At least two more years of freight rate pain for shippers as carriers 'cash in'
Shippers must brace themselves for at least two more years of elevated freight rates and ...
Swissport Belgium has filed for bankruptcy, but said its cargo business in Brussels and Liege won’t be affected.
Together with subsidiary Swissport Belgium Cleaning, it will prepare to end operations, it said.
Swissport said both companies had been “notoriously loss-making”, and had “for many years relied on repeated liquidity provisions from their parent”.
It added that there had been “numerous” efforts to turn around the business, but these were unsuccessful.
“The funding need for the two entities has been further exasperated by the Covid-19 crisis and the expiration of the largest airline customer contract in just a few months gives great revenue uncertainty for the future,” said Swissport.
“Despite close consultations with unions, key airline customers and Brussels Airport, local management could not present a plan to warrant additional funding by the group.”
The Swissport group’s cargo business at Brussels and Liège airports is a separate legal entity and not affected, it confirmed, noting that it “will continue to operate and provide key logistics for Belgian and European imports and exports by air”.
“After years of providing financial support to our loss-making Belgian ground handling unit, and after numerous failed attempts at turning around the business, we had to acknowledge that there were no viable options left on the table, and no positive prospects on the horizon,” said Eric Born, group president and chief executive of Swissport International.
“Our Belgian directors and their teams worked with utmost commitment to secure the survival of the business but could ultimately not underpin their turnaround plan with the required long-term customer contracts. Absent of a healthy portfolio of such contracts and absent of a competitive cost base, our ground handling business in Belgium would continue to rely on funding from the group. Unfortunately, this is no longer an option in the current market environment, which is challenging for the entire industry.”
The company said Covid-19 had forced it to “adopt a stricter practice regarding the funding of any loss-making subsidiaries, as to safeguard the group’s financial health”. Swissport’s revenue has collapsed by 80%.
It said it was looking to raise additional liquidity.
“Swissport is exploring all avenues to strengthen its liquidity with a focus on the capital market. Discussions with lenders and investors to secure the required liquidity and to ensure the company’s post-crisis stability are on a good path and Swissport remains confident to raise the necessary liquidity within the available time frame.”
Swissport is owned by China’s troubled HNA Group, which has been looking to offload it for some time.