Saving airlines is not enough, says Swissport CEO
With the aviation going through one of its deepest troughs in the wake of the Covid-19 pandemic, ground handling companies have been reeling under severe pressure.
The four main ground handling companies at UK airports have earlier warned of the imminent collapse of the aviation sector and the loss of thousands of jobs. Swissport, dnata, WFS and Menzies provide 90 percent of airport handling in the UK, but in a joint letter, the businesses warned they are unlikely to continue their operations during the pandemic, if they do not receive government support.
End of last month, Edinburgh-based aviation services firm John Menzies announced that it has cut more than 17,500 jobs worldwide as it struggles to deal with the major slump in air travel caused by the coronavirus outbreak.
Chief executive Giles Wilson said, "John Menzies plc has existed since 1833 and been listed since 1962 but never have we faced such difficult and unpredictable times.”
Wilson added that the industry has been one of the most affected by the pandemic and while the company is looking after the needs of its employees, it is doing everything possible to reduce costs.
Calling out for government support for the industry, Eric Born, CEO of Swissport International, in an op-ed article for a German newspaper, shared the current situation of Swissport and the impact of the Covid-19 crisis on the sector.
The European Commission last week had called on member countries to provide more support to all players in the air freight industry. In its recommendations to politicians, the Federal Association of German Industry (BDI) also points out that the "unrestricted functionality of all system partners" must be ensured.
However, Born points out that there have been no discussions between the federal government and the aviation industry, although airlines and airports are heavily dependent on their work. “Many services have been outsourced to us. We reliably perceive them. However, we do not have the certainty that the support for the airlines will also spread to us. This may be undesired, but it is always dangerous,” he pointed out.
The supply of goods from the air is essential for the functioning of the global supply chains, also with a view to coping with the corona crisis. A third of the value-based goods traffic is transported by air, including time-critical medicines, components and raw materials for industry. “Experiments are particularly risky for the export-oriented German economy. The last thing Germany needs after the corona crisis is unstable air traffic,” he said.
Born spoke of how ground handlers are an indispensable part of the air freight business and how each function accounts for the smooth functioning of the entire supply chain. “In our air freight centers, they handle the loading and unloading of aircraft and ensure the handling of important goods, including in the medical field. Our employees refuel every second aircraft that takes off in Germany. Without them, the sky over Germany remains empty. Ground transport service providers usually perform these tasks below the perception limit, on the ground or literally under the radar.”
With personnel costs, which accounts for 70 percent of the company’s expenses, and the fixed costs for warehouses, vehicles and equipment continue to run, Born confesses that the earnings dry up virtually overnight. Hence, they are forced to lay off staff. “We are forced to react quickly on the personnel side to ensure the continued existence of the company. There is no alternative. At the end of April, almost 40,000 of the former 65,000 employees worldwide would have left active service; some on leave or on short-time work, fired many thousands,” he said.
Born urged the need for “courageous” political support to shore up the sector. “When borders open again, travel restrictions are lifted, business people commute again and vacationers book their dream trips, our employees have to be 100 percent ready. To ensure this, we now need courageous political support. "We" are the ground handlers at small and large, regional and international airports throughout the Federal Republic,” he said.