Beyond GSE Rental

A variety of operators in Europe have opted to wipe expensive GSE from their balance sheets to concentrate precious funds on service enhancement instead. And, as Richard Rowe discovers, GSE rental is only the half of it. March 2003 The need for...

"Another advantage is that the Ryanair contract runs for five years and in three years and 10 months from now I get totally new equipment," says Daniel.

The Ryanair operation at Stansted is currently the only one where Groundstar has handed its GSE operation over to TCR altogether, although a similar replacement of older equipment and handover is now being implemented at Groundstar's four other UK locations.

"We plan to phase out all the old equipment around the network in a total of two years," explains Daniel. With the odd exception, Groundstar is simply no longer in the business of buying GSE.

And the Ryanair experience will certainly stand Groundstar in good stead as it prepares for start-up at London Gatwick in March. This includes a five-year contract to handle 4,500 flights a year for charter airline, Monarch, which has again involved sourcing several million dollars worth of GSE.

Package Power
Part of the appeal for handlers such as Groundstar is that the market now offers tempting GSE packages that not only remove financial risk, but also improve overall ramp handling service. TCR's bespoke GSE rental package, for example, includes analysing customers' flight schedules to pinpoint GSE requirements; guaranteeing a supply of readily available equipment; preventative maintenance programmes; full training on equipment; and repair and maintenance for normal wear and tear.

"We take care of all the 'behind the scenes' activities associated with GSE ownership," explains Meulebroek. "This allows customers to concentrate on their core competence - efficient and safe ramp handling."

Similarly, TCR has developed a suite of tools to accompany its fleet service options: each item of GSE features a GPS tracking device that enables TCR to locate equipment and assign the nearest item for an incoming aircraft. Another is an electronic ignition key that ensures only authorised operators can access and use the equipment.

And then there is Magic, TCR's name for an electronic system for preventive maintenance planning, as well as tools such as GSEPlan and StaffPlan, both developed by Sabre, that calculate optimal GSE fleet size for every customer.

"We are able to take over in situations where airlines and handlers can't control their GSE and are unwilling to invest," explains Meulebroek. "We try to become an extension of a handler's own business."

Daniel appears comfortable with TCR becoming effectively Groundstar's sole GSE supplier. "We are not experts [in GSE management] so why should we be tied up with it," he reasons. "Our growth cannot be maintained if half my time is spent dealing with GSE manufacturers."

Of course, not all handlers are convinced. Peter Wehrli at Jet Aviation questions whether such a GSE package is not a solution just suited to new companies. That said, Wehrli does not dismiss the idea entirely. "A rental package could become attractive for us if we had secured a handling contract that asked for a large amount of equipment immediately," he says.

And this is perhaps the challenge for TCR, KES, and others to show that such a solution is long-term and offers more than just a quick fix.

"It is a big management decision for a large ground handler to go down this route 100 percent, but for certain other handlers it is a perfect option," argues Meuelbroek.

Daniel at Groundstar would agree: "We have been doing this for about 15 months now and although there are some additional costs at the start, we are really reaping the rewards now. TCR helps drive our growth."

And not just Groundstar's growth -TCR International tripled its business in its first year and doubled in the second. "Now we are growing at 40 percent per annum and I would expect that to remain the case for some time," says Meulebroek.

"But will the industry see TCR take its GSE management model outside of Europe" Meulebroek notes "contact 18 months ago with several operators outside Europe, and some in the U.S., but everything changed following 9/11."

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