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.