Why global airline groups should take up ground-handling as next big thing

In aviation boardrooms and investor decks, most discussions still orbit around aircraft orders, fuel hedging, or network optimization. One of the most strategically overlooked sectors - ground handling - is quietly becoming a defining battleground for operational resilience, customer experience, and value creation.

The Covid pandemic exposed a critical vulnerability in global aviation’s ecosystem: the fragility of ground operations. From baggage chaos at Heathrow to delays at German and US airports, it became clear that efficient turnarounds, ramp services, and passenger handling are not peripheral - they are central to aviation’s performance. As travel rebounded, the strategic role of ground handling is being redefined, and the race for control is accelerating.

Ground handling is a $30 billion global industry, but it remains highly fragmented, operationally complex, and often low-margin. According to IATA, more than 1,000 independent handling firms operate globally, alongside vertically integrated airline and airport units. The top three global players - Swissport, Menzies Aviation, and dnata - account for less than 30% of global market share combined.

The post-pandemic recovery has exacerbated structural weaknesses: severe labor shortages, rising insurance premiums, outdated equipment, and patchy digitalization. In 2022 alone, mishandled baggage rates nearly doubled from 4.35 per thousand passengers to 7.6, with inadequate ramp staffing a major culprit. In markets like the US and UK, ground crew turnover routinely exceeds 40%, driven by low wages and harsh conditions.

A significant shift is underway. Airlines, which once saw ground handling as a cost center to be outsourced, are reconsidering their stance. Emirates Group has vertically integrated ground services through dnata, while Delta, through Delta Global Services (now Unifi), retains control over critical operations. Lufthansa and Turkish Airlines similarly maintain in-house subsidiaries for high-traffic airports.

Independent handlers are expanding into new geographies and verticals. Menzies Aviation, backed by Agility, has launched aggressive expansion in India, South Africa, and Latin America. dnata has secured recent contracts in Italy, Switzerland, Iraq, and the US, reflecting a strategy of scale and diversification.

Airports, too, are no longer passive landlords. They increasingly seek to shape ground handling markets - either by consolidating service providers, setting performance KPIs, or participating in joint ventures. Changi Airport Group in Singapore and Incheon Airport in Seoul have introduced stringent service-level agreements tied to aircraft turnaround efficiency, safety metrics, and passenger satisfaction.

Autonomous baggage tugs, AI-based rostering tools, and real-time ramp monitoring are no longer futuristic ideas - they are live pilots in major hubs. For instance, Menzies has begun deploying autonomous electric vehicles at several airports, while Swissport is piloting AI-powered dispatch optimization systems to reduce idle time and increase gate productivity.

Yet, digital maturity varies widely. BAA & Partners’ research suggests that fewer than 18% of ground handling firms have end-to-end visibility over operations, and only 12% use predictive analytics for workforce or asset planning. This digital lag presents an opportunity for early movers to define the next era of competitive advantage - not just in cost, but in service reliability and environmental compliance.

Sustainability is emerging as another pressure point. Airports and regulators are mandating the shift to electric ground support equipment (GSE), with Europe leading the charge. The EU’s ReFuelEU Aviation package and several national programs offer incentives or mandates for the electrification of tugs, belt loaders, and GPU units.

However, the upfront investment is significant. Fully electrifying a mid-sized station’s GSE fleet can require $3 million to $5 million in capital expenditure, a sum many smaller handlers cannot absorb without pricing pressure on contracts. This may lead to further industry consolidation, as capital-rich players acquire or outcompete underfunded rivals.

Ground handling is no longer a back-office concern, it’s a strategic lever. For airlines, it directly impacts on-time performance, brand perception, and labor risk. For airports, it’s a core determinant of capacity and customer satisfaction. For investors, it is a fragmented sector ripe for consolidation, digitization, and ESG-driven transformation.

The path forward will favor those who treat ground handling not as a procurement exercise, but as a strategic capability - integrated, data-driven, and future-ready.

In short, the next frontier of aviation competitiveness may not be in the skies, but on the tarmac