Privatisation puts self-handling on TAP’s radar with Menzies in the equation

The tender for the award of new ground handling licences at Lisbon, Porto and Faro airports is causing concern among workers and airlines given the uncertainty surrounding the outcome of the process. One thing seems certain: if the Spanish consortium is selected, TAP will move towards self-handling and may subcontract Menzies.

In January, the jury for the public tender launched in 2024 by the National Civil Aviation Authority (ANAC) awarded the contract to the consortium comprising the Spanish firm Clece, part of Florentino Pérez’s ACS group, and South, an IAG group company spun off from Iberia’s ground handling operations. In second place was SPdH, 50.1% owned by the British firm Menzies and 49.9% by TAP, which currently holds the licences.

According to several sources close to the process contacted by ECO, the fact that South belongs to an airline competing with TAP and that TAP is in the midst of a privatisation process – in which rival groups to IAG, such as Lufthansa and Air France-KLM, have already expressed interest – severely limits the Spanish consortium’s prospects.

This view is shared by the main trade union bodies affiliated to SPdH. “South is part of the Iberia group and TAP does not want to be served by a competitor”, says Rui Souto Lopes, a leader of the Union of Handling, Aviation and Airport Workers (STHAA).

Fernando Henriques, leader of the Aviation and Airport Workers’ Union (SITAVA), the largest union represented at SPdH, adds that “the fact that South belongs to the IAG group and that the IAG group is a bidder in the privatisation process is seen as a conflict of interest”.

In a response to the Lusa news agency in early February, the IAG group denied that there was any incompatibility: “We do not see any conflict of interest between our ground handling operations and the ongoing privatisation process at TAP. This model is very common in global aviation, with airlines owning ground handling companies that provide services to third parties”.

At TAP, the prospect of self-handling was once seen as undesirable; now, it is considered inevitable should South be awarded the licences. The Portuguese carrier has the advantage of already holding licences for ground handling services.

According to ECO’s findings, this self-handling solution will involve hiring staff, but also subcontracting services, notably to Menzies, the only company with the capacity to meet the demands of TAP’s operations.

Everything will depend on the outcome of the process. The Spanish consortium submitted the documentation required by ANAC on the 15th, and ANAC is currently reviewing it. It has a 90-day deadline, which the regulator says it will not allow to run out, as the current licences expire on 19 May.

Should the regulator conclude that South does not meet all the necessary requirements, it will invite the runner-up in the tender: SPdH/Menzies. In this case, everything will remain the same regarding ground handling at Lisbon, Porto and Faro airports.

Meanwhile, last Tuesday, SPdH announced it had filed an application for an injunction to challenge the tender and suspend its effects, should it be granted. SITAVA is considering taking the same course of action, Fernando Henriques told ECO, as the union believes the tender fails to protect workers’ rights by not providing for their transfer to the entity awarded the licences. “As long as there is litigation, this process will not be concluded”, he anticipates.

TAP’s Plan B is considered the “least bad” option by the handling company’s unions, because there will always be jobs that could be lost. “TAP accounts for 70% of Menzies’ operations in Lisbon and 40% in Porto”, says Rui Souto Lopes. “This means that around 30% of jobs in Lisbon and 60% in Porto are not guaranteed.”

In a statement released in December, SITAVA estimated that, under a self-handling arrangement, TAP would need 1,600 staff in Lisbon and 180 in Porto, making a total of 3,743.