Aviapartner reorganises and prepares for the current economic environment
The worldwide economic crisis has since the summer of 2008 significantly affected the airline industry across all airports where Aviapartner operates.
In Europe, airlines and airports experienced volume declines up to 15%-20% in passenger flights and up to 30-35% in air freight volumes. This has led to a decline in the volume and profitability of Aviapartner's activities.
Despite this environment, the group's turnover has increased from EUR 344 million in 2007 to EUR 371 million in 2008 (+7.8%), confirming Aviapartner is attracting new customers based on its recognized reputation of high quality services .
However, the loss of volumes in the 3rd and 4th quarter 2008 and the adverse movements in the cost structure, led to a 2008 EBITDA of around EUR 8 million.
Against this background, in 2008, 3i and the new management team i.e. Laurent Levaux as CEO and Kris Geysels as CFO, initiated discussions with a range of parties to address the situation.
These discussions have led to the following:
1) An agreement in principle between the company, the shareholder 3i and funds managed by 3i, and the lenders that have financed Aviapartner. The terms of this agreement lead to a significant reduction in the consolidated financial debt of Aviapartner Holding NV to a maximum amount of EUR 50 million.
2) An agreement in principle for additional liquidity of EUR 35 million (EUR 25 million thereof through a capital increase) that will be made available to Aviapartner Holding NV by the banks, 3i and funds managed by 3i, the management and the mezzanine lender. This fresh liquidity will be available to fund future investments and measures to adapt the group's operations to the reduced volume levels in the sector.
3) The new management is implementing a rigorous simplification and re-organisation of its management, operational, and legal structures in order to restore long-term profitability. Aviapartner has also started renegotiating tariffs and terms with all airports where it is active and is reviewing all contracts with customers and suppliers.
4) The group entered into negotiations with the workers' representations in the countries in which the group operates for new labour agreements that will allow the group to increase flexibility in the work force, reduce labour costs and adapt staffing levels in order to safeguard Aviapartner's competitiveness.
In the last weeks an agreement in principle was reached with the Belgian blue and white collar unions to achieve a more efficient allocation of the labour time and to increase the workers' flexibility at a lower cost. In Strasbourg an agreement was reached to reduce staff by 50%. At Amsterdam Airport Schiphol, the company is in the midst of social negotiations with the employee representatives as the airport is suffering from one of the worst cargo volume drops in Europe. In addition, no bonuses will be granted to the managers in the whole group for 2008 and no salary increases will be granted for 2009.
Laurent Levaux, CEO of Aviapartner: "The agreements reached serve as a good example of all stakeholders working together in the best interest of a company and its employees. It will preserve a large Belgian group active in many European airports.
Negotiations were successfully concluded thanks to the efforts and sacrifices made by all parties involved, including staff and union representatives, lenders, and shareholders. All parties concerned have reached balanced agreements that should permit Aviapartner to successfully face these challenging times."
Robert Van Goethem, Partner 3i Europe PLC Benelux: "Aviapartner, along with the whole European and global airline sector, is suffering from a severe downturn of its activities due to the current economic conditions.
The agreement reached with its lenders aims at providing the company with new financial means and at alleviating significantly the financial burden on the business. It serves as another demonstration of 3i's support to Aviapartner and its employees and as a testimony of 3i's desire to support the companies in which it invests."