Source: South Europe Ground Services

South (South Europe Ground Services S.L.U.), the new handling subsidiary of the IAG Group, will operate in 38 Spanish airports with a workforce of 8,700 employees (8,200 from Iberia Airport Services) and will provide services to more than 100 companies in the aforementioned airports, with Madrid being the airport with the largest concentration (50). In addition, it will provide services to third parties at 30 of these airports and will provide autohandling services at eight of them. With all this, it expects to serve more than 400,000 weighted aircraft and to grow at a rate of between 2 and 4% per year, in line with the average figure for the sector.

The company, which was registered at the Madrid Commercial Registry on 19 February, will provide ramp and passenger handling services to the Spanish companies of the IAG Group (Iberia, Iberia Express, Vueling and Level) at all national airports and passenger handling services to British Airways, Air Nostrum and Aer Lingus; as well as services to third party companies at the airports where Iberia Airport Services obtained a licence in the last Aena tender. The public deed of segregation of Iberia’s handling activity in favour of South was formalised today, having been deposited at the Mercantile Registry, complying with the necessary legal formalities for the transfer of the independent economic unit that brings together the handling activity and which includes all its employees.

South is born after the agreement reached between Iberia and the trade unions last February and does so as a strong, solvent and independent company whose value proposition is leveraged on the knowledge and experience accumulated in the past years of operation by Iberia’s Airport Management and whose objective is to guarantee a sustainable and competitive future for the handling business and its 8,700 workers.

The workforce integrated in the new operation is mainly concentrated in the hubs of Madrid – where more than 3,500 people operate – and Barcelona, with more than 1,500, which between them represents 60% of the total. The rest of the workers are divided proportionally to the volume of service between the remaining 36 airports.

South is the leading handling company in Spain in terms of turnover and is among the top 10 companies in the world, which makes it one of the main players in the sector, bearing in mind that its operations are based, for the time being, only in Spain. It was created with the aim of becoming the leader in southern Europe and to this end it has a viability plan aimed at protecting employees, optimising processes and improving efficiency in order to consolidate the business and generate value for its current and future customers. South expects to grow by 17% in volume of flights served by 2030.

Three phases of the 2024-2030 strategic plan

Phase I: Business consolidation

The company begins its activity with maximum enthusiasm and offering a service with the same conditions of quality, safety and competence that it has been providing until now.

During the first year South expects to maintain the business figures of 2023 and organically increase its presence in those airports where it is possible to grow. Looking ahead to 2025, the objective is to strengthen its value proposition by improving its technical and sustainability competencies, for which additional investments are planned. Part of these proposals are a stability and professional training plan for its employees (Operational Excellence Centre in La Muñoza) and the electrification of its fleet.

At the same time, it will launch a voluntary redundancy programme (ERE) that will affect up to 1,727 people through voluntary redundancies and voluntary early retirements, which will be in force until 31 December 2026. The new company, according to Miguel Ángel Gimeno, CEO of South, will not cut its workforce, but will renew it. “Workers who leave during this period will voluntarily take advantage of the redundancy measures agreed with the unions and will be replaced as the company grows,” he says.

Phase II: Optimisation

In the coming months South will consolidate its workforce by providing its employees with the security agreed in the previous agreements with the unions, and will consolidate its position as a market leader with the aim of generating value for both its customers and the rest of its stakeholders.

Phase III: Growth

South has a firm vocation to grow in Spain in the short term, with Madrid as the main focus, and in southern Europe in the second half of the year.

In Gimeno’s words “our leadership position, together with a professional team of more than 8,000 employees and the experience we have accumulated, makes us believe that we are going to write a page of success in the global handling business in the coming years”.