Airport services in peril
Menzies joins rivals to warn of imminent collapse
25,000 jobs at risk
Four luggage and cargo handling companies have warned they will collapse within weeks without government intervention.
Edinburgh-based Menzies together with Swissport, WFS and Dnata have written to the Chancellor Rishi Sunak saying 25,000 jobs are at risk at British airports which are almost at a standstill.
In a letter they said: “We have all been able to weather previous crises, whether 9/11, Sars or the Icelandic volcanic eruption, but Covid-19 is different, as it is both global and longer-term.”
The firms provide 90% of airport handling services across the country, and without their services, “the airport infrastructure in the UK would grind to a halt for up to four months”.
Menzies has already placed 17,500 staff around the world on temporary leave and the directors and senior management have taken 20% pay cuts. Trade unions have stepped in to lend their support to calls for government help.
The four companies manage nearly all of the ground handling operations required by airlines at the UK’s airports. This includes refuelling, cleaning, baggage transfer, departure gate services and the loading and unloading of cargo.
They operate on a “pay-as-you-go” basis, charging for each service they provide.
However, airlines have few, if any passengers, as governments impose bands on travel. That has left the aviation services companies to rely on cargo operations. But even that source of revenue is beginning to decline.
Ground handlers say that they have lost 95% of their revenues since the pandemic started.
According to Swissport’s boss in Western Europe, Justin Holt, without immediate government support, the sector is “perilously close to collapse”.
If ground handlers were to go into administration, he claims, airports would simply be unable to operate.
These airports still need to operate, even with fewer flights– Henk van Klaveeren, AOA
Henk van Klaveren, spokesman for the Airport Operators Association, said: “It is a very serious issue, particularly for smaller airports where there is only one ground handling operator.
“These airports still need to operate, even with fewer flights. There’s essential cargo, flights to isolated regions and so on.”
The four companies have welcomed Chancellor Rishi Sunak’s job retention scheme, under which a government grant will help to cover the wages of employees who have to be put on furlough.
But according to Swissport executive Justin Holt, the process needs to be accelerated, so that they can get the money quickly.
The companies say they do not qualify for emergency schemes, because they do not meet the criteria. They have asked for those criteria to be relaxed.
Instead they care calling for other measures including a holiday from National Insurance payments and business rates.
The government insists that the aviation sector is important to the UK economy, and can draw on an unprecedented range of measures designed to help companies through the crisis.