Alpha's appreciation of the needs of international business comes not simply through talking to our partners, but also through our own global network. Our people are as talented at making travel special around the world as they are in the U.K.
Alpha's success extends much further than our core business in the U.K. With Duty Free stores as far afield as Florida and the Maldives, a network of flight kitchens in four continents, a strategic partner in Singapore, a distributor in Nepal, and retail bar and restaurant outlets in Stockholm and Jersey, we're as international as our many global partners.
With such a variety of audiences and cultures to serve, Alpha's inherent flexibility is a critical strength of the brand. Every inflight menu or airport retail concept is carefully tailored to its particular market, making the very most of local opportunities to maximise profit for our airport and airline partners.
Wherever your business is focused, Alpha's international expertise can make a difference to your business.
Alpha Airports Group PLC is an England-based supplier of support services for airlines and airports. The Flight Services division prepares in-flight meals, offers security and other services such as equipment management, and handles in-flight retail. The Retail side operates airport concessions such as restaurants, newsstands, and duty-free stores. Alpha Flight Services, which accounted for more than half of turnover and two-thirds of employees, operates at more than 60 airports in Europe, the Middle East, Australia, and the United States; Alpha Retail is active in about two dozen airports.
Floated in 1994
The Forte Group's airport services division was spun off as Alpha Airports Group PLC in a successful February 1994 initial public offering (IPO). Shares began trading at 140p. Alpha's market capitalization was £211 million and its annual revenues were about £423 million, split evenly between flight catering and the less lucrative airport retail operations.
Forte had originally launched its airport services unit in 1955. In 1970 it merged with another large hotels group, Trust Houses Ltd., which had begun to provide its own catering service at airports; a majority owned joint venture, John Gardner (London) Limited, owned Gardner Merchant Caterers Limited, one of Europe's leading contract caterers.
Alpha's predecessors began serving European airports, as well as institutions, in the 1970s and 1980s. An operation was set up at Paris's Orly Airport in 1971, followed the next year by another at Schiphol in Amsterdam. A base at New York's JFK International was acquired in 1985.
By the mid-1990s, it accounted for nearly half the meals served on planes departing British airports. It also had operations at four sites in Continental Europe and in New York City. Altogether, Forte Airport Services was making 45 million meals a year. An equally large business was the network of duty-free stores. Overall, Forte Airport Services had 6,000 employees.
Forte had amassed a £1 billion debt along with its diversified holdings. A plan to sell Airport Services and contract caterer Gardner Merchant to the Compass Group in 1992 was called off as Forte Chairman Rocco Forte thought the offer of £530 million for the pair was too low. Three-quarters of Gardner Merchant was sold instead to management for £400 million, and Alpha was spun off.
The newly independent Alpha was quick to invest in far-flung flight catering operations in a bid to obtain global reach. It soon acquired a 49 percent holding in Australia's leading independent flight caterer, Connat Flight Services Pty. Ltd., for AUD 7.5 million (£3.6 million) in June 1994; this was raised to an 85 percent holding within a couple of years. It also bought a pair of small Florida flight kitchens owned by Jerry's, and set up the Allied Caterers joint venture in Trinidad. Alpha divested its flight caterer in Portugal, acquired several years earlier, after that country's national airline formed its own catering unit.
Reston, Virginia-based ground handler DynAir Services was acquired from defense services specialist DynCorp for $122 million (£79 million) in September 1995. DynAir operated at 52 locations in the United States, and was beginning to operate as far abroad as Russia. It had sales of $131 million a year. According to The Times, Alpha had been courting DynAir for three years.
Forte had retained a 25 percent stake in Alpha after the IPO. It was later acquired by the Granada group, and in November 1996 Harrods owner Mohamed Al Fayed bought the holding in Alpha from Granada for £52 million. Fayed also owned a chain of ten airport stores called Signature.
Alpha's loss-making U.S. catering operations were sold off in 1996 for £6.8 million. Alpha acquired a 60 percent holding in Sri Lanka's Orient Lanka duty-free store for $18 million.
Reconfiguring in the Late 1990s
Alpha had about 12,000 employees in the late 1990s. One new hire was Kevin Abbott, a former board director at Rexham, who took over from the original chief executive, Paul Harrison, in October 1997 after Harrison left to join the Standard Chartered bank.
Sales for fiscal 1998 were £702 million. Its retail division had more than 100 outlets, most of them in the United Kingdom, operating under names including The Beauty Centre, Glorious Britain, and A Taste of Ulster. It suffered a loss of business, however, after the British Airport Authority established its own World Duty Free chain.
The company, with a £73 million debt, lacked the capital to develop its three divisions: retail, flight services, and ground handling. Expecting to raise £70 million, Alpha did put its duty-free stores on the block in February 1998, but canceled the sale several months later after failing to find a suitable buyer in the midst of the Asian financial crisis. It was able to finance growth, however, through a new £100 million credit line.
In June 1999, Alpha bought the Gatwick flight kitchen of British Airways for £14 million. At the same time, it obtained a ten-year contract to supply British Airways with in-flight meals at Gatwick and eight regional British airports. Alpha Catering Services was then supplying more than 12 million meals a year to British Airways via 95,000 flights a day.
Alpha's U.S. ground handling business, Dynair, was sold to SAirGroup's Swissport International for $155 million (£100 million) in August 1999. By this time, Dynair was active at 57 airports in the United States, Italy, and Russia. The fragmented ground handling business was beginning to consolidate as local monopolies in Europe were opened to competition.
Revenues fell about 20 percent to £515 million in 1999-2000, in large part due to the elimination of duty-free sales within the European Union. Nevertheless, pretax profits rose £3.6 million to £19.3 million. Alpha was countering the loss of duty-free business by developing branded retail outlets. During the fiscal year, Harrods sold its 27 percent interest to Servair, Air France's catering unit.
New Horizons After 2000
While no frills budget airlines such as easyJet grew in popularity, Alpha developed café-style offerings to feed their passengers. In 2000 the company was working to provide passengers the opportunity to order meals online at the same time they bought their tickets. Alpha also teamed with Virgin Express Tax Free Shop in the spring of 2001 to improve the food and retail offered onboard the Virgin Express airline.
Alpha acquired a 51 percent holding in Royal Jordanian's catering unit for £8.8 million ($12.6 million) in the summer of 2001. This was an important strategic move into a fast-growing aviation market. "We will make Alpha Jordan a showcase for our international customers and thus aim to become the undisputed flight caterer of choice in future privatizations in this developing Middle East region," said Alpha CEO Kevin Abbot.
The company's flight catering business fell off temporarily in the industrywide aviation slowdown following the September 11, 2001 terrorist attacks on the United States, resulting in layoffs of more than 900 workers. In-flight and duty-free sales, however, were rising.
Alpha was expanding in Continental Europe and niche international markets in Australia, the Middle East, and India. It sold off a stake in Inflight Sales Group in 2002, relinquishing the North American in-flight catering business.
Alpha doubled the capacity of its flight kitchen in Cardiff to 10,000 meals a day. Alpha also had been updating its airport retail concept, and was benefiting from increasing traffic at Britain's regional airports. The logistics and IT infrastructure also was being upgraded.
In 2004 Alpha benefited from a pick-up in long haul air travel following the end of the Iraq war, particularly at its Jordan base. Alpha acquired a 60 percent holding in Istanbul Duty Free in November 2004. Turkey's tourism traffic was booming. Alpha was also boosting its stake in its Italian affiliate, Servair AirChef S.R.L.
Turnover for the fiscal year ended January 2005 (not including joint ventures) was £487.8 million, up 11 percent from the previous year. Pretax profit was down a third to £11.7 million; the deadly South Asia tsunami of December 2004 had some impact on the company's duty-free trade. Alpha then had about 5,500 employees.
The company was expanding into Eastern Europe via the spring 2005 acquisition of a majority stake in Romania's Abela Rocas S.A. for £3.4 million (EUR 5 million). Abela Rocas had been founded in 1993 by the Albert Abela group and had annual revenues of 281 billion. It catered up to 5,000 airline passengers a day and had operated airport foodservice.
While it was expanding its geographic horizons, Alpha also was venturing into new concepts in airline food. Its "Blue Sky" meals promised to streamline the aerial dining experience by offering meals on disposable mats rather than the traditional tray. This simplified cleanup for the flight attendants and allowed passengers to leave their seats without having to wait for their trays to be collected.
In October 2005, longtime client Thomsonfly replaced Alpha with rival LSG Sky Chefs. Alpha had been supplying meals to Thomsonfly, formerly Britannia Airways, for three decades.
Abela Rocas S.A. (Romania; 64.1%); Alpha Airport Holdings B.V. (Netherlands); Alpha Airport Holdings (UK) Limited; Alpha Airport Services Inc. (U.S.A.); Alpha Airports Group (Jersey) Limited; Alpha Airport Catering (Ireland) Limited; Alpha Catering Services Limited; Alpha Flight Services B.V. (Netherlands); Alpha Flight Services Ireland Limited; Alpha Flight Services Overseas Limited (Jersey; 80.4%); Alpha Flight Services Pty. Limited (Australia); Alpha Keys Orlando Retail Associates LLP (U.S.A.; 85%); Alpha MVKB Maldives Pvt Limited (60%); Alpha Overseas Holdings Limited; Alpha Retail Catering Sweden AB; Istanbul Duty Free Ic ve Dis Ticaret A.S. (Turkey; 60%); Jordan Flight Catering Company Limited (Jordan; 41%); Orient Lanka Limited (Sri Lanka).
Flight Services; Retail.
Compass Group; DFS Group; Gate Gourmet; LSG Sky Chefs; Sodexho Ltd.