SATS and SingPost have signed a commercial agreement to integrate respective consignment operations under one roof, which will boost productivity by more than 30%.
The ground handler will set up SATS eCommerce airhub, a new 6,000 sqm facility at Changi Airfreight Terminal to enhance consignment handling capabilities, improve efficiency and space utilisation.
The airhub is expected to be operational by Dec ’16. Upon completion, the group will become the world’s first ground handler to possess such airside facility.
Under the agreement, SingPost will become the anchor customer as it will outsource its airport consignment operations to SATS after its lease at Changi Airmail Transit Centre 2 expires by the end of 2016.
The integration will enable single scanning, sorting, and removes the need to transport consignments between facilities, thereby enhancing efficiency in the form of shorter cycle and connection times.
SATS is currently trading at 19.4x forward P/E. The street has 4 Buy and 7 Hold ratings with a consensus TP of $3.57.
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