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Trains and buses group Go-Ahead has finally wrung the neck of the turkey in its group portfolio, its terminally loss-making airports handling business.
Go-Ahead is best known for making large amounts of money and paying attractive dividends from running the highly subsidised London General and London Central bus companies in the capital. It also operates the lucrative commuter train franchises Southeastern and Southern Railways, and London Midland into Euston.
However, group profits have for years been held back by its ground handling and cargo operations at Heathrow, Gatwick and Stansted and a host of other UK airports
In recent years it has been forced into tens of millions of pounds of writedowns of a notoriously low-margin business which is regularly buffeted by the vagaries of airline finances and the super cyclicality of the air travel business.
Today the businesses were sold to Dnata, the Dubai-based international airport ground handling group, and its French rival Servisair.
Go-Ahead chief executive Keith Ludeman, who has been trying to get rid of the businesses since taking over three years ago, said: “We are pleased to be selling these operations.” Dnata is paying £15 million and Servisair a nominal sum. That cash inflow, however, will be wiped out by residual liabilities and ongoing future losses at the businesses.
The businesses are carried in Go-Ahead's books at £20 million, meaning the group's next accounts will have to take a £20 million write-off.
