Backed by a strong parent, ACCIONA’s activity in Airport Services is in growth mode, with an emphasis on partnership and collaboration. Victor Carballo discussed the strategy with Mark Pilling.
“We like difficult projects,” Victor Carballo, Managing Director of Airport Services for ACCIONA, told ARGS.
He was explaining how ACCIONA seeks to differentiate itself from others in the ground services industry by taking on work that others might avoid.
The project in question was a major milestone for the company in early 2023 when it won the contract to provide ramp services for the Lufthansa Group, including its low-cost subsidiary Eurowings, at Düsseldorf airport in Germany.
The tough part was starting up a major operation from scratch to serve Lufthansa Group at one of its main hubs within weeks. “From winning the contract we had to find and train people and locate new ground support equipment in just two to three months in what was a difficult market,” said Carballo.
The ramp-up involved hiring nearly 300 workers for a contract that sees ACCIONA serving over 55,000 flights a year at Düsseldorf. “It is a good example of how we can partner with customers to find a good outcome for both parties,” he said.
Although ACCIONA’s activity in Airport Services has been providing ground services for 30 years in several markets, with a focus on Europe and Latin America, outside of these locations it has kept a low profile.
That is changing. “Our story is clear – we intend to grow,” stated Carballo.
Carballo, and interview partner Angel Arrue Martinez, who joined ACCIONA as commercial director in early 2024 after a long career in the ground services industry including spells at Swissport, gategroup and Flightcare, point to the size and stability of parent ACCIONA as a significant asset.
While still a family-owned group, Madrid-headquartered ACCIONA is a global force that “develops and manages sustainable infrastructure solutions, especially in renewable energy”. Its business spans the entire value chain, from design and construction through to operation and maintenance.
ACCIONA has a presence in over 40 countries, 55,000 employees and had sales of €17.02 billion (US$18.5 billion) in 2023. “We have the back-up of a parent that wants to gain greater prominence in the ground services industry,” said Carballo.
But having a strong parent does not mean a headstrong rush to grow at any cost. “We want to grow step-by-step and be sure of the steps we are taking,” he explained. “We only want to be in the market where we can give something different, where we can add value.
When does ACCIONA step in? “We usually start with a customer when they have a lack of quality with other providers, when they have a problem, and they need an alternative supplier. Or when they have a big volume at their hub and they cannot fail,” said Carballo.
The example of ACCIONA working with Lufthansa at Düsseldorf is a good illustration of this approach in action, where the operator wanted a reliable, long-term partner for a key hub.
Another example is its role as the ground services provider for start-up low-cost carrier arajet at its main hub in the Dominican Republic.
“We have been working with arajet from the beginning, supporting them in the launch phase and partnering with them to provide ground services at Santo Domingo Airport from September 2022,” said Carballo. “They needed something different [from a ground services partner], which we provided, and we continue growing with them.”
Growth trajectory
ACCIONA’s Airport business line is tiny in comparison with the mother ship, with annual revenues of €150 million ($161 million) in 2023. It has some 3,000 employees in eight different countries and at 20 different airports, handling 200,000 flights a year and providing services from ramp to passengers with reduced mobility and de-icing.
One of its largest operations is at Santiago de Chile International Airport, where it serves home base carrier LATAM Airlines as well as a host of other carriers.
The Airports unit has been tasked by the parent company to begin expanding again in the post-pandemic world, with a target to boost revenues to €200 million ($213 million) this year alone.
ACCIONA’s drive to boost its airport work began about 10 years ago. “We started looking for opportunities to expand where the mother company already has activities. ACCIONA’s presence in Chile is why we began ground services in Chile, and we are now the main handler in the country,” said Carballo. The business also has activities in Mexico, Portugal, Oman, and Qatar.
“Now is a good moment to expand,” said Carballo, as passenger and flight numbers recover to post-pandemic growth rates.
Carballo and his management team believe they have some significant advantages and differences that will enable their growth ambitions. Firstly, they note that ACCIONA is one of the few ground services players that is not owned by its founders or an investment company.
“We want to highlight that we are very stable, with the back-up of a company like ACCIONA and a clear roadmap to grow,” said Arrue Martinez.
“This is really important for our people because our role as a service provider is thanks to them and we need to give them stability with a company that has a strong mission for the future,” added Carballo.
“We think that in this regard we are in some way different, and we can offer something different compared to the [other ground service companies],” he stated. “This is something that airlines and their customers will need because the market is changing. The labour situation is changing, and the needs of the handling market are changing.”
Long-term strategy
But the view of all CEOs across the main service providers is that they offer something different. So what really sets ACCIONA apart?
“I think it is the long-term nature of our plans,” answered Carballo. “We have the back-up of a company that doesn’t want to get their money today or tomorrow; they have a different strategy, and they see the airport business as part of its portfolio of businesses.”
ACCIONA demands growth, but not at any cost or to propel itself to match the likes of Swissport or Menzies in terms of size. Carballo acknowledges the need for a network and certain business volumes to create economies of scale, but of more importance is the service provided.
“What is vital for us is to establish relationships and partnerships with customers and give them the stability they need,” he explained.
To enable its growth ambitions, ACCIONA is building up its management team. In addition, Carballo’s team is using the wide reach of ACCIONA’s country managers to identify and help analyse opportunities.
The preference is to grow organically, either alongside customers or through obtaining a handling licence. “But we are also open to specific M&A [merger and acquisition] opportunities to maybe speed up the process where possible, and we are already working on some of them,” said Carballo.
This does not mean buying one of the mega-handlers or having to achieve a certain size in a specific timeline. “We are talking about strategic and tactical acquisitions,” said Carballo. “When you have the strategy just to grow, usually the service quality is affected or you are not taking care of the operation.”
And the marketplace appears ripe for M&A, particularly if some owners or investors do not want to commit funds currently. “This is a time when both airlines and handlers need to invest money [in their product and customer service],” said Carballo. “It is also a time when handlers need to invest in new ground support equipment as they seek to transition their service to be more sustainable.”
Target regions
In terms of target geographies, ACCIONA is focused on Latin America, where it has already had success and where the mother company too has a big presence. Central Europe will also be a target, said Arrue Martinez. “We have good experience of the German market, which in a way is quite complex.”
ACCIONA also sees opportunities in Africa. “All of these regions are part of the pipeline we are dealing with today, but we are open to check everything,” said Arrue Martinez.
As it eyes growth, ACCIONA is laser-focused on ensuring its customers and employees benefit from the latest technology and innovation it can deliver.
“We need to support them with the right technology because we are in a situation where the labour market in Europe, and around the world, is difficult and it is not so attractive for people to work at airports. We need to give them the tools and the motivation,” said Carballo.
Consultancy approach
An interesting business line that ACCIONA is developing is ground operations consultancy. This activity arose when ACCIONA worked with Barcelona-based Volotea last year, helping the European carrier figure out its best approach to managing its ground services operation.
Acciona examined self-handling and third-party handling options for Volotea and supported the airline in adopting the best solution at different airports, said Carballo. This included training support, the selection of IT tools, infrastructure and ground equipment.
“We are in contact with other airlines to do the same thing. It is another example of our partnership approach, and it can open other opportunities,” he said.
