GAT Holds An Agile Stance

The industry, as is widely known, is in a state of contraction — large mergers the past few years have strained some third-party suppliers, spurring uncertain outlooks for business. The current market requires companies to examine their business models...


And when it comes to responding to a contract that demands starting operations at a new location, the company remains ready to respond. “We do have a footprint or map that we utilize on every station opening,” Howell says. “It roughly runs 35 days in length from the announcement of business to the implementation. Hiring, training, and badging to on-the-job training, etc., is all a part of that and is about a 35- to 40-day process.”

Within that strict timeframe is training for employees. “The training that is being provided by GAT and the airlines is roughly a 40-hour course, depending on the complexity of the operation,” Howell says. “Cargo requires additional training.”

He adds, “From our human resources, to operations, to the safety group to training, we are all meeting every week to find out what timelines have been met and to make sure that the start-up runs absolutely seamlessly. In Providence, we were notified on April 3, made announcements on the 5th, with a May 17 transition date.”

 

Equipment

And the other side, of course, associated with preparing a new station or taking on additional customers at an existing location — equipment. “We have a handful of vendors that we have the trust in and relationships with to go back and work with repeatedly,” Thiel says.

“When it comes to purchases, so much of it is predicated on delivery timelines,” he explains. “In most contract award situations, we’re given as little as 30 days, and on the high end, 60 days for transition time. We have to align ourselves with ground service equipment providers that can meet those aggressive delivery timelines. We aren’t necessarily tied to one vendor, but we do try to the best of our ability to keep our inventory consistent for maintenance purposes and so forth.”

On the maintenance side, regular meetings are scheduled to stay on top of fleet demands. “We hold a weekly equipment call with all our locations, in which case we are updated on completion of PMIs, any recurring issues with equipment and then, of course, we make decisions on the call to remedy the problem,” Thiel says. “Most of our activities are real-time. We don’t let a situation sit out there and become onerous.”

 

Risk Assessment

A start-up operation presents risk for a company that must make the investment in equipment and personnel. “We take a hard look at what our customer base is,” he says. “Each and every airline customer has a different level of expectations. We try to cover that in our contract reviews. If we end up spending a sizeable amount of capital to support a contract transition, it will be more desirable to have longer terms so we can cost recover the investment.”

Thiel adds, “Honestly, there are times that we have taken risk with shorter-term times, just because we feel like our service reputation, reliability and safety product is on the premier side of the industry, and that it would be very difficult to transition us out based on those deliverables. It’s more or less a risk/reward assessment we go through.”

And for existing contracts with airlines currently in the merger process, the company remains uncertain of their future. “It’s interesting,” Howell says. “We do have quite a bit of business with AirTran Airways in Atlanta. We’re uncertain about the future of those contracts. A large part of that is the union contracts with Southwest. There are really no vendor assignments, except for a few services.”

Its business with Continental is also unpredictable due to the merger with United. “We provide services with Continental contracts in five locations,” Howell says. “Some of that is up in the air, because of unions in the merger.”

The company is intent on remaining in step with changes in the industry, which happen almost daily, to remain competitive. “All the airlines are changing the business models from week to week,” Howell says. “We are constantly evolving based on customer needs and requests. Every operation is unique.”

On the subject of further growth, Thiel says the company will be careful in its expansion plans to remain nimble in the marketplace. “We’re posturing ourselves for progressive growth. We want to be strategic in our thought process,” Thiel says. “We definitely want to grow the company, but we want to be smart in the way we go about that.”

We Recommend