Dubai’s dnata aims to double in size by the time it moves to new DWC terminal

Company is seeking opportunities for mergers and acquisitions across several business segments, including airport ground-handling, CEO says

Airport and travel services company dnata, part of Dubai’s Emirates Group, expects to double in size by the time it moves its full operations to the new passenger terminal at Al Maktoum International Airport (DWC), its group chief executive said.

The company aims to shift its entire operations to DWC as early as 2032, Steve Allen told The National on Tuesday.

The number of aircraft turns handled by dnata globally rose 9 per cent annually to 778,026 and its workforce increased 6 per cent to 48,900 people in the financial year ending March 31.

“By the time we get to the move into DWC in 2032-2034, you’re probably looking at a combined airport operation of 150 million to 160 million passengers between DWC and DXB. They’ve got to accommodate that volume from day one and so we will have operations that have ramped up over that period to be able to cope with those [aircraft] movements,” he said.

“So feasibly, dnata could be double the size by then in terms of the number of aircraft turns that we handle and the number of staff and quantity of equipment we need to handle that.”

Dnata, founded in 1959, handles a variety of aviation services. It currently offers ground handling and cargo services in 98 airports around the world. It also has a business division to handle in-flight catering and retail, while another unit sells travel services.

The company is currently seeking opportunities for mergers and acquisitions across several business segments, particularly for airport ground-handling, and in regions such as Latin America, the Middle East and the Far East, Mr Allen said.

“The greatest opportunities are in ground-handling and cargo-handling because the consolidation of that industry has been fairly limited. The largest global handlers cover about 35 per cent of the total business, so there’s plenty of potential for consolidation and expansion of that business,” he said.

There are “huge growth market opportunities” in South America, where dnata already operates in Brazil. It is also exploring opportunities in Chile and Colombia, he added. There is also “plenty of potential” in the Far East, where dnata has operations in Singapore and the Philippines.

In Saudi Arabia, where dnata offers travel services, the company is seeking opportunities in ground-handling and catering as the kingdom aims to grow its aviation and tourism sector.

Dnata is bidding for contracts with airlines in the kingdom, Mr Allen said.

In its travel division, which includes Arabian Adventures, Destination Asia and Imagine Cruising, “we’re actually looking at the organic expansion of our products from Dubai to the rest of the Middle East … rather than going through any sort of acquisition”, he said.

Dnata’s airport operations account for 46 per cent of its global revenue, while catering and retail contributes 34 per cent and travel represents an 18 per cent share, according to a presentation by Mr Allen on Tuesday.

Bigger investments

The company invested Dh464 million ($126 million) in the 2023-2024 financial year and plans to exceed that level in the current financial year, in areas including equipment, infrastructure and technology.

“We will be stepping up on that. We’re looking for some significant investments in ground services equipment,” Mr Allen said, with the focus on acquiring electric and hybrid equipment as part of the company’s sustainability strategy.

It won a seven-year ground handling licence in October to operate at Fiumicino Airport in Rome. To support that new business, the company will invest more than €20 million ($21.6 million) to purchase new ground support equipment, including advanced electric vehicles.

Dnata is also set to open a new cargo facility in Amsterdam in July 2025, which is to become the single largest cargo operation in its network, with an investment of €40 million, Mr Allen said.

The opening of a new cargo facility in Erbil, in Iraq’s northern Kurdish region, is also “imminent”, he said.

“We will be significantly ramping up our investments this year based on the strong year we’ve just had,” he added.

Dnata’s profit quadrupled to Dh1.4 billion amid growth across its business divisions, while its revenue rose by 29 per cent to a record Dh19.2 billion in its fiscal year that ended in March.

Having won more than 120 contracts across its business segments in the past financial year, the company expects to exceed those levels in the current year, Mr Allen said. “We definitely feel like we’re in a strong position to gain market share, which means that we should win certainly more contracts than we lose,”he said.

Source: thenationalnews

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