The term ‘transformation’ could become the word of the year in 2021. The aviation industry is on the verge of exiting the fossil fuel era and moving into sustainable flying. Airbus has announced plans to build CO2 neutral Ariane rockets and a new generation of aircraft powered by Liquid Hydrogen (LH2). And ground handler Swissport is redesigning its setup. Transformation everywhere one looks.
“We are giving ourselves a new structure in order to be even closer to our customers,” argues company speaker Stefan Hartung, explaining Swissport management's decision to reshuffle the
setup. Practically, this means that the 3 existing super entities, for instance EMEA headed until recently by Lucius Wirth, will be axed and replaced by smaller cluster regions of manageable
size. In the case of EMEA, these are: Switzerland, Germany & Austria, Continental Europe, and Middle East & Africa. Whereby it is not entirely clear where the dividing lines will run
between the two units Continental Europe and Germany & Austria, because actually both belong to the same geographical block.
The early bird gets the better worm
Company speaker Hartung provides yet another argument for the upcoming organizational transformation of the company: “It is our goal to be the first ground handler to get out of the starting blocks in the post-Covid era prior to our competitors. This requires an optimal setup in terms of organization, personnel, and business structure, in order to operate successfully and up our market share.”
Passenger ground handling services and cargo handling are the two key revenue sources of the Zurich-based company, with freight accounting for 20% of global sales. Currently, Swissport runs 269 stations, but is underrepresented in the Far East where it is active only in South Korea and Japan. In cargo, WFS is the number one ground handler globally, with Swissport ranked second.
Most recently, the company went through a lean period leading to stiff savings measures and job cuts. A decline in business activity, which became apparent in 2019 at the latest and was subsequently exacerbated by the pandemic.
The hope lies in 2022
From formerly 65,000 headcounts, only 40,000-plus are still standing on the payroll. The slump in business also applies to the freight sector since most passenger flights fell victim to the Covid virus, resulting in a lack of belly capacity and leading to a sharp decline in cargo volumes flown on board passenger aircraft. This meant less work for Swissport and its peers.
The drought will last for some time, but come summer 2022, the ground handling agent will grow again and generate cashflow, President & CEO Warwick Brady of Swissport International told the media. The transformation process resulting in new structures “enables faster decisions and supports operational excellence and a consistent service delivery,” the executive states. He goes on to say: “We want to combine great customer service with cost leadership, and provide better process flexibility and system compatibility than any competitor.”
Digitalization and sustainability stand high on the priority list
In addition to boosting day-to-day business, he has identified the rapid digitization of business processes as important areas of responsibility and the transformation of the company toward greater sustainability.
Mr. Brady reiterated an earlier statement that Swissport plans to run 50% of its vehicles on electricity by 2025, adding that climate policy will be one of the very big issues for the industry in the coming years.
Parallel to this announcement, Swissport reported the renewal and expansion of contracts with airlines serving the Japanese and South Korean markets. This accounts for Lufthansa, Cathay Pacific, FedEx Express, Korean, and Air France-KLM.
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