Ground handling consolidation is continuing apace, with Menzies Aviation agreeing to acquire a controlling 50.1% stake in TAP Air Portugal ground handler Groundforce Portugal, which entered insolvency in August 2021.
Serviços Portugueses de Handling (SPdH), which operates under the brand Groundforce Portugal, was created in 1945 as TAP’s internal ground-handling unit. It was privatized in 2003 and is now co-owned by three shareholders, Pasogal (50.1%), TAP (43.9%) and regional carrier Portugalia Airlines (6%).
Groundforce Portugal provides TAP with ground handling at the airline’s Lisbon home base, as well as airports in Faro, Funchal, Porto, and Porto Santo. However, on May 10, 2021, TAP made a creditor filing for Groundforce Portugal’s insolvency, which was granted in August 2021.
Kuwaiti ground handler National Aviation Services (NAS) was selected as Groundforce’s preferred bidder in August 2022. But, around the same time, NAS and its parent company Agility acquired Scottish ground handler Menzies Aviation in a $1 billion takeover.
On April 12, Menzies—now under its new ownership—announced that it had signed a share-subscription agreement with TAP and the insolvency administrators to acquire 50.1% of Groundforce. “This transaction is further evidence of our scale and ability to enter a market in a meaningful way, as a long-term investor,” Menzies Aviation chairman Hassan El-Houry said.
TAP described the agreement as “the culmination of a long and very demanding process” and “a decisive step” toward Groundforce’s recovery, noting that the change of ownership fits with the airline’s own restructuring plan. “The proper operation of Groundforce is fundamental for TAP’s activity and for the satisfaction of its customers,” TAP said.
Groundforce handles over 100,000 aircraft turns each year, across five of Portugal’s busiest airports. While TAP is Groundforce’s main customer, the company provides ground and air cargo services to several other airlines.
A recovery plan will now be submitted to Groundforce’s insolvency administrators, and this will then need to be approved by the company’s creditors. If all necessary approvals are secured, Menzies will become Groundforce’s majority owner and TAP will claim the remaining shares as a creditor, “without additional capital contribution by TAP.”
“Groundforce has had a leading position in the aviation services market in Portugal for decades,” Menzies Aviation CEO Philipp Joeinig said. “We will work to ensure a seamless transition for all stakeholders including airline customers and employees.”
On completion, Menzies Aviation will have a 65% market share in Portugal, with operations at five of the country’s airports and more than 3,000 employees.
In a separate big-ticket deal, Singapore-headquartered catering and services provider SATS has just completed its acquisition of cargo handler Worldwide Flight Services (WFS) for €1.3 billion ($1.4 billion) from alternative investment fund Cerberus. This gives WFS an enterprise value of €2.25 billion.
WFS will become a fully owned subsidiary of SATS but will retain its Worldwide Flight Services branding and its Paris headquarters. Combined, SATS and WFS have a global footprint of 201 cargo and ground handling stations in 23 countries.
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