Strength in Depth

German manufacturers, often considered the cream of the crop in Europe, have responded with characteristic alacrity to the global downturn, writes Richard Rowe

Germany's ground support expertise has never been in question and the scope and breadth of the country's manufacturers makes it one of Europe's most potent exporters of industry solutions. In terms of capabilities, Europe's ground support powerhouse has enviable strength in depth, from small organisations with expertise in very specific items of GSE to a handful of companies with the resources to tackle major turnkey airport infrastructure projects around the world.

Although the domestic market is considered comparatively large within the splintered context of Europe, it is rarely enough, however, to sustain a growing business. As such, most German manufacturers have long learnt not to differentiate between national and international opportunities.

"The German market is good because it requires high standards and end users ask for the very latest technology," explains Bernhard Mudler, Head of Department/Sales, Aircraft Refuelling at Esterer. "But the market is too small and so the international market is a must."

But while looking beyond Germany's own borders is important, taking advantage of the 'Made in Germany' stamp is also a canny marketing move. "The German market is indeed small, but it remains very important for us and the development of our products," explains a spokesperson for belt curve manufacturer, Transnorm System. "If we meet the highest levels of quality required in Germany, then we are sure that we will not have any problem in our important export market."

As with many of the larger European countries and regions - notably the UK, France, Italy and Scandinavia - the national industry is galvanised by an industry body, in this case, the German Airport Technology and Equipment Association (GATE).

Led by long-time President, Dieter Heinz, GATE has worked hard to create a platform for its many members across the industry and has become a regular fixture at international trade shows.

Heinz has seen German manufacturers span the globe, but admits that this is as tough a time as he can remember. "All of our member companies have experienced different results because of what has happened to the industry in general," he admits.

Diverse customers
In recent times, GSE manufacturers in the US have discovered just how much it pays to develop a diversified customer base and the same applies in Germany. Some have little choice. Take refuelling vehicle specialist, Esterer, for example. Recognising the limited size of the market, Esterer has always tended to deal with a variety of customers on both the civil and military sides of the fence.

"Consequently," says Mudler, "there is always something to do."

For now, the situation is relatively rosy for Esterer, reports Mudler. Order books are full and the company has just enjoyed one of the best years in its near 50-year history. Much of this is due to a large contract with Shell, which gained the company access to the Scandinavian market for the first time.

"During the last years the 'global purchasing strategy' of the major oil companies has brought a big change. If you have such a contract, it is fine, but if you fail, you have nothing," he warns.

Others have enjoyed similar success despite the appalling economic conditions afflicting the industry. "Of course, the crisis in the Middle East and the SARS epidemic in Asia affected the whole airline business," reports Stefan Frech, Director, Sales and Marketing at Rofan. "But business over the last year has not been bad." In fact, Rofan, which manufactures trucks and tow tractors for baggage/cargo handling and pushback applications, enjoyed a particularly healthy 2002 with a number of solid orders placed by customers. "This helped us a lot in early 2003," admits Frech. Like his counterparts at Esterer, Frech has sought to make the most of a diversified customer base to counterbalance the inevitable drop in commercial aviation business. "We provide trucks and tractors for industrial applications as well as for the airport industry, so we have concentrated more on the industrial clients," he says. "The past has shown us how dangerous it is to depend on a single market." Overall, the customer's approach to investment has changed, something that a large turnkey project specialist such as Siemens Airports knows all about. As a supplier of electromechanical equipment and solutions, such as those used in baggage handling systems, Siemens Airports says its main role is to increase the efficiency of an overall airport. The company reports that while the situation over the last year has not fundamentally changed the investment plans of its potential customers, it has certainly caused them to reconsider or postpone their plans overall. Understandably, market uncertainty and lower passenger numbers the world over has seen airports review any new investments carefully. More time is now taken to make a decision, particularly on sizeable projects. Often, manufacturers just have to sit tight and be patient. That said, Siemens Airports, and its various business divisions, have not exactly been short of work. One, Siemens Dematic, recently completed the baggage handling system at Munich Airport's new second terminal, while the company is also involved in long-term expansion projects as far afield as Dubai Airport (terminal expansion), Abu Dhabi (new terminal) and Korea (phase two of Incheon International). Overall, as Siemens Airports points out, it is perhaps security issues that now drive the majority of investment at airports. Certainly, organisations such as Transnorm have enjoyed indirect gains from the additional focus now placed on security at the world's airports. For new screening systems to work automatically, they usually need belt curves. This means that in addition to enjoying a roaring trade in its core product, Transnorm also reports great interest in its vertical sorting module, known as Smartsort, which is often used inline after the screening machine. "Our order intake based on [the need for] 100 percent screening has been significant over the past 12 months," says the company.

Life-cycle costs As customers change, so too must suppliers. According to Transnorm, when it comes to complex items such as baggage handling systems, suppliers now need to be global players to meet the needs of an increasingly global market. GSE manufacturers repeat the same mantra. What is clear is that innovation is required: systems are faster, the environmental requirements are more stringent (low noise, less energy consumption), and the cost approach has evolved. But as long as customers are able to pay, the renowned German passion for quality should stand many manufacturers in good stead. After all, there is now a much stronger focus on integrated systems and life-cycle costs. "Advanced products that are environmentally-friendly and with low operational costs have a good chance [to succeed]," is how one GSE manufacturer puts it. "Price is very important, but consultation, after sales service and system competence is still essential," adds Rofan's Frech. "Availability is also very important today. Certainly doing the same [handling] job with less equipment and manpower requires high quality products and excellent service." Others have continued down the life-cycle cost route, but also attempted to enter new markets and different industry sectors - an approach that has served the Airport Systems division of Inform well. Recently, the specialist software company has taken its well-known GroundStar suite of products into new markets such as Mexico and Russia. In May, Inform signed a contract to implement a variety of GroundStar systems at the 13 airports managed by Grupo Aeroportuario Centro Norte in Central-Northern Mexico. This includes airports at Culiacan, Mazatlan, Acapulco, Chihuahua and Monterrey, where the contract includes installations of modules for the administration of airport facilities, service contracts, and invoicing, as well as allocation of airport resources such as gates, stands and baggage belts. Earlier in the year, East Line Handling (ELH) brought Inform onboard to improve its ground handling operation at Moscow Domodedovo. In an initial pilot phase, four GroundStar modules - PlanControl, RosterControl, RealTimeControl and ComControl - will be implemented within ELH's passenger transportation department to coordinate passenger and crew bus operations. But while it has enjoyed some successes, Inform has not been immune to projects either being delayed or put on hold indefinitely. "We recognise that the customer takes longer to make decisions," admits Thomas Schmidt, Director, Airport Systems, Inform. "That is why it has been such a big help having several new markets come on stream." In addition, Schmidt has noticed a clear trend that sees customers steer away from highly customised systems to more instantly reliable, tried and tested solutions. "These are the systems that can be implemented quickly," explains Schmidt. "This kind of demand is just one reason why we have standard versions of all of our solutions." In the past, airlines and ground handlers dominated Inform's customer base, but the company is now looking increasingly at partnerships with airports. In addition to the ongoing work in Mexico, and elsewhere in places like Zurich, Inform is involved in a ground-breaking implementation of a full-scale operational database for Stuttgart Airport. For the next two years, a team of 20 Inform engineers and consultants will carry out the turnkey implementation of the GroundStar system at Stuttgart. Once finished, it will manage the complete ground handling operation and all logistics functions at the airport. The comprehensive system will cover the planning of staff, equipment, gates, stands and other resources, the day-of-operation tracking and allocation of these resources, the administration of contracts between the airport and the operators, and the invoicing of airport services. With such projects in the works, it is no surprise that Inform is adding rather than cutting staff - a refreshing change from what has been seen in all too many other parts of the industry. Overall, the strength in depth of the specialist ground support companies in Germany demonstrate that with a little invention and the necessary patience, opportunities remain even in this most difficult of market places.

Resources

Dr. Ing. Ulrich ESTERER GmbH & Co. Fahrzeugaufbauten und Anlagen KG
Tel. +49 5605 809 0 o Fax. +49 5605 2799
www.esterer.de

German Airport Technology & Equipment Association (GATE)
Tel. +49 6128 9472 90 o Fax. +49 6128 4594 3
www.gate-alliance.com

INFORM GmbH
Tel. +49 24 08 94 56 0 o Fax. +49 24 08 60 90
www.inform-ac.com

Rofan GmbH
Tel: +49 7156-4316 0 o Fax : +49 7156-4316 90
www.rofan.de

Siemens AG - Siemens Airports
Tel. +49 9131-746415 o Fax +49 9131 720390
www.is.siemens.de/siemens-airports/

Transnorm System GmbH
Forster Strae 2
D-3207 Harsum
Tel. +49 5127 4020 o Fax + 49 5127 4400
www.transnorm.de