MIAMI – Swissport, one of the biggest Ground Handling companies, has agreed to restructure. The company serves 307 airports in 50 countries, employing more than 60,000 people. It is owned by the HNA Group, owner of Hainan Airlines (HU), and a number of other airlines.
According to aviator.aero, Swissport was founded in 1996 as Swissair Ground Services. It was continuously expanding and in 2013 bought Servisair.
The HNA Group bought the company for US$2,8m in 2015. This June, Swissport’s Belgian subsidiary filed for bankruptcy, ceasing operations in the country. A few days later. it announced that half of its UK and Ireland workforce would be laid off.
On August 21, Swissport reached an initial agreement on the restructuring. The company has now finalized the deal with creditors and investors, bringing a debt-for-equity swap and a new €500m long-term debt facility.
Additionally, Swissport has also finalized the €300m additional interim facility.
Furthermore, about €1.9bn worth of debt will be converted into equity or extinguished. Senior secured creditors, predominantly US- and UK-investors will take equity ownership.
Comments from Swissport
“Today’s binding agreements secure Swissport’s long-term future. We are pleased that a consensual deal has been reached with a majority of our creditors and our current shareholder,” says Eric Born, Group President & CEO of Swissport International AG.
“The restructuring, and the robust financial platform it brings, will enable us to confidently trade through the market recovery and positions Swissport as the first choice partner for airlines around the globe.”
On his part, Peter Waller, CFO of Swissport International AG, added, “Swissport is one of the first companies globally to agree to restructure following the outbreak of the COVID-19 pandemic. With much lower debt and €500m additional cash injected, we will be well-positioned going forward to invest in the business and accelerate growth.”
We expect to see increased outsourcing of ground handling services by airlines and being able to take volumes from some financially weaker competitors.”
The Ground Handling Market
The Ground Handling market is one of the most heavily affected by the current crisis and is especially big in Europe. There, airlines usually contract franchises such as Swissport, Menzies, Dnata, Çelebi, and Fraport.
The market is segmented on the basis of application and region. By Application, it is categorized into passenger handling, cargo handling, and aircraft handling. According to alliedmarketresearch.com, the GH industry had a phenomenal year-on-year growth of around 16% in the air passenger footfall pre-COVID-19.
Additionally, the sector was poised to become the third-largest aviation market and was set to handle passenger traffic of 421 million this year before the pandemic hit.
Featured image: Swissport.