Swissport pulls the plug on loss-making Belgian ground handling unit
Swissport Belgium is to file for bankruptcy after the coronavirus crisis pushed the struggling operation over the edge.
Parent Swissport International says the decision impacts the unit and its Swissport Belgium Cleaning subsidiary, but that the group’s cargo business in Brussels and Liege is not affected.
“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,” says Swissport chief executive Eric Born.
He adds the business was ultimately unable to underpin a turnaround pplan with the required long-term 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,” Born adds.
The group says that while some progress had been made of late, the Covid-19 crisis has ”blocked the narrow path to recovery” for the two Belgian units. It notes additional funding from Swissport international is “not a workable option” in the current environment.
Full-year financial filings from Swissport Belgium for 2018 and 2017, the most recent available through the National Bank of Belgium, show respective losses of €3.4 million and €4.7 million.
”Beyond the chronic challenges in Brussels, the current market crisis is forcing Swissport International to adopt a stricter practice regarding the funding of any loss-making subsidiaries, as to safeguard the group’s financial health,” the company says.
Swissport says its global revenues collapsed 80% and is “only gradually” starting to recover. It adds it 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,” the company says.