Business News first on FIR:
ORLANDO, Fla.–()–While the coronavirus poses short-term risk to the global airline and airport industry, Autogrill’s North American airport division, HMSHost, faces broader long-term labor relations issues.
In its last quarterly earnings call, Autogrill S.p.A. (BIT:AGL), which is controlled by the Benetton family, noted that its global revenue growth was largely driven by airport performance in North America. A number of recent developments, however, may impact HMSHost.
In January, Starbucks announced it was ending its 25-year exclusive agreement with HMSHost. HMSHost must now compete with growing food and beverage concessionaires OTG and Paradies Lagardère who can also include Starbucks in their bids for airport contracts.
HMSHost also faces a growing risk of labor disruption at airports across the United States that could threaten its revenue and the revenue stream of its airport partners. UNITE HERE International Union affiliates represent approximately 68 percent of HMSHost’s estimated 18,500 workers in the United States at 33 airports. Over 1,200 non-union HMSHost workers are currently organizing to join UNITE HERE.
Labor relations are deteriorating overall for HMSHost. An ongoing labor dispute in Honolulu led to a three-day strike during the holiday travel season in December 2019. The company’s exposure to labor risk is expanding with collective bargaining agreements expired or expiring for thousands of workers in 11 airports in 2020. A divisive relationship with UNITE HERE poses a risk of strikes and political controversy.