Swissport Gains Bigger Slice of Ground Handling With Servisair

Swissport International AG, which agreed to buy aviation ground-handling company Servisair yesterday, said airlines should concentrate on their cabin activities in order to lower costs and support consolidation.

“Many airlines are still operating a lot of non-core activities rather than focusing on flying aircraft with the right fleet and the right number of passengers and the right yield,” Chief Executive Officer Per Utnegaard said today.

Airlines still control about half the ground-handling market worldwide, while fast-growing low-cost carriers often rely on partners for the service. Swissport, owned by private equity firm PAI Partners SAS, yesterday agreed to acquire Servisair from Derichebourg SA (DBG) for an enterprise value of 450 million euros ($597 million), in its biggest purchase to date.

The agreement, which adds 15,000 employees, comes five months after the company announced plans to buy the majority of the ground-handling operations of SAS Group. Those activities have about 500 million euros in sales, Utnegaard said, while Servisair had sales of 688 million euros last year.

While the Servisair deal may close in the fourth quarter, the SAS transaction will likely take until next year, Utnegaard said. The acquisitions will lift Swissport’s headcount by about 50 percent to 60,000.

Swissport’s largest rivals are the aviation unit of John Menzies Plc (MNZS) and Dnata, the ground-handling unit of Emirates, Utnegaard said. Swissport, which will have a market share of about 7 percent after acquiring Servisair, will continue to seek takeover targets, with Africa as a preferred region, he said.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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