Qantas is getting rid of its remaining 2000 ground staff at Australian airports, handing responsibility for these services to operators including the huge Swiss company, Swissport.
Should we be worried by the fact that Swissport is owned by HNA, a formerly aggressive private Chinese company now controlled by state-owned banks and governments after it ran out of money and started selling assets?
One of the assets HNA couldn’t sell was a 19.9% stake in Virgin Australia, which collapsed earlier this year, wiping out HNA’s shareholding and those of other carriers such as Singapore Airlines.
Swissport is the world’s largest ground operations company. In November 2017 it bought Australian company Aerocare, at the time the main ground operator at Australian airports.
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The federal government (then led by Malcolm Turnbull) and its Foreign Investment Review Board approved the deal — even though Swissport was owned by HNA. Of course, back then tensions with China were not as nasty as they are now.
HNA paid US$2.8 billion for Swissport in 2015. The Chinese government-owned China Daily gushed about the deal at the time, confirming the support of the Chinese government.
Then chairman of Swissport Thomas Staehelin predicted a bright future for the company: “The ground service provider will continue to further strengthen its service offerings as well as global network under HNA’s ownership.”
But it hasn’t all gone to plan. In March this year, amid the COVID-19 pandemic, the Chinese provincial government in Hainan took control of HNA because the government had run out of money.
A couple of months later Reuters reported that hedge funds and other Western investors had been buying up Swissport’s debt to try to force HNA to sell the company to them on the cheap.
Normally this would seem to be an arm’s-length transaction, but given the recent actions of the Chinese government in directing privately owned Chinese companies in steel, alcohol, retailing, beer making and education to boycott Australia, or to actively undermine Australia’s commercial interests, can we be sure HNA will resist any hare-brained idea from the central government aimed at embarrassing Australia?
As we have seen in recent days and weeks, no one can reasonably assert that Chinese private companies do not respond to central government pressure or direction.
NOTE: This story has been updated to reflect that Swissport is one of a number of operators now handling Qantas’ ground operations. The full list of companies was not included in its original statement on the outsourcing.