Impact of COVID-19 on European airport ground and cargo handling
The Interview started with an overview of how ground and cargo handling volumes in Europe have changed because of the pandemic. Ground handling volumes are down 90% year-on-year, while cargo numbers are “probably quite stable… if not a bit busier”, the expert said.
Revenue expectations for 2020 were also covered, keeping in mind that volumes typically fluctuate between Q1 and Q4, and noting which periods are usually the most profitable for Swissport.
The Interview also explored whether the company could increase pricing through its contracts, with the specialist expecting the company and its peers to introduce measures such as surcharges or “a completely different price and a new contract”.
The topic of airline partnerships over the next 6-12 months also came up. Acknowledging that “it’s a relationship that’s very much needed”, the expert explained why he anticipates changes to the ways that contracts are put together. “A lot of work has been done over the last few years in making sure that there is protection for things like the volume… but I think it will go a different way.”
How Swissport might be able to access further liquidity in these challenging times was another area of focus. “There is, I suppose, a possibility of carving out some of their businesses,” the expert said. Swissport has a profitable lounge business that forms part of its overall UK business. However, that too “will be suffering in a big way at the moment as well”.
Other discussion points included the impact of COVID-19 on unit costs, Swissport’s exposure to challenged airlines, and short- and long-term CAPEX implications.
To access all the human insights from Third Bridge Forum’s Swissport – European Ground & Cargo Handling – Coronavirus Impact Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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