Thanks to a flurry of takeover announcements involving industry behemoths, it has been a busy summer in the mergers and acquisitions department. Rumblings involving one other major player suggest that more change lies ahead that will redraw the landscape in the air cargo business.

Arguably the most massive tectonic shifts are occurring on the handling side, as HNA Group is going to take over Swissport, itself a large player on the scene, and dnata moves into Amsterdam with the acquisition of Aviapartner.

Dubai-based handling firm dnata continued its European expansion with the acquisition of the Dutch handling activities of Brussels-based Aviapartner for an undisclosed sum at the end of July. The latter’s cargo operations at Amsterdam Schiphol comprise a 44,000-square-metre warehouse equipped with facilities to handle various specialist services, including the Schiphol Animal Centre and Temperature Control Centre, as well as freighter ramp handling operations. Aviapartner employs 430 staff and handles 360,000 tonnes of cargo a year.

“Amsterdam is a key European cargo hub. We look forward to working with Amsterdam Schiphol Airport to support the continued growth at this important hub,” says Stewart Angus, dnata’s divisional senior vice president of international airport operations.

With the foray into Amsterdam, dnata now has presence at ten European airports, up from just four two years ago. Altogether it now has a footprint at 26 airports worldwide, handling more than 2 million tonnes of cargo per year.

Also at the end of July, HNA Group, the parent of Chinese airline Hainan Airlines, announced a muscular push into ground handling with an agreement to buy Swissport for US$2.8 billion. Handling about 224 million passengers and more than 4 million tonnes of cargo a year, Swissport is the world’s largest ground handling firm. HNA has indicated that it intends to run its new acquisition as a stand-alone business.

Besides Hainan Airlines and Swissport, the HNA Group also owns freighter airline Yangtze River Express, it has a controlling interest in Hong Kong Airlines and holds a stake in Turkey-based freighter outfit myCargo Airlines.

The takeovers of Swissport and Aviapartner’s Dutch operations came just two months after Swissport’s main rival, Worldwide Flight Services, changed owners. It was acquired in May by Platinum Equity. The handling firm has a presence at over 140 major airports, employs 12,000 people and tabled over US$696 million in revenues last year, handling four million tonnes of cargo and 50 million passengers.

Meanwhile, the integrators continue to jockey for position, beefing up their logistics capabilities. The latest move on that front is the acquisition of Coyote Logistics by UPS in a US$1.8 billion deal.

With revenues of US$2.1 billion last year, Coyote is one of the larger freight brokers in North America. Its brokerage network spans over 35,000 trucking companies, and the firm manages about 6,000 loads a day for some 12,000 customers.

According to UPS, the takeover significantly expands its portfolio, adding large-scale non-asset-based full truckload and transportation management services to its line-up, providing growth opportunities and offering synergies for backhaul utilization and purchased transportation as well as cross-selling.

“The brokered full-truckload freight segment is a high growth market and we expect it will continue to outpace other transportation segments,” said UPS CEO David Abney. “This high-quality acquisition significantly increases UPS full-truckload scale, and we are uniquely positioned to take advantage of exciting new revenue growth and synergy opportunities.”

“Through the Coyote network, UPS will provide our combined customer base with an even more seamless supply chain solutions portfolio from multi-modal freight shipments to small-package delivery,” said Alan Gershenhorn, UPS executive vice president and chief commercial officer.

Meanwhile the US$4.8 billion takeover of TNT by FedEx is facing in-depth scrutiny by the European Commission, the authority announced, pointing out that the marriage may cut competition in the market for small packages and lead to higher prices. In light of the fact that the EC thwarted the planned takeover of TNT by UPS two-and-a-half years ago, the announcement was hardly surprising, according to some observers.

Both FedEx and TNT issued statements to the effect that will continue to cooperate with the commission and expect the transaction to close in the first half of next year.

Another logistics behemoth, DB Schenker, is surrounded by speculation about a possible partial sale by owner Deutsche Bahn. The German rail company is working on a plan to trim costs by €200 million and considering options of restructuring the group, but it has ruled out ceding control over DB Schenker.

The rail company has been hamstrung by lack of growth in its home market; it is facing in its rail freight business “more intense competition and pressure on margins, due to the drop in fuel prices” (according to CEO and chairman Rudiger Grube); and it suffered losses of €500 million from strikes in 2014 and 2015.

Grube warned that “bold, forward-looking decisions” were needed. While a partial privatization is possible, he ruled out a sale of Schenker, though. “Nothing has been decided yet. And I would like to make it perfectly clear that we are not considering selling these companies,” he declared. “On the contrary, we will retain business management control of both DB Arriva and DB Schenker Logistics. Should partial privatization take place at a later point, it is of key importance to us that we be able to further consolidate both businesses.”

By Ian Putzger

Air Freight Correspondent | Toronto