DNATA buys two UK airport firms

DUBAI // The Dubai National Air Travel Agency (DNATA) says it has agreed to buy the cargo and ground handling operations at two UK airports from Britain's Go-Ahead Group. DNATA, which is owned by the Investment Corporation of Dubai and is part of the Emirates Group, said it would pay £15 million (Dh91.9m) for the ground operations of the London-listed company.

The 50-year-old company will acquire Plane Handling, which offers cargo and ramp-handling services at Heathrow Airport in London and cargo-handling services at Manchester Airport. DNATA also plans to acquire passenger and ramp-handling operations at Terminals 3 and 4 at Heathrow from Aviance. Both companies are part of Go-Ahead. "These businesses already provide an outstanding quality of service to their airline customers in the UK and will be a perfect fit with our businesses in Dubai, Singapore, Switzerland, Australia and at other points across the globe," said Gary Chapman, the president of DNATA.

Plane Handling and Aviance's Terminal 3 and 4 operations provide airline and cargo handling to more than 20 airlines at Heathrow and Manchester, with key customers including Virgin Atlantic Airways, Cathay Pacific, Singapore Airlines, Etihad Airways, Jet Airways, Qantas, Air New Zealand and Emirates. . Go-Ahead Group, which also owns bus and commuter train franchises in London, is selling off the airports businesses in a bid to boost financial performance. It will retain a small number of activities at Heathrow, primarily to support remaining ground handling contracts at Terminal 1.

DNATA plans to complete the transaction by the end of January next year. The company recorded a 66 per cent increase in profits to Dh507m (US$138m) in its latest year. Revenues increased by about 25 per cent to Dh3.2bn. "We will be spending the next two months working closely with DNATA," said the Go-Ahead chief executive Keith Ludeman. "This announcement marks another important step in delivering the group's strategy, which focuses on growing our core bus and rail operations."

Go-Ahead Group said yesterday it would book a £20m loss in the first half by selling most of its aviation and ground-handling operations. "The company reported a loss of £4.5m last year. In the UK, markets responded positively with the stock advancing by about 2.9 per cent in afternoon trading. "It's no secret that this company [Go-Ahead] has had a difficult year, but it could be a profitable opportunity for DNATA to take advantage of the upturn in the aviation industry," said Joseph Thomas, an analyst at Investec in London.

"From Go-Ahead's perspective, this no doubt is a strategic move, as its current ground handling services don't fit with its core business and the acquisition enables it to focus on its key core business." @Email:[e-mail]