Swissport: eyes open

posted on 12th December 2018

While the global economy and increasing demand for air travel and air freight services are certainly helping handlers to thrive, only those who are actively seeking opportunities for growth will gain the full benefit. Swissport is one such company

Swissport International provides airport ground services and air cargo handling services on behalf of more than 850 clients at over 300 airports in 50 countries across all five continents.
It had a record year in 2017, processing 250 million passengers (up 8.7% on 2016) and 4.7 million tonnes of cargo (up 8.4%) and handling a record number of flights across its network. The group’s consolidated operating revenue in 2017 totalled EUR 2.8 billion.
And Swissport is continuing on that positive trajectory: its half-year results for 2018 state that it served 132 million passengers on behalf of its airline clients (up 10% on the first half of 2017) and handled 2.3 million tons of cargo (up 5%). Total revenue for the first six months of the year rose 4.1% over the same period of 2017, to reach EUR 1.43 billion.
Nils Pries Knudsen, the handler’s chief commercial officer, says there were several factors in that success.
“We were at the top of the business cycle – and that performance has continued into 2018. There are several reasons for this. As far as long-term change goes, the airline industry has become more consolidated. There are fewer, larger players, and they are systemising or standardising their processes, and that has helped us to grow.”
On top of that: “The world economy is in good shape,” Knudsen continues. “There is a clear correlation between rising GDP and cargo growth. This is not the case on the passenger side of the business – but there are a lot of new travellers. In particular, more Chinese people are travelling now than five or 10 years ago, for instance.”

Swissport is certainly keeping busy. So far this year, it has seen its ground handling licences at Zurich Airport and at Brussels Airport extended until 2025; its cargo handling licence at Brussels has also been renewed for the same term.
It has also won new business, taking over all ground handling services (including ticketing, check-in, gate, passenger transport and baggage) for Ryanair at Berlin Schönefeld Airport on 1 April. The deal involves hiring around 150 new employees and an investment of around EUR 3 million in new ground service equipment.
Other developments relate to technology. For instance, Swissport has implemented a new departure control system (DCS) developed by Amadeus Altea at 30 airports in its network, replacing its existing departure control system axsControl DCS (which DXC ceased to offer in March). At the same time, Swissport chose SITA as the provider for telex messaging.
“This helps us to standardise the same solutions at as many locations as possible,” Knudsen points out – a major advantage for a company as large as Swissport. “It’s expensive, but good for the business in the long run. We will roll this out as much as possible in due course.”
In a further technological development, Swissport signed letters of intent with two start-up companies to explore the potential of blockchain technology in May.
With Winding Tree, a blockchain-based travel distribution platform, the handler aims to jointly explore the potential of distributing Swissport’s existing travel services and new offers, initially for independent travellers but moving to include corporate clients in the future.
With Olam, meanwhile, Swissport will start a pilot phase to explore how blockchain could be used for tracking and documentation of air cargo, ultimately improving transparency and efficiency. Olam is a non-profit foundation dedicated to developing an open-source platform for supply chain partners.
Also on the cargo side of the business, Swissport Basel was certified for pharma logistics by IATA (the International Air Transport Association) in May under the CEIV Pharma initiative.
In September, Swissport added another air cargo hub to its network of facilities in Germany through the acquisition of Stuttgart-based cargo handler Apron.
The company is also planning a large-scale expansion of its cargo infrastructure at Frankfurt airport, too, having signed a long-term lease agreement for a new facility at CargoCity South in April. The new custom-built air cargo warehouse will have a surface of around 16,000m2; construction is set to begin in 2019 with completion slated for the third quarter of 2020.

On the lookout
“We are always looking for opportunities,” Knudsen says. This might mean strengthening its position in mature markets, or growing in emerging markets. In the Middle East, for instance, the handler is already active in Oman and Saudi Arabia (“where we’re fairly new”) and is seeking to enter surrounding markets as they become more liberalised – always assuming, of course, that the conditions are suitable for establishing a sustainable operation.
Interest from Central Asia is also of note, typically from airports that are currently home to only one handler, Knudsen adds.
Earlier this year, Swissport successfully concluded its acquisition of Aerocare (and its subsidiaries Skycare, Carbridge and EasyCart), the leading aviation services and airport infrastructure services provider in Australia and New Zealand.
The integration of Aerocare into the Swissport brand is in full swing and the conversion of all locations, as well as all Aerocare ground service equipment, should be completed by the end of 2018.
Knudsen considers: “The acquisition of Aerocare has opened up a new market for us, which is interesting. Aerocare specialises in LCC ramp handling and that expertise will benefit Swissport elsewhere in the network. Also, Aerocare will gain access to the extra capabilities Swissport offers.”
The Aerocare purchase is also expected to serve as a platform for Swissport’s expansion in the Asia Pacific region.
In September, the handler announced that Air New Zealand had selected it to provide ground handling services at four Australian airports. The contract in Melbourne and Sydney starts in November, while operations in Brisbane and Perth will begin in February and March next year, respectively. |