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Swissport to acquire Australian ground handler Aerocare

written by WOFA | November 23, 2017

The baggage system at Sydney Airport. (Sydney Airport)
A file image of the baggage system at Sydney Airport. (Sydney Airport)

Global airport services company Swissport is setting its sights on Australia through the acquisition of local operator Aerocare.

The Zurich-headquartered Swissport, which is part of China’s HNA Group, said on Wednesday it had purchased the privately-held Aerocare, as well as subsidiaries Skycare, Carbridge and EasyCart, from its current owners including Australian private equity firm Archer Capital.

Swissport said in a statement Aerocare would be “recapitalised and positioned for continued strong future growth”, with the deal struck after more than a year of discussions and due diligence.

Further, Aerocare would allow Swissport to expand its international footprint into the Australasian market, where international competitors such as the Emirates Group-owned dnata and United Kingdom-headquartered Menzies are already present.

“It delivers a key platform for the company to strategically expand its reach into the fast-growing Asia-Pacific market, complementing a specific focus on entry into China, and to achieve further global growth,” the company said in a statement.

“It brings to Swissport a comprehensive blue-chip customer base that has experienced impressive growth in recent years.”

Swissport said Aerocare’s headquarters would remain in Australia and its management team, led by chief executive Glenn Rutherford, would continue to lead the business.

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Rutherford said Aerocare, now in its 25th year, currently had about 3,000 staff that serviced 160,000 flights and 15 million passengers a year at 36 airports around Australia and New Zealand.

“Today’s announcement means that Aerocare will be able to improve and expand our services further by accessing Swissport’s expertise and operating practices, providing us with a springboard for further growth,” Rutherford said in a statement.

“Aerocare employees will also have significantly expanded career opportunities, as we now come under the umbrella of the largest ground handler in the world, operating across almost 50 countries.”

Swissport president and chief executive Eric Born described Aerocare as the “market leader in a region where we anticipate continued growth in the coming years”.

“It perfectly complements our strategic priorities for growth and operational excellence, and we are delighted to have the Aerocare team joining Swissport,” Born said.

“Together we will become part of a larger global organization that will open the door to new opportunities for further growth and development.”

Swissport said it had secured all necessary Foreign Investment Review Board (FIRB) approvals for the transaction.

Its parent HNA Group holds 19.17 per cent of Virgin Australia shares, according to the carrier’s 2017 annual report, and has a seat on the airline’s board.

HNA Group chief executive Adam Tan said it was an “exciting and highly strategic acquisition for Swissport”.

“Today’s announcement demonstrates our continued commitment to our international investments and to helping our portfolio companies grow and prosper,” Tan said.

The terms of the deal were not disclosed. It was expected to close “in the coming weeks”.

Aerocare was the subject of two reports on ABC Television’s 7.30 in early 2016 that claimed poor working conditions at the company were a potential safety and security risk.

However, Aerocare said in a statement in early November a Civil Aviation Safety Authority (CASA) surveillance report conducted between June and August 2017 had cleared the company of any safety and security breaches.

“Based on the activities observed and the records sampled relating to operations during the surveillance period, the original complaints and accusations on fatigue management, safety reporting, use of untrained personnel, and document altering were unable to be substantiated in any systematic manner,” the CASA report said, according to a statement on the Aerocare website.

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