Where outsourcing prevails, the pattern sees Frontier handled by fellow airlines at the ticket counters and more of a mix between airlines and service providers on the ramp. It’s a fine balancing act. "The majors are more expensive, but with ground handlers service levels can vary within the life of a contract," says Bowers. "Ground handlers can use you to get into an airport and become successful through you, only to drop their standards when a bigger and more prestigious client comes along. There is also the question of high turnover, with the new staff ending up on your flight while the veterans are assigned to the new customer."
Some of Frontier’s outsourced services are provided by Delta (at Houston, Orlando, and on the ground at San Diego), and other majors are also contacting Frontier about providing handling services at its outstations. "With the softening of the market, we do see some major carriers that have typically eaten up space looking to offset rising costs."
So, does Frontier’s reevaluation and taking back of some ground services mean that it is now considered an airline core competence? Bowers hesitates before saying, "It’s not a core competency yet but we have assumed many contracts and it could well become that way."
It must, of course, prove economically viable to self-handle. Frontier has signaled its intentions having just spent some US$1.5 million on GSE--$600,000 on a quick overall face lift, $500,000 specifically at Denver, and now a further $500,000 on the rest of its operations.
The airline is also looking hard at its people. "It is important to provide a good working schedule for people to help keep them." It is difficult to keep staff occupied with just two flights a day and is hardly the best use of their time. Clearly, contracting out can be more efficient in this case. Frontier is tackling the issue head on with innovations that Bowers brought with him from Horizon. "We are utilizing current technology to set up reservation systems at each airport station," he explains. "Once a flight has gone, they [ticket agents] go back and become live reservation agents. The efficiency skyrockets, and employees learn both sides of the business. They can work on their technical skills without us having to hire a new person. It is a better use of their time and gives them a better work schedule."
Frontier plans to roll this program out starting September 1 at El Paso. The rest of the airline’s stations will be wired by the end of the year and then it will just be about training, says Bowers.
What do airlines want?
What airlines want and what service providers think airlines want can be two different things. Current market conditions do not help matters. Today, there are few entry barriers into the North American ground handling market, with no license restrictions to circumvent, plenty of used GSE to help facilitate a ground handling start up, and no real quality check when a new handler enters an airport. Service providers argue that airlines encourage these start-ups because it means lower costs for them.
Global service providers believe they can counter this by providing services throughout a large network with standardized processes and consistent quality levels. They repeat a familiar refrain--airlines really want one-stop-shopping, regional/global purchasing, local full service providers, and long-term contracts.
"The trend now is to globalize relationships with airlines by matching as much as possible the ground handlers’ network with that of their airline customers," believes Sylvie Greleau, Director, Sales and Marketing, Menzies Aviation Group (MAG), The Americas (formerly Ogden Aviation Services).
"The ability to provide a complete range of services at multiple airports is very important to our customers," adds Erich Bodenmann, CEO, Swissport North America, which provides comprehensive ground services at over 60 airports in the U.S. "Globalization is a good thing for Swissport’s customers. It allows them to secure services worldwide and minimize the number of providers with whom they have to work. Having too many vendors is a problem as most airline purchasing departments are very lean and already overburdened. Having global vendors with universal quality standards allows our customers not only peace of mind with respect to the quality expectations but also allows both of us the ability to benefit through economies of scale."
Cover Story Airports Show Their Colors While some airports in Europe prefer simply to oversee their ground service providers, others adopt a dual role as airport operator and ground service...