PHOTO
Dnata, the aviation services division of Dubai government-owned Emirates Group, has fully acquired a U.S. airport ground handling operator which it plans to use as a launch pad into the lucrative North American market, the company's president said.
The firm last month purchased a 100 percent stake in Ground Services International Inc. (GSI), which provides ground handling services to international carriers and cargo operators in 14 cities across the United States. The name of the U.S. operator was later confirmed by a dnata spokesperson.
Dnata aims to use the acquisition as a springboard into the North American market, Chief Executive Officer Gary Chapman told Zawya in an interview last week.
"We also see it as a launching pad for the whole of North America, which means Canada, and potentially Mexico," he said. Company officials declined to confirm the financial details of the acquisition.
Dnata last week reported its most profitable year since it was established 57 years ago, with revenue and profit both up 16 percent to 10.6 billion dirhams ($2.9 billion) and 1.1 billion dirhams respectively.
The company made a number of acquisitions last year as part of its global expansion, including stakes in operators in Australia, Brazil, The Netherlands and Italy. The purchase of GSI is not dnata's first venture in the Americas; in November it bought a majority stake in Brazil's RM Ground Services, its first step into South America.
Established in 1959, dnata has operations in 79 airports across the Middle East, Europe, Asia Pacific, Africa, North America and South America. Offering ground handling, cargo, travel, and flight catering services, it managed operations for over 380 airline customers around the world.
The move into the U.S. market comes amidst tension between America's three biggest carriers and Emirates airline, dnata's sister company which is also part of the Emirates Group.
The dispute focuses on allegations by Delta, United and American that Emirates, along with Abu Dhabi's Etihad Airways and Qatar Airways, have received $42 billion in subsidies from their respective governments, which the Americans claim has given them an unfair advantage.
The allegations have long been disputed by Emirates executives and Emirates president Tim Clark again dismissed the argument on Tuesday, saying their campaign against Gulf airlines was fruitless.
"As far as I can see...remember [the row] started in February 2015 and here we are in the middle of May 2016 [and over that time] we have increased our production into the U.S.; opened Orlando, and we've put more and more 380s in to the U.S. I don't think really [the campaign] has succeeded, has it?" Clark told reporters at a press conference to announce Emirates Group annual results.
In response to the U.S. carriers' subsidies allegations, Emirates last year issued a 27 page rebuttal. "With Emirates being the largest and most visible airline in the region, the criticisms are often levelled at us, even though self-sufficiency and profitability has been in Emirates' DNA since 1985... All of our achievements are well-earned, transparently documented and borne out of our efforts to sustainably build our company," it said in the report online.
© Zawya 2016
