Ground handling rates in some European markets fell by as much as 67% between 2020 and 2025 — and that pricing bonanza for airlines is now at risk of reversing as the handler consolidation that produced it enters a new, more concentrated phase.

Olivier Bijaoui, consultant at OB Invest, told the Aviation Connect event in Athens that the cargo handling market has undergone two distinct waves of change since 2000, and the second wave could leave carriers with too few credible suppliers to tender against each other.

From fragmentation to networks

Between 2000 and 2020, many independent cargo handlers were acquired by larger players or exited the market altogether. The result was the emergence of handlers with multi-country networks — a structural shift that initially worked in airlines' favour.

Carriers could tender for multiple markets through a single company, simplifying procurement across their networks. At the same time, the large players competed aggressively for new contracts, driving prices down. Research cited at the event put the decline in handling rates in some European markets at up to 67% over the 2020-2025 period.

Competition for airline business became so intense that some handlers offered airlines a signing bonus for concluding a new contract — a striking indicator of where bargaining power sat.

The tide turns

The past six years, however, have brought mergers among the larger players themselves. That is gradually reducing the number of credible competitors for major tenders, and Bijaoui warned the consequence for airlines is straightforward: prices rise and service levels suffer.

He explained that consistent rate compression also makes it harder for smaller independent operators to remain credible rivals to the large international networks. If market exits and consolidation continue, competition for airline ground handling contracts will increasingly depend on a limited number of big multi-country players.

"What we are seeing is global networks taking more importance but there needs to be a response to this and an initiative because ultimately airlines will suffer whether they like it or not," Bijaoui said.

The procurement function itself, he argued, loses its leverage as the supplier base shrinks. "When you are an airline and you have less and less potential choice, then the power goes in the other direction and then the procurement [teams], as good as they are, will not succeed because they have no choice."

Commercial consequences

For airlines, the warning is direct. "Airlines have to be very careful about the fact that their choice is getting slimmer and slimmer, and it will have an impact on their price whether they like it or not," Bijaoui said.

The exposure is structural rather than cyclical. Airlines locked into consolidated handler networks for multi-market coverage face a market where the credible alternatives at each major hub are dwindling — precisely the conditions under which the 67% rate declines of the past five years become unsustainable.

For the handlers that remain, of course, the calculus inverts: fewer credible competitors means pricing power returning to the supply side of ground services for the first time in two decades.

Bijaoui framed his argument in explicitly pro-competition terms. "I am all for competition and all for bringing this industry the capacity to have the best possible service at the right price, but there is a moment where somebody has to react to what the situation is," he said.

He called on the industry to aim to preserve enough credible suppliers for competition to remain effective and sustainable over time — a stance that implies airlines, and potentially regulators, will need to act before the number of viable bidders for major handling contracts shrinks further.

If consolidation among the large networks continues at its recent pace, the handling rates airlines have enjoyed since 2020 look set to stabilise or climb.