Hello & Welcome to AIW 2005

March 1, 2005
A barometer of the good and bad in GS today

If you've been watching the news about the aviation industry for the past few months you might decide it's time to order a prescription for an anti-depressant.

"Discount Airlines Become Vulnerable" -- WSJ, "Skies Cloudy for Airlines" -- Chicago Tribune, "Airlines, Facing Cost Pressure, Outsource Crucial Safety Tasks" -- WSJ, "Bumpy Ride Expected for Airline Industry in 2005" -- CNN, "Airlines to Battle High Costs in 2005" -- AP ? Get the picture? Had enough? I have!

To directly quote Oliver Houri, president and general manager of Global Transportation at Unisys, "While the past several years have been daunting for the air transport industry around the world, we see many signs of growth and positive transformation occurring now and well into 2005."

It's been more than three years since we had to swallow the bitter pill of needing to restructure by focusing on cost reduction, prioritizing transformation projects, utilizing technologies to streamline operations and reinvesting in revised business strategies. Change is not easy. We knew it wouldn't be easy. There most likely will be fewer airlines when all is said and done, however, the industry is obviously not only here to stay but will continue to grow ? and flourish ? as reorganization takes hold.

Passenger travel is rebounding, cargo is way up and according to IATA, airline efforts to meet demand and reduce costs are paying off. Even more important, the ground support community, which is what I consider to be the foundation and backbone of the industry ? because without it the plane would never leave the ground, is on the threshold of its own transformation.

With airlines looking at anything and everything that can make them more cost efficient, contracting departments, now often run by supply chain managers looking for network discounts, are outsourcing much larger operations, including multi-city bids. In addition, the legacy carriers are continuing to hang on, so there has yet to be the liquidation similar to what occured several years ago when Eastern and Pan Am went bust, which at the time created a large surplus of GSE. And the pickins' are a bit slim in the used GSE market right now due to the fact that the airlines can't afford to replace their existing capital. Add to this the growth of the regional airlines and the start ups and you have the perfect recipe for the need to purchase new. So rather than just being an arm of the airlines and perhaps no longer the red-headed stepchild, GS and GSE are coming into their own, due to the need for airlines to restructure and outsource.

Another barometer for the GS industry and for GSM is Aviation Industry Expo. For the past two months leading up to the Show we have been receiving feedback from suppliers, manufacturers and readers such as this comment from George Prill's long-time friend and industry expert, "Sure sounds like the Vegas show will be big this year -- have yet to hear from anyone that is not going and no one is going alone so there should at least be a lot of tire kickers."

I have been looking forward to seeing all of you this year and to having the opportunity to spend more time with you, in person, at AIE 2005.

As always, thanks for reading!