JOHN Menzies wins easyjet handling contract
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JOHN Menzies wins easyjet handling contract
JOHN Menzies has won a £20 million contract with EasyJet to handle all passengers and baggage at Luton airport, the budget airline’s main hub.
The Edinburgh-based group said the four-year deal will come into effect from 12 January, with 262 staff transferring to Menzies from two EasyJet subsidiaries.
The deal follows a string of similar contracts with budget airlines for the group’s Menzies Aviation division, which has been expanding rapidly since Menzies sold its newsagent chain to WH Smith.
Menzies head of investor relations John Geddes said: "What we’ve been doing in the past few months is positioning ourselves towards the low-cost market, which is where all the growth is in aviation.
"Traditionally the likes of Servisair has been all things to all men, handling BA passengers one minute, and EasyJet the next. But the low-cost airlines work on a slightly different model and we’ve adapted to that. For one thing, they all fly the same type of aircraft so you only need one set of kit."
He added: "We work with EasyJet already in both Amsterdam and Prague, but this is its main hub we’re talking about. We’re talking about something like 60 flights a day compared with 21 flights a day at Prague."
Menzies handles baggage for airlines all over the world. Its other budget carrier clients include bmi baby at East Midlands airport and Virgin Express in Amsterdam.
The aviation arm contributes around £250m to the group’s annual revenues of about £2 billion. Menzies makes most of its money from newspapers and magazines distribution.
But, hit by the war in Iraq and the SARS outbreak, the aviation arm was largely blamed for the slump in profits from £8.8m to £6.4m which the firm announced in September.
The diversification has been prompted by Patrick Macdonald, who took over from David Mackay as chief executive earlier this year.
Macdonald has also put the brakes on an acquisition programme designed to expand the aviation division, stating that some of the businesses it has bought have underperformed. He has singled out Fr8, a Dutch cargo handler bought for £4.9m in February 2002 and JASA, an airline cleaning unit based in Australia.
News of the EasyJet deal failed to move Menzies shares, which have underperformed the FTSE’s support services sector by about 12 per cent since the start of the year. The stock currently stands at 320p.
Menzies will be handling all the ground operations for EasyJet at Luton, from information, sales and check-in staff to the baggage handlers that load the planes. Geddes stressed that "all the people in those orange uniforms" will actually be employees of the Edinburgh firm.
The deal has been structured as a joint venture between the two firms, which sees Menzies Aviation Group take a 76 per cent stake and EasyJet retain the remaining 26 per cent. EasyJet chief executive Ray Webster said this allowed the airline to "maintain a strategic interest in the business, influencing its culture and future development".
The Edinburgh-based group said the four-year deal will come into effect from 12 January, with 262 staff transferring to Menzies from two EasyJet subsidiaries.
The deal follows a string of similar contracts with budget airlines for the group’s Menzies Aviation division, which has been expanding rapidly since Menzies sold its newsagent chain to WH Smith.
Menzies head of investor relations John Geddes said: "What we’ve been doing in the past few months is positioning ourselves towards the low-cost market, which is where all the growth is in aviation.
"Traditionally the likes of Servisair has been all things to all men, handling BA passengers one minute, and EasyJet the next. But the low-cost airlines work on a slightly different model and we’ve adapted to that. For one thing, they all fly the same type of aircraft so you only need one set of kit."
He added: "We work with EasyJet already in both Amsterdam and Prague, but this is its main hub we’re talking about. We’re talking about something like 60 flights a day compared with 21 flights a day at Prague."
Menzies handles baggage for airlines all over the world. Its other budget carrier clients include bmi baby at East Midlands airport and Virgin Express in Amsterdam.
The aviation arm contributes around £250m to the group’s annual revenues of about £2 billion. Menzies makes most of its money from newspapers and magazines distribution.
But, hit by the war in Iraq and the SARS outbreak, the aviation arm was largely blamed for the slump in profits from £8.8m to £6.4m which the firm announced in September.
The diversification has been prompted by Patrick Macdonald, who took over from David Mackay as chief executive earlier this year.
Macdonald has also put the brakes on an acquisition programme designed to expand the aviation division, stating that some of the businesses it has bought have underperformed. He has singled out Fr8, a Dutch cargo handler bought for £4.9m in February 2002 and JASA, an airline cleaning unit based in Australia.
News of the EasyJet deal failed to move Menzies shares, which have underperformed the FTSE’s support services sector by about 12 per cent since the start of the year. The stock currently stands at 320p.
Menzies will be handling all the ground operations for EasyJet at Luton, from information, sales and check-in staff to the baggage handlers that load the planes. Geddes stressed that "all the people in those orange uniforms" will actually be employees of the Edinburgh firm.
The deal has been structured as a joint venture between the two firms, which sees Menzies Aviation Group take a 76 per cent stake and EasyJet retain the remaining 26 per cent. EasyJet chief executive Ray Webster said this allowed the airline to "maintain a strategic interest in the business, influencing its culture and future development".
For one thing, they all fly the same type of aircraft so you only need one set of kit.
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This is a Joint Venture where, effectively, 75%(??) of the current easyJet self-handling operation at LTN is being transferred to Menzies Aviation Group.
The Joint Venture is very similar to the "easyTech" engineering arrangement which exists at a number of eJ airports. easyTech is 25%('ish) owned by eJ, and 75%(ish) by FLS, and fully managed by FLS. It has the advantage that it gives eJ a fully dedicated engineering set-up, but with the management outsourced to an established engineering company.
Menzies already handle eJ in AMS and PRG.
The Joint Venture is very similar to the "easyTech" engineering arrangement which exists at a number of eJ airports. easyTech is 25%('ish) owned by eJ, and 75%(ish) by FLS, and fully managed by FLS. It has the advantage that it gives eJ a fully dedicated engineering set-up, but with the management outsourced to an established engineering company.
Menzies already handle eJ in AMS and PRG.
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Sorry been harping on about handling agents on another thread.... I think newsatcher mentioned a more familiar name..... dont Menzies own a major stake in Globeground and are now therefore part of Servisair???
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Sorry InTrim, should have been more specific. Menzies, to me, is a newsagent, albeit a large one! Therefore I was surprised to hear that they were also involved in the aviation business, through ground handling. Was wondering if they got there by internal expansion, or bought a "ready-made" operation from someone. 
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newswatcher,
Menzies Aviation Group is huge and has been in Ground Handling for a number of years. Very big in some US airports, plus some in Europe, Middle East, etc. Relative newcomers to the UK.
In trim.
Menzies Aviation Group is huge and has been in Ground Handling for a number of years. Very big in some US airports, plus some in Europe, Middle East, etc. Relative newcomers to the UK.
In trim.
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In trim
Alas bud, what you say may indeed, as I do not doubt it be true.
I aim no flack at 'Menzies' staff at all in the UK, but my experiences of them at EDI (as a Company) are shocking.
I say again, before I am critcal, the staff are bonza, no two ways,
but the service lacking, not for their want of trying.
An FBO trying to service an Airline operation, Redcaps loading bags, no real facilities if the LHS wants non standard met/ais,
SRMs missed, so flights go late for no reason, no ability to send Load details, despite running a KLM system.
The same landline number will be answered 'Scotair' 'Execair' 'Menzies Cargo' , you need to phone......'hello Scotair.......please phone.........'hello cargo!!!!
Good luck EZ, if you get the same bunch of bods we have, they will run around like blue A flies for you.
You get what you pay for, and can the staff at EDI stay put......Please. EZ will keep Vodaphone happy at LTN
I aim no flack at 'Menzies' staff at all in the UK, but my experiences of them at EDI (as a Company) are shocking.
I say again, before I am critcal, the staff are bonza, no two ways,
but the service lacking, not for their want of trying.
An FBO trying to service an Airline operation, Redcaps loading bags, no real facilities if the LHS wants non standard met/ais,
SRMs missed, so flights go late for no reason, no ability to send Load details, despite running a KLM system.
The same landline number will be answered 'Scotair' 'Execair' 'Menzies Cargo' , you need to phone......'hello Scotair.......please phone.........'hello cargo!!!!
Good luck EZ, if you get the same bunch of bods we have, they will run around like blue A flies for you.
You get what you pay for, and can the staff at EDI stay put......Please. EZ will keep Vodaphone happy at LTN
