Airport Execs Meet in Philly

The business of airlines, an onerous ARFF proposal, service opportunities top agenda

“There is a window that airports can absolutely capitalize on right now in looking at different ways to provide service, but I think that window is going to close. The airlines are under pressure, with costs being their primary concern.”

“They’re down to pilots, flight attendants, and airplanes; you have to have them; facilities ... you have to have them — kind of, sort of.

“With the technology changes that have occurred, they have started to open up their eyes; the airlines can’t afford any more ‘bricks and mortar.’ They don’t have a lot of things they can go back and look at in their cost structure, but handling is definitely one of them.”

DeCoster says that if airport operators are serious about getting into ground handling, whether its above wing, below wing, or services like deicing and scheduled services, “You have to recognize that the window to approach the carriers will probably be closing, because they will find a cheaper way to deliver the service; and once they lock into that cheaper way, with the cost pressures airlines are dealing with, you will probably not get them to move away from that cheaper way.”

“In talking with a lot of airlines, as I do on a regular basis, you find their average handling cost is somewhere between $400-700 per turn,” says DeCoster. “They have to find a different way to deliver that product. As you get into it, there are ways in getting some of these products down to the $250-300 range, depending on the distribution of airlines and flights.”

He says that providing ground handling allows airports to control their own destiny, and now is the time, with fuel costs rising again, and passenger revenues down, airlines are looking for non-traditional ways of doing things; and ground handling is definitely one of them.

“There are opportunities out there for public/private partnerships,” explains DeCoster. “By this I mean, the airline could supply the GSE, the airport could own or control the service, with various levels of revenue sharing. Not only can these relationships be made, I think it is key to its success.”

Bruce Carter, director of aviation at the Quad City (IL) International Airport, is also the chair of the Aviation Ground Services Association, an affiliate of AAAE. The association has 46 members from airports and companies that are showing interest in providing ground handling services, and see this as the future to maintaining and enhancing air service, says Carter.

“More and more airports are getting into this because they are watching what carriers like Allegiant and AirTran are doing with their service in going into smaller communities,” relates Carter.

Air Cargo Security
In 2007, President Bush approved legislation implementing recommendations from the 9/11 Commission, explains Edward Kelly, general manager for cargo, transportation sector network management for TSA. The legislation mandates 100 percent screening of cargo by August 2010. It also requires TSA to screen cargo transported on passenger aircraft and provide a level of security that is commensurate with checked baggage.

“Screening commensurate with baggage means that cargo has to be screened at the piece level,” says Kelly. “You can’t screen skids of cargo; you need to break them down and screen the individual pieces.”

According to Kelly, when looking at the supply chain for cargo, about 12 percent of all cargo moves on passenger planes. Currently, freight moving on passenger aircraft has to be from known shippers, and the majority of cargo generally goes through a freight forwarder, or indirect air carrier, and then is pushed to the airline, where the airline actually does the screening.
In the future, says Kelly, “We think we are going to change that model, and will introduce a certified cargo screening program, where a shipper can act as a screening facility. We also want to introduce ISFs, or independent screening facilities, which will probably be located in or around an airport.

“Chain of custody is key to this whole program. The idea behind that is once the freight is secure, we have to make sure there is a handoff of that secure freight along the supply chain-from the shipper to the forwarder, and forwarder to the airline, so we know the freight hasn’t been tampered with.

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