In a press release last
week, FRAPORT, proprietor and operator of Frankfurt airport, disclosed
the sale of a 51 percent stake of its cargo handling subsidiary, Fraport
Cargo Services (FCS) to competitor Worldwide Flight Services (WFS).
FRAPORT has been searching for a potential
partner to team up with since late 2012, but until now always ruled out
selling a majority share.
While FCS is the leading handler at FRA
(and not just by tonnage and importance of customers), neither FRAPORT
nor FCS are active in cargo handling at other locations—something
the now closed deal will aim to change.
This symbiotic partnership gives WFS access
to prized FCS expertise in Cargo Handling and the prime handling facilities
at Cargo City South at FRA, and obviously both FRAPORT and FCS see the
opportunity for further synergy, and to strengthen their international
exposure.
WFS already has considerable market strength
through its locations, and its subsidiaries such as Bangkok Flight Services
(BFS) and Africa Flight Services. It is believed that it intends to finance
the expansion and updating of the handling facilities to retain and strengthen
FCS’s position at FRA.
Competitors of the new FRA Handling giant
are self handler Lufthansa Cargo (which also offers 3rd party handling),
LUG Aircargo Handling, Celebi Cargo (which just last year acquired the
handling business of the former Aviapartner Cargo), and Swissport.
The possible sale of a 49 percent minority
share of FCS to handling giant DNATA fell through in late 2013, allegedly
because FRAPORT minority shareholder Lufthansa strongly opposed giving
a Middle Eastern handler firm access to the German market.
WFS, acquired by private equity firm Platinum
Equity in May 2015, is aggressively expanding its reach. This acquisition
will enable WFS to hit the ground running in the difficult and highly
regulated German market.
Diana Schoeneich, one of FCS two managing
Directors, left FCS in March and took up a new role with competitor LUG.
A WFS representative will likely fill her position.
While the deal so far is a classic win-win
situation for both WFS and FRAPORT, eventually the success of the combined
enterprise will depend on its ability to bring their workforce aboard,
and not only retain but also strengthen service quality. A sizable number
of employees—on whose unparalleled handling expertise much of FCS
business depends—have worries that further cutbacks and saving plans
are to come.
“We’re about to have had it.
Working for Flughafen Frankfurt AG (the predecessor of FRAPORT) was a
privilege, but benefits and salaries have been cut back with the outsourcing
of cargo handling to FCS, and staff gradually replaced by subcontractors.
It’s just not the same anymore, and we’re tired of making
contributions without any incentive,” a 25-year veteran employee
told FT, on condition of anonymity.
Jens |
