Airline services company gategroup has reported a 13.1% increase in revenues to CHF1,600.1m for the first half of 2016 as it prepares to take its place ‘as an autonomous company within HNA’s portfolio’.

The company reports that EBITDA grew from CHF29.8m last year to CHF77.9million (in constant currency) in the first six months of this year, with et profit attributable to its shareholders said to be CHF18.3m.

Gategoup also claims to have made ‘considerable progress’ in delivering on its Gateway 2020 strategy ‘ahead of expectations’, claiming significant increases in revenue and margins year over year, with continued cash flow generation improvements.

It also reports that the total value of its contract renewals in HY1 was in excess of CHF280m on an annual basis, with positive news on both the catering and travel retail sides, as well as other divisional news.

 

 

 

WIZZ AIR 7-YEAR EXTENSION…

The company reports that Wizz Air has now extended its contract by seven years beyond the original expiration date at the end of 2016, while gategroup also continues ‘as the preferred partner’ to manage the airline’s complete end-to-end retail programme – said to be worth around CHF40m a year.

Strategic contracts have also been renewed and additional business won with Middle Eastern carriers, including new startups for Qatar Airways in Boston and Atlanta. It is also catering and provisioning business for Emirates at Tokyo Narita and at Clark International Airport in Manila.
In terms of ‘commercial innovation’ gategroup points to a number of new innovative products and services. These include a diversified range of onboard trolleys allowing airline customers to feature well-known food and beverages inflight while its new onboard concept ‘Absolutely ONE’ is said to provide ‘restaurant-like dining’.

 

 

INFLIGHT SERVICE SYNERGIES IN SIGHT…

The company adds that the integration of Inflight Service Group (IFS) continues to progress, with functional areas as well as procurement and other protocols being unified under the combined leadership of the Retail on Board team. As such, it promises that the team will achieve the long-term cost synergies it initially estimated.

Besides other already reported acquisitions, gategroup also reports that it has acquired a controlling interest in the airline catering business of Service Group S.R.L in August 2016. This company now operates as Gate Gourmet Catering Bolivia S.A. at airports in Cochabamba, La Paz and Santa Cruz de la Sierra.

Additionally, gategroup has established its presence in Italy with central production in Malpensa and an assembly centre in Rome.

 

CHINA IS NOW CALLING…
As the company moves closer to becoming a fully-owned subsidiary of the HNA Group, its CEO Xavier Rossinyol was upbeat: “We have generated 13.1% growth in revenue at constant currency with an impressive 6.7% increase in organic revenue in the first half of the year, and a 161.4% EBITDA improvement at constant currency.

“Taking into consideration 2015 adjustments, the EBITDA margin improved from 4.9% to 6.4% from the second quarter 2015 to the second quarter 2016. Therefore, this is the fourth consecutive quarter that we have improved on all metrics since announcing our new strategy last year.

“With continued investment in innovation, culinary, retail and technology, we have further differentiated our service. Our people are designing and delivering more innovative products and service concepts, establishing new business partnerships, and growing our dynamic retail offering.

“It is clear we take pride in creating value for our customers. Thanks to the trust of our customers, gategroup has become the clear innovation leader in the industry. As a result, we have strengthened relationships with some of the leading airlines in the world, including Wizz Air, which has one of the most successful Retail on Board programs in the industry.”