Near monopoly earns Swissport record profits
(eTN) - While the monopoly of Swissport as the sole handling agent at key Tanzanian airports has officially been lifted, and a few more licenses were granted last year, the reality is that it remains a quasi-monopoly, which is bringing huge profits and benefits to the shareholders, all of whom are known to overtly or covertly work on maintaining the status quo and keeping the competition at arm’s length.
Information from Dar es Salaam suggests that that the annual dividend per share will be over 157 Tanzania shillings, compared to just over 97 a year ago.
Airlines, though, are said to be unhappy with the continuously high charges, compared to what is commonly now being quoted in Nairobi, where some 10 handling companies have brought rates down and improved services, as it should be in an open market economy.
Flights in and out of Tanzania’s two main airports, Julius Nyerere International in Dar es Salaam and Kilimanjaro International outside Arusha, have last year grown by nearly a quarter, with cargo volumes still up by a remarkable 17 percent, all contributing to an increase in handling income for Swissport and the subsequent rise in profits.
This is a similar trend to Entebbe, where a dominant handling company pulls the strings and keeps charges way above Nairobi, too, prompting Air Uganda last year to seek the coveted “self-handling status,” which saved that company nearly a US$1million in fees and charges with the savings invested in their own equipment, along with creating more jobs at U7. Here, too, airlines have complained about the level of charges, citing time and again comparable figures from Nairobi, something which has also given the regulators fodder for thought, as they actively seek to invite an international bidder to come and invest in ground-handling in Entebbe to make the airport overall more competitive.