Emirates Says Interested In Buying Lufthansa Catering Business

Dubai-based airline operator Emirates’ ground services unit Dnata is “very interested” in acquiring the world’s largest in-flight catering business from Lufthansa, if it is put up for sale again, Dnata’s president said on Tuesday.

Lufthansa, Europe’s largest airline by revenue, had put LSG Sky Chefs up for sale in 2012 but then abandoned the plans.

“They have said they are not ready to sell,” Gary Chapman, told reporter on the sidelines of a conference in Dubai.

“But there’s a change in the leadership at Lufthansa and maybe that would change the approach.”

Carsten Spohr took over as chairman and chief executive at Lufthansa at the beginning of May, stepping up from heading the passenger airlines division to lead the battle against low-cost carriers and fast-growing Gulf airlines.

“Lufthansa has major social issues in Germany, which needs to be addressed. If everything fits well, we are definitely still very interested (in acquiring the company),” Chapman said.

Lufthansa, which reported a narrower first-quarter loss last week said on Tuesday that it would transfer some 1,500 ground staff at German airports into separate companies this year as part of its cost-cutting campaign.

Globally, airline companies been looking to shed their catering business to focus on boosting margins. Franco-Dutch carrier Air France-KLM was also reported to be considering the sale of its entire Servair catering unit.

Dnata, which is part of the Emirates Group that also includes the Emirates airline, reported a 14 per cent increase in its profit for 2013.

The unit has been expanding organically and through acquisitions, and bought Air Chefs in Italy by taking over the remaining 50 per cent stake from Servair last year.

It acquired Broadlex, an aircraft cleaning service provider in Australia, and Gold Medal Travel Group, a distributor of long-haul travel products in the UK.

“We have Dhs2.4 billion ($653 million) of cash available this year. So that’s a nice little war chest to make use of and we have the support of our chairman to reinvest,” Chapman said.

Dnata now employs 23,000 staff in 38 countries and has ground handling businesses in 19 airports around the world including the UAE, Singapore, Australia, the United Kingdom and others.