By Jack Evans, chairman, NATA ASC
Aviation service companies are facing a potential crisis similar to what we faced prior to 9/11, but with a slightly different twist. As demands for greater security increase, there is increased pressure on the service companies to cut costs. Unlike then, these service companies now have a way of banding together to help fight this potentially dangerous trend.
Prior to 9/11, the air carriers contracted with private companies to provide passenger screening before boarding a flight. Many will remember that the private screening companies were under intense pressure to lower rates even as their costs were rising. Many may also remember that the news media did a couple of well-documented exposés of screeners who were thrown onto the job without training or instruction as local management tried to stay profitable. The great concern over passenger screening eventually led to the Transportation Security Agency (TSA) doing most screening.
The problem was that as pressure to reduce costs got more intense, cutting corners to save money became more attractive. The result was that in some cases training was reduced or even eliminated as local management tried to eke out a small profit to stay in business.
Now, the definition of security has changed for cargo transported on passenger and cargo aircraft. It’s no longer just a case of protecting against pilferage. The service companies have to guarantee that nothing inappropriate is allowed on an aircraft. As the requirements have increased, the cost of providing this security has sky-rocketed. The service companies are once again being forced to shoulder increasingly more of the expense, while at the same time being subject to growing pressure to cut costs. Does anyone see the potential for more news media exposés in the future if this continues?
Fortunately for the traveling public, the aviation side of the TSA has taken an atypically non-bureaucratic approach to implementing the congressionally mandated security requirements. The TSA has worked closely with the National Air Transportation Association’s (NATA) Airline Services Council (ASC) to implement these security mandates in ways that accomplished the objective without bankrupting businesses. It really has been an outstanding example of a government and business partnership working together.
Another reason for the success is that the ASC represents such a large part of the airline service sector. Currently, the ASC represents 23 domestic and international firms. These firms have a combined workforce in excess of 90,000 people and combined annual revenues of over $2.5 billion dollars. This combined workforce also represents 450 airports.
The larger the organization, the more impact we can have on legislation that involves the aviation business. Only by member companies staying involved, informed, and working together, can we hope to be heard as pressure in the middle continues to tighten.
As the new chairman of the ASC, I would like to stress that we really need your voice working with ours as we join together to prevent future 9/11s. Continued downward pressure on fees while expenses slowly continue to increase will only encourage local management to cut costs that could lead to more exposés or worse. For those who are members, we appreciate your participation. For those companies that haven’t joined, we could really use your support.
Future Initiatives
With that in mind, the ASC is now formulating its 2010 program. As we complete our agenda, we’re also trying to keep in mind the difficult economy. We know that if something doesn’t add value to an ongoing business, then it’s probably a candidate to get chopped. Therefore, we think we can add value to member service companies in three ways.
First, the ASC can band together with like-minded aviation sector organizations such as the Air Transport Association and Airports Council International to find common areas of interest and concern. Changes to security, regulations, or policies can have a dramatic impact on all three. We, therefore, hope to work together with these other groups to coordinate our efforts and concerns for the benefit of all.
Second, there are many legislative and regulatory changes taking place. Health care reform, the Employee Free Choice Act, and the FAA Reauthorization bill are but a few examples where changes could seriously impact the way airline service companies do business. While these changes will impact members and non-members alike, at least with membership we may be able to temper some of the outcome.
Finally, in 2010 the ASC plans to enhance our service offerings to member companies. Safety, always a major concern to NATA, is a topic that can always be improved upon through cross-communication and prevention. NATA developed the Safety 1st Management System and has gone online with it for easier access to member companies. We are also looking at what we can do to “go green” as more airports begin to place restrictions on equipment and airport operations.
The ASC is diligently looking for ways to ensure that this important sector of the aviation community is recognized by government and other entities. We are also seeking for ways to comment and influence proposed legislation and regulations. Please join today and help us influence the market of tomorrow.
About the AUTHOR: Jack Evans is chairman of NATA’s Airline Services Council and the CEO and cofounder of Total Airport Services, Inc. He has been in the aviation business for more than 35 years and is a former U.S Air Force Command Pilot.
