Swissport will acquire the remaining 50 percent of Heathrow Cargo Handling Ltd. (HCH) it does not currently own from Air France (Euronext FR: AF.FP), its joint venture partner. Swissport announced the acquisition on February 11.
The acquisition will allow Swissport to make new investments in air freight operations at Heathrow Airport where it currently operates two warehouses with 165,000 square feet of total space. The acquisition is subject to approval by the U.K.’s antitrust agency, the Competition and Markets Authority (CMA). The announcement said that CMA’s decision on the acquisition is expected in early 2019.
Swissport, based in Opfikon, Switzerland, provides airport ground services and air freight handling. It handles 4.8 million tons of air freight annually at 300 airports in 50 countries. In 2017 Swissport generated EUR 2.8 billion ($3.1 billion) in revenue. (All currency values will be represented in U.S. dollars.) Swissport works with 850 client-companies, has 66,000 employees, and is owned by the HNA Group, which is based in Hǎikǒu, China.
HCH was founded in 1995 as a joint venture between Swissport and Air France to provide air freight handling services for airlines at Heathrow Airport. It handled more than 150,000 tons of air freight in 2018, an increase of seven percent from 2017 according to Swissport.
“We are very satisfied that we can strategically round off our global cargo business with this selective acquisition,” said Luzius Wirth, Swissport executive vice president of Europe, Middle East and Africa operations. “On the basis of over 20 years of successful business, jointly with Air France, Swissport now has the right setup to further develop and enhance its service offering at London’s Heathrow Airport.”
Heathrow is currently the fourth-largest air freight hub in Europe. The airport increased its air freight volume by three percent to 1.5 million tons in 2016 according to The Journal of Commerce.
According to PRNewswire, the airport ground and air freight handling industry is expected to grow six percent year-over-year from $22.5 billion in 2017 to $32 billion in 2023. Air freight volume is expected to grow by 3.7 percent (65.9 million tons) in 2019 according to Air Cargo News.