. In August, he told Airline Routes & Ground Services in an exclusive interview that business has “continued as expected” despite the impact of the US tariffs and ongoing military conflict in the Middle East on the sector.
“What we’ve seen, particularly in relation to tariffs, is a noticeable shift in trade flows,” said Allen. “There’s no doubt that trade to and from the US was impacted in the first few months of the year, especially in the e-commerce sector, due to ongoing uncertainty.
“At the same time, we saw sudden spikes in activity as businesses moved quickly to beat trade deadlines. For example, in April, there was a significant surge when President Trump extended the tariff deadlines to July.”
Allen continued: “That extension created a window of opportunity, prompting a wave of shipments aimed at avoiding the tariffs. We also saw changes in trade patterns, particularly from China, with increased volumes into Canada, the Pacific region and the UK – well above our expectations.”
While markets in Europe and the Middle East remained relatively flat, the chief executive noted that fluctuations are to be expected.
He said: “It’s swings and roundabouts as businesses navigate the challenges posed by tariffs. In the Middle East, the most notable disruption occurred in June, driven by geopolitical developments. The situation unfolded swiftly and decisively, leading to a temporary pause in certain operations.”
Dubai experienced a short-term dip in flight volumes amid military escalations between Israel and Iran. Neighbouring countries in the region were also affected. But Allen said that this disruption lasted only a few days before operations returned to normal. He added that dnata experienced a notable surge in activity in the days that followed, helping to recover earlier losses.
Allen said: “In markets such as Jordan and Erbil, Iraq, we saw operations not only return to normal but surpass pre-disruption levels. This strong rebound reflects renewed confidence in the region and the strength of our operational capabilities. Looking back over the past six months, while there have been fluctuations due to geopolitical factors, the overall trend has remained in line with our expectations.”
Organic opportunities
Allen emphasised that dnata is continuing to focus on organic growth. He said: “We’ve seen strong performance in Australia, the UK and Italy. Even in the US, our ground handling operations have grown significantly, and we continue to win new customers.”
Earlier this year dnata acquired full ownership of Airport Handling in which it previously held a 70% stake. Then in February the subsidiary launched operations at Rome Fiumicino Airport, which the chief executive said was “executed exceptionally well”.
The company has also secured a seven-year contract at Zurich Airport in Switzerland and unveiled its ‘Station of Tomorrow’ concept at Orlando International Airport in the USA. Elsewhere, dnata has its eyes set firmly on the so-called emerging markets – with particular focus on South America and the Asia-Pacific region.
Allen said: “We see Asia-Pacific as one of the most promising growth regions. We already operate in the Philippines and Singapore, and we’re actively exploring opportunities in other parts of the Far East.
“The challenge is that many of these markets are dominated by local airport authorities or businesses, rather than large multi-national organisations. We recently signed a catering partnership in Denpasar, Bali, which we view as a strategic entry point.
“The arrangement involves a management contract with a local company, and the response has been overwhelmingly positive. Several carriers have already approached us, which clearly reflects the strong demand for high-quality ground handling and catering services.”
The chief executive hinted at more news to come from dnata in the Asia-Pacific region this year. Elsewhere, in South America, Allen said the company is seeing continued growth in Brazil where it operates at 30 stations.
“We’ve been working closely with the authorities to improve aviation infrastructure and address tax structures that have historically made investment challenging,” he noted. “Beyond Brazil, we’re seeing momentum across South America. It’s a dynamic and fast-growing aviation market, and we’re keen to be part of that growth.”
Allen revealed that dnata is currently eyeing up acquisition opportunities in South America, as well as in the Asia-Pacific region, adding that the group expects to make announcements on these later this year.
Swissport is another major ground handling player that has witnessed a positive year so far. According to Guillaume Halleux, Swissport’s Chief Commercial Officer, the company is on track to deliver what Chief Executive Warwick Brady said in January is a “very ambitious vision” to increase the number of countries, stations and warehouses in its global network this year.
“The first example I’ll give you is our ground handling operations in Frankfurt which started on 1 February,” Halleux explained, speaking to ARGS in August. “It is among the busiest airports in Europe and Lufthansa’s home base, pretty much every airline flies to Frankfurt. We’re very proud of this accomplishment. We started with a very strong performance.”
Frankfurt start
Halleux added that despite some initial local challenges in the first six months at Frankfurt, Swissport has served more than 6,500 flights, over 1.4 million passengers and delivered around 1.2 million bags. “Frankfurt is on its way to becoming one of our top stations in the coming months following the ramp up,” he said.
And at the beginning of September it was announced that Swissport is partnering with Korean Air at New York John F. Kennedy Airport to deliver air cargo services. “Those are the two biggest examples I can give you,” noted Halleux.
“There are many smaller ones in our network, but in that respect, the first half of the year has been doing quite well. From a business-as-usual perspective, Q1 and Q2 have been quite strong equally. We are on track to deliver our 2026 forecast in terms of volume of business and net business growth.”
However, Swissport has – like the wider sector – faced challenges this year. According to Halleux, the tariffs introduced by the Trump administration earlier this year have resulted in a decline in certain passenger routes in terms of traffic. But he maintained that this has not had a significant impact on the group’s ground handling business.
On the cargo side, Halleux explained: “Although there’s been significant volatility in terms of volumes, they have gone up by [around] 5% compared to last year in our network as we have managed to compensate for the effect of the tariffs thanks to our diversified network. There has been a redirection of the Chinese traffic into Europe so some real upside in some of our European stations such as Liège, Amsterdam, Brussels, Frankfurt and the UK.
“In a nutshell, we see less e-commerce flows into the USA, but a lot more flows into Europe, Brazil and into Latin America in general. So, if I compute both components equally, the net effect is balanced.
“That market driver led to another one, which is uncertainty, and no business likes an uncertain environment. As a result, we see our airline customers facing challenges to make commitments in the long term. We have been working hard to continue to grow, and we keep growing thanks to our incredible people, our operational excellence and the strength of our brand.”
On the group’s expansion plans for the year, Halleux revealed that Swissport’s M&A strategy “continues to be strong”, adding that “we do have a significant pipeline. Unlike others, we don’t acquire companies for the sake of growing in absolute numbers.
“Our acquisitions and our M&A activities serve a strategic purpose of business line, diversification, or geographical diversification and strategic positioning. That means that we are very picky in our M&A targets because we want them to serve our overall strategy focused on enhancing our platform in markets where we can optimise growth, margin and resilience across the portfolio.”
Elsewhere, in Europe, “recovery is back”. That’s according to Casper Dons, Head of Commercial at Aviator Airport Alliance, a Scandinavia-based ground handling subsidiary of Avia Solutions Group.
Dons told ARGS: “For sure people want to travel again and business is growing. That said, I would say in our region, in Scandinavia, you still have markets in Sweden where domestic [traffic] is still completely gone and will most likely never recover – so it’s not the same as before Covid.
“Helsinki is affected by the war in Ukraine… so business is back and it’s great. But we still have stations where we are affected and where it’s not back fully to normal.”
New partnerships
Dons said Aviator secured a lot of new contracts and partnerships last year following SAS Ground Handling divestments as part of concessions related to the European Commission granting of €1.3 billion (US$1.5 billion) in restructuring aid for Scandinavian Airlines. And this growth has continued, according to Dons.
“Initially in 2025 we had to stabilise as well to have a good start up of those cooperations with current partners but also some new ones in 2024 which is key to us,” he said.
“We have a strong foundation and it’s important for us to keep that foundation and renew with our important partners – but we also see some growth opportunities.”
Dons emphasised that Aviator’s expansion strategy is to consolidate in existing markets and locations as well as grow to new stations.
“Retaining and keeping a foothold is key but expansion is key as well, so we just need to find the right way of expanding,” he said. “The name Aviator is really consolidated in our region and airlines know us in Europe at least.
“But when we are talking to airports in the rest of Europe, we are not a known ground handler. That is one challenge that we are working on – we are trying to actively expand our network with airport owners so they understand who we are and that we are a well consolidated ground handling company with a lot of stations, a lot of employees and a lot of partners who are really happy with what we do.”
Dons continued: “We were part of the massive tender in Spain and were not successful.
“I would say tenders are tricky [because] we are up against some really big ground handling companies who have massive resources and they have presence. This is why we also need to look into alternative ways of potentially partnering with airlines or acquisitions.”
But it’s about expanding in a “smart way”, he added.
Dons revealed that one airport of interest is Oslo in Norway – where Aviator does not currently operate. He said the airport is a “really interesting station” but that “it’s a tricky one” also.
“It’s not easy to do profitable business in Oslo but it’s a close to home market and place where I want to us to grow to,” he said.
