Ground-handling firm, hit by over $50m losses, exiting because of dismal state of airline sector
By
Karamjit Kaur, Aviation Correspondent
SWISSPORT Singapore will pull out of Changi Airport at the end of March after chalking up losses of more than $50 million since it started here in 2005.
The Swiss-based ground-handling company, which offers passenger check-in, and baggage and cargo services, employs about 300 people here.
It also serves a handful of carriers, including Tiger Airways.
Swissport, which operates in 179 airports in 41 countries, cited poor economic conditions and tough competition at Changi as reasons for its pullout.
The company said in a statement that it 'deeply regrets this development' but has 'reluctantly decided to cease' operations at Changi given the present dismal state of the airline sector.
The company will do 'its utmost over the next few weeks to ensure the smoothest of transitions for its customer airlines and fair severance arrangements for its own personnel', said the statement.
The Civil Aviation Authority of Singapore (Caas) said it will work with Swissport and NTUC 'to find placement options for their staff, and we will facilitate these discussions'.
A spokesman for Tiger Airways - one of Swissport's biggest clients at Changi - said: 'We have had a good working relationship with Swissport. Tiger will be evaluating its options and we will make an announcement in due course.'
Mr Clement Woon, president and chief executive officer of Changi's biggest ground-handling company, Singapore Airport Terminal Services (Sats), said: 'We are certainly open to the opportunity of serving Swissport's customers and have been in preliminary discussions with Swissport.'
The Straits Times reported last month that Swissport, which was planning to go, was in discussions with Sats for the Singapore Airlines subsidiary to take over some of its assets.
Swissport's departure means Changi will return to having just two ground-handling companies - Sats and Changi International Airport Services (CIAS).
When the government issued a licence to Swissport in June 2004, the intention was to inject more competition and lower fees for airlines, and so enhance Changi's position as the region's aviation hub.
But tough economic conditions, especially in the cargo sector, have hit the company hard.
In November, for example, cargo volumes at Changi Airport fell 14 per cent compared with the same month last year.
The director general and chief executive of Caas, Mr Kim Choon, acknowledged Swissport's contributions by noting that since it came here, ground-handling rates at Changi have fallen by about 15 per cent.
'Swissport's entry into the ground handling market at Changi Airport in 2005 has clearly benefited airlines operating here,' added Mr Lim.
Caas is open to issuing the third ground-handling licence to a new market entrant, the authority said.
