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SINGAPORE: Swissport has secured arrangements with Singapore Airport Terminal Services (SATS) and Changi International Airport Services (CIAS) to take over its airline customers in Singapore.
The Zurich-based ground handling firm announced on Monday that it is pulling out of Changi Airport by end-March after three years of operation.
Swissport said the majority of its 300 staff in customer service and cargo operations will remain with the company over the next few weeks. It is now working out a way to hand over its operations as smoothly as possible.
The company said it expects some of its employees to be absorbed by the two operators, while others may have to find new jobs come April 1.
Swissport added that its severance packages are in line with the Manpower Ministry's requirements and are "fair and generous".
The company is also in touch with the National Trades Union Congress (NTUC) to help its workers retrain and find new jobs.
Swissport is owned by Ferrovial, a major European infrastructure and services firm, and has presence in 179 airports across 41 countries.
Analysts said it is unlikely a new player will seek to enter Singapore's ground handling sector to replace Swissport in the near future, given the current global economic downturn and falling demand for air travel.
Nicholas Ionides, regional managing editor (Asia), Flight International, said: "It would be a risky venture for anybody to come into the market as a third player right now.
"Swissport is a very well-established company around the world. It knows its business very well and if they couldn't make it work, it's probably fair to say that it would be tough for somebody else to make it work."
That leaves Singapore's two other ground handlers, SATS and CIAS, to take over Swissport's four airline customers.
The fight for Swissport's customers is expected to be aggressive, especially for Tiger Airways, which is said to have the most growth potential amongst the four carriers.
Tiger Airways said on Tuesday that even if there is an increase in ground handling fees when it switches to another operator, the hike would not affect ticket prices.
Currently, SATS is the ground handler for Cebu Pacific – the other low cost carrier operating at Changi Airport's Budget Terminal.
Swissport's departure means less competition among ground handlers and potentially higher rates. But analysts said Singapore's Changi Airport is unlikely to lose its reputation as a regional hub.
"It's still a very competitive airport. Yes, it's bad news that one of the providers has pulled out. But it's not the be-all and end-all of Singapore by any means," said Mr Ionides.
- CNA/so
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