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  • AirAsia, Singapore’s SATS form ground handling partnership

    AirAsia, Singapore’s SATS form ground handling partnership

    Airasia is entering into a ground handling services joint venture with Singapore-listed ground handling and in-flight catering services provider SATS Ltd with the aim of growing the operations across the Asean region.

    This would be effected through a share swap agreement and a share sale agreement which will see AirAsia and SATS owning a 50% stake each in Ground Team Red Holdings Sdn Bhd (GTRH), the low-cost carrier told Bursa Malaysia.

    SATS is swapping an 80% equity interest in unit SATS Ground Services Pte Ltd (SGS Singapore) for an 11.4% stake in AirAsia’s unit GTRH. AirAsia will sell a further 38.6% stake in GTRH to SATS for S$119.3mil (RM370.97mil) in cash.

    At the same time with the share exchange, AirAsia will transfer 98% of Ground Team Red Sdn Bhd (GTR Malaysia) – which provides ground handling services in Malaysia – to GTRH, which (as mentioned above) will also hold 80% in SGS Singapore, which will serve SATS’ customers at Changi Airport’s new Terminal 4 (to open Tuesday).

    AirAsia will hold directly 2% in GTR Malaysia and 20% in SGS Singapore.

    According to AirAsia, it will realise a gain on disposal of RM365.7mil in the fourth quarter of this year following the sale of the GTRH stake.

    The airline also said the partnership with SATS would foster greater efficiency and cost savings to its ground handling operations.

    “This will facilitate growth of AirAsia, with SATS bringing in the necessary expertise and skills set to create a synergy which will enhance the ground handling business,” it explained.

    In a joint press statement, AirAsia and SATS said GTRH would be renamed SATS Ground Team Red Holdings Sdn Bhd.

    AirAsia and SATS, responsible for growing the ground handling business in their respective markets, would also explore expansion into Indonesia, the Philippines and Thailand in the near future, the statement said.

    AirAsia group chief executive officer Tan Sri Tony Fernandes said: “Today, we are very pleased to announce that two home-grown companies have partnered together to form a new Asean joint venture.

    “We believe this joint venture will allow AirAsia to unlock significant value and grow it as we have done with AirAsia Expedia, our aviation academy Asian Aviation Centre of Excellence and later this year, our leasing arm Asia Aviation Capital. Our assets are very valuable and slowly people are beginning to see the true value of AirAsia, as today’s announcement proves.”

    SATS, through wholly-owned subsidiary SATS Investments, also has an in-flight catering service partnership with Malaysia Airlines Bhd (MAB).

    SATS owns a 49% stake in Brahim’s SATS Investment Holdings Sdn Bhd, which in turn owns 70% in Brahim’s  SATS Food Services Sdn Bhd (BSFS). The remaining 30% equity interest in BSFS is held by MAB.

    BSFS, whose main customer is MAB, is the principal in-flight catering service provider at both Kuala Lumpur International Airport and Penang International Airport. It also provides cabin handling services covering laundry services for pillows and blankets, filling the cabin trolley with items for in-flight sales as well as providing passenger headsets, newspapers and periodicals.

  • SATS unveils a brand new US$21mn eCommerce AirHub

    SATS unveils a brand new US$21mn eCommerce AirHub

    SATS, a provider of Gateway Services and Food Solutions, unveiled its new eCommerce AirHub, at a ceremony officiated by S Iswaran, Minister for Trade and Industry (Industry).

    The $21 million facility, co-funded by the Civil Aviation Authority of Singapore (CAAS), enhances Changi’s eCommerce mail sorting capability to support the growing eCommerce market. This new 6,000 sqm facility also features new innovations that will improve productivity and enable airport workers to acquire new skills.

    By deploying state-of-the-art technology, SATS has multiplied mailbag processing capacity by more than three times and streamlined the mail sortation process to deliver quicker turnaround for international eCommerce mail. Processing time is now reduced by 50 per cent. At the same time, automation has provided opportunity for employee upskilling. SATS is currently the only ground handler in the region to operate such an automated airside facility.

    Alex Hungate, president and CEO of SATS said, “eCommerce is expected to continue on its growth trajectory in the region and beyond with continued strong consumer demand. The SATS eCommerce AirHub enhances the competitiveness of the whole airfreight industry in Singapore by offering greater speed and transparency, as well as higher capacity to handle future growth.”

    Kevin Shum, director-general of CAAS, said, “CAAS is pleased to support the establishment of the eCommerce AirHub under the Aviation Development Fund. We are delighted that this initiative has enabled SATS staff to benefit from an enlarged job scope, higher pay, and a more comfortable and conducive workplace. Such collaborations are part of our efforts to transform Singapore Aviation, make the  2 sector more efficient and competitive, create better jobs and improve productivity using technology.”

    Tapping on technology for greater efficiency
    At the official opening of the SATS eCommerce AirHub this afternoon, the company unveiled several new innovations. These include a fully automated mail sortation system that increases the mailbag processing capacity of SATS to more than 1,800 an hour – up from 500 previously.

    Additionally, due to interface integration with SingPost’s airmail consignment operations and the facility’s locality within the free trade zone on the airside, mail sortation operation is streamlined to eliminate the need for mailbags to be transported to and from the hub.

    The combination of these factors has enabled faster mailbag processing that reduces turnaround time by 50 percent – from six hours to three – thus allowing international eCommerce mail to connect to an earlier flight for faster delivery.

    Traceability is also improved at the SATS eCommerce AirHub, as customers, such as SingPost, can now better track and trace their mail via the data interface, for example checking connection status by confirming arrival and departure times.

    Woo Keng Leong, chief executive officer, Postal Services, SingPost, said: “The improved efficiency and tracking from our collaboration with SATS will enhance SingPost’s international mail operations amid Singapore’s growing importance as an eCommerce logistics hub.”

    As well as improving service, SATS eCommerce AirHub will also be more productive: airmail consignment operations are targeted to be at least 30 per cent more efficient with full automation.

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