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Airport Ground Handling Companies Hit Financially

Airport ground handling companies here in Greece now suffer the same financial blows felt by airlines after the New York terrorism attack. Airlines, in an dire attempt to cut costs wherever possible, have made life unbearable for some independent companies, not least of which are Greece’s three ground handling companies formed after Olympic Airways lost its monopoly on the sector.

Perhaps hit the hardest, however, are Goldair and Swissport. After losing two of their basic clients, the future of both is in question. Goldair’s employees are wondering if they’ll be working tomorrow after the loss of Axon Airlines and Aegean/Cronus, their two most valuable customers.

Axon Airlines, which closed last month, represented 30-35% of annual revenue for Goldair. The Aegean/Cronus decision to terminate its cooperation with Goldair Handling was somewhat of a surprise as the private Greek airline was Goldair’s major shareholder (it held 22% of Goldair Handling) as well as its most important client. Aegean/Cronus which is about to increase its share capital by 23.5 million euros (8 billion drachmas), decided to provide ground handling services on its own at the El.Venizelos Athens International Airport by leasing the equipment from Swissport.The handling company, which expected revenue this year of 19.9 million euros (6.8 billion drachmas), will likely announce losses of more than 3.2 million euros (1.1 billion drachmas) for 2001.

Among the company’s shareholders are Goldair, Globe Ground (25%), Fraport (Frankfurt airport’s company), Alpha Venture, as well as Aegean (22%). The latter, however, said it will sell its percentage and therefore will not participate in the programmed increase of Goldair Handling’s share capital.

Swissport that is the result of the cooperation between Swissair and Lamda Development, part of Latsis group of companies, suffered a knee-buckling blow when its holding company, Swissair, cut air schedules, and after its partially-owned Sabena, a major Swissport client, shut down.

In the light of these developments, both Swissport and Goldair that are present at three Greek airports (Spata, Heraklion, and soon at Thessaloniki) are re-evaluating their strategies and their investment plans in order to diminish unfavorable effects while preserving their development and expansion pace. It appears that repercussions of the terrorism attack are just now being painfully felt by most of the travel and tourism industry.

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