Dnata, the airport services unit of Emirates, has agreed to buy the remaining shares of its UK inflight catering joint venture Alpha LSG from the LSG Group as it expands its international portfolio.
The acquisition will make Dubai-based Dnata the only shareholder of the biggest inflight catering, on-board retail and logistics company in the UK, Dnata said in a statement on Monday. The transaction is subject to regulatory approval.
"We appreciate the strong partner we have had in LSG over the past seven years and are excited to build on our success and bring Alpha LSG’s employees into the dnata family," Robin Padgett, divisional senior vice president of Dnata, said.
Dnata has global capabilities in ground handling, catering and travel services, with operations spanning over 35 countries. In the first half of the fiscal year, Dnata's international operations accounted for over 72 per cent of its revenue, compared to 68 per cent during the same period last year. The unit took a 64 per cent hit to profits of Dh311 million as it recorded an impairment loss of Dh84m after its UK client Thomas Cook, the world's largest travel company, filed for bankruptcy in September.
The planned purchase of Alpha LSG follows Dnata’s increased investment in its catering portfolio this year, after opening new facilities in Houston, Boston, Los Angeles, San Francisco and Vancouver.
Alpha LSG was established in 2012 by the Dnata-owned Alpha Flight Group and LSG Sky Chefs, part of the Lufthansa Group. Each hold a 50 per cent share of the business.
The agreed share purchase has the "full support" of the LSG Group and Alpha LSG operations will "continue as usual", according to the statement.
Alpha LSG has revenue of over £290 million and employs 3,500 people across 15 airport catering facilities and two central production facilities in the UK. It produces over 30 million meals annually, serving more than 160,000 aircraft belonging to its 80 customers.
“This move will help to secure the continued growth of Alpha LSG and we look forward to a smooth transition while we continue our world-leading day-to-day operations,"Jochen Müller, chief operations officer of LSG Group, said.
