Edinburgh aviation services giant Menzies 'resilient' as Omicron triggers new border controls

Menzies, the Edinburgh-headquartered aviation services group, has highlighted its resilience in the face of tighter global travel restrictions and stressed that less than 10 per cent of its business relates to long-haul passenger flights.

By Scott Reid
Tuesday, 30th November 2021, 8:02 am
Updated Tuesday, 30th November 2021, 8:02 am

Releasing an update to investors as many counties reintroduce border controls in the face of the new Omicron variant, Menzies said trading for the full year would be at least in line with market expectations after a stronger-than-expected performance in recent months.

It noted that, globally, the air cargo services market remains robust, and it was seeing a steady increase in aircraft movements in all regions, supporting a continued recovery in its ground and fuelling services businesses.

Commercial momentum has continued with “some excellent new contract wins and retention of key contracts”, bosses added.

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Menzies Aviation operates at more than 200 airports in 37 countries, supported by a team of 25,000 people.

Menzies Aviation operates at more than 200 airports in 37 countries, supported by a team of 25,000 people.

Despite the negative impact on the global aviation industry from the pandemic, the firm has sealed a string of contract renewals and new business wins over the past 18 months.

The latest update did flag some challenges facing the business, including labour availability, particularly in North America.

“This issue is more prevalent within the ground services business, with our air cargo and fuelling businesses less affected,” it noted.

The group also pointed to inflationary pressures, saying that it does “at times” discuss passing through price increases with customers “to ensure service delivery is maintained and airline on time performance is protected”.

Menzies told investors: “Overall, we forecast a strong end to the year, particularly in air cargo services and we are confident that the growth ambitions we have for future years can be met and exceeded.”

Philipp Joeinig, chairman and chief executive, said: “Despite current news on travel restrictions, we have proved time and again that we are a resilient business due to our product mix, geographical diversity and the fact that less than 10 per cent of our business relates to long-haul passenger flights.

“Our increased focus on air cargo services and emerging markets is delivering great results and enhanced returns. We will continue to pursue our strategic priorities, and this will drive our business forward and allow us to deliver our growth ambitions.”

John Menzies started out in 1833 when its eponymous founder opened a bookshop at 61 Princes Street, Edinburgh which was to become the only wholesale bookseller north of the Border.

The newspaper and magazine distribution business was spun out in 2018, creating Menzies Distribution, and leaving the rest of the firm to focus on providing aviation services.

Last week, Menzies Aviation announced that it had renewed a key contract with EasyJet spanning 21 airports across Europe.

The contract renewals will see the group provide a range of ground services, such as passenger, ramp, cabin cleaning and de-icing, for the low-cost carrier. Collectively, these contracts represent more than 80,000 “turns”, or aircraft movements, annually. Menzies said it had a “well-established” relationship with the airline, dating back more than 15 years.

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