Menzies challenges Swissport licence

MENZIES AVIATION, a
subsidiary of Scottish firm
John Menzies, has confirmed
that it is taking Airports
Company South Africa (ACSA)
to court over the award of a
third ground handling licence
to Swissport.
“We welcome competition
but it has to be constructive.
All we want is a fair market,”
said Forxyth Black, Menzies’
senior vice president for Africa.
He explained that when they
tendered for the licence they
expected to have a fair go at
getting their share of 100%
of the market and since they
were awarded their licence on
March 1, they had invested
R200 million in the country
based on this expectation.
With Swissport first getting
a temporary and now a
permanent licence to handle
SAA in a private deal with the
airline, this excluded at least a
third of the available market
for Menzies and BidAir.
“This is a big worry as we
are new to the country. We
came in and delivered on the
promises but now everything
has changed and both Menzies
and BidAir feel that we are
now not on solid footing. The
world won’t end and we won’t
leave the country but if a
third licensee starts operating
then we cannot run our
infrastructure as is and we
will have to reorganise,”
explained Black.
He says they are basing
their claim on three issues.
Firstly, Acsa has a report from
an international aviation
company which advises them
not to award a third licence
as this will be detrimental to
market dynamics.
Secondly, it appears that
when Swissport tendered for
a licence they were given a
different contract from the
identical one which Menzies
and BidAir Services signed. The
requirements were different
and in particular the same
investment was not required
from them.
Thirdly, Acsa’s governing
act precludes it from issuing
new licences which are
economically prejudicial to
current licence holders.
He stressed that Menzies
did not take the decision to go
to court lightly. They spoke to
Acsa numerous times about
the economic risk of awarding
a third licence as, if there
are three licensees, there is a
good chance that no-one will
make any money. Black says
they were heard but nothing
was ever really done and they
only found out by chance that
Swissport had been awarded
the third licence – they
weren’t formally told by Acsa.
Acsa communications
manager Solomon Makgale
says the company will
obviously defend the matter.
“In our view we made it clear
from the beginning that we
intended awarding three
licences. We held back on one
licence deliberately until the
legal issues were resolved after
Equity said they believed their
licence had not expired.
“The market is viable and
this application will deliver
what the ground handling
industry requires, namely
competition and the ability for
airlines to choose. We have
the same requirements for all
ground handling companies
operating at airports. We do
not favour any companies
over others,” he told FTW.
Blake Sclanders, Swissport’s
vice president for marketing
in South Africa, declined to
comment on the issue until it
has been resolved.