(ONLINE UPDATE) Swissport Fights Back

May 23, 2013
Win, lose or draw, Swissport International Ltd., intends to fight the verdict and re-enter the Ukrainian market.


After originally saying it would not appeal the ruling, on April 16 Swissport appealed the case to the Economic Court, Ukraine’s highest such court for commercial cases.

“We are 100 percent convinced that Swissport is right and Ukraine International, along with its shareholders, are committing a crime and they have taken our shares in an unfriendly way,” Mark Skinner, senior vice president for Swissport Ground Handling – Europe, told Air Cargo News on April 21.

In the meantime, UIA sounds like a sore winner.

“We received Swissport’s cassation appeal only on April 22,” Satskaya said. “However, it is incomplete as it fails to contain any pleading. Therefore, such appeal is either generally invalid and as such will not be considered by the court or it is an attempt to hinder due process of law.”

But even Swissport knows its legal prospects are far from promising.

Caroline Bueth, Swissport’s senior legal consultant told Cargo Forwarder the chances of winning an appeal “is highly unlikely.” Why go on then? “Because we intend utilizing all judicial possibilities, although a fair trial seems not to be very likely, it cannot be completely excluded either,” she answered.

Swissport, after all a company with almost $2 billion in revenue with operations in 38 countries, is also applying political and diplomatic pressure on the case by asking for support from the president and vice president of the European Commission as well as members of the Ukraine delegation.

Also, Swissport informed both the Swiss and French embassies of the proceedings. (Swissport, headquartered in Zurich, Switzerland, is owned by PAI Partners, a French private equity firm.)

News of a private company stripped of its hard work for a token sum could cause foreign investors to shun Ukraine just as the country looks to integrate with Europe.

Government officials have indeed initialed free trade and other business agreements with the European Union. For example, the EU and Ukraine are currently negotiating a comprehensive open skies agreement allowing unrestricted air traffic. As part of these negotiations, the EU is putting pressure on Ukraine’s government to give up its protectionism and safeguard foreign property.

“UIA is not aware of the essence of any such requests,” Satskaya told us. “UIA has always trended to resolve the conflict in a legal rather than in political way. However, once relevant materials are available to UIA we’ll instruct our counsellors to evaluate those inter alia [too specify one example out of many possibilities} in terms of corruption shading.”

During its ill-fated appeal Swissport also sent a letter to IATA chief executive Tony Tyler, alleging that UIA is in financial trouble after the airline failed to pay Swissport for its business in Tel Aviv, Zurich and Geneva. The letter urged IATA to review the airline’s Operational Safety Audit program.

While Mayberg seems to keep a low profile, he did take part in the UIA press conference in March, and insisted that Swissport is trying to mix politics into the conflict by using its famous name and continued to take issue with any claim that UIA illegally seized Swissport Ukraine.

"We've sent a letter to Swissport International with a claim to deny the information,” he said. “If it is not denied, we'll protect our interests.”

Win, lose or draw, Swissport plans to re-enter the Ukrainian market – but, of course, not first before carefully vetting its future equity partners.

“We will continue to fight to get our company back and it is our intention to re-enter the Ukrainian market,” said Juan-José Andrés Alvez, executive vice president ground handling, Europe, Africa and Latin America for Swissport. “Should this not be possible under normal business conditions then the aviation industry will have failed to support and defend open competition and ethical business practices.”

In interviews with a number of publications, Skinner remains upbeat about the country’s commercial prospects.

“Ukraine offers great business opportunities in a very dynamic market environment,” he told The Load Star even before the appellate court reached its verdict “But at the same time, investors need to be aware that there are serious risks that they have to take into account.”

Rather than trying again at a joint venture, Skinner also raised a second option.

“We are still interested in doing business in Kiev and some other Ukrainian airports,” he told Cargo Forwarder after the appellate court effectively forced Swissport out of the country, “but would rather prefer a franchise partner running the handlng activities under our company’s name.”

About the Author

Steve Smith | Editor