Ground Handling: One Year On

Cover Story Ground Handling: One Year On Faced with an intensely challenging market over the last 12 months, many ground handlers have spent much of the past year rethinking what services to offer and where, writes Richard Rowe By Richard Rowe...


The company's continued focus on outward expansion is driven by two key factors. "First, our belief is that the growth rates we have enjoyed in Singapore will not continue," says Singh. Second, in times of difficulty, SATS likes to focus on opportunities rather than threats. Singh points to a strong balance sheet and an enviable investment "war chest" of S$300 million. "We see the current environment, where valuations are depressed, as an excellent time to invest for future growth," he contends.

Singh also notes that not all of the industry has been hit during the recent economic downturn. "The China market has experienced strong growth and is the fastest growing aviation market in the world."

This means the industry can expect more of the same from SATS: cargo handling, ramp handling, passenger services, baggage handling, catering, laundry, and airport security will all remain core business activities.

"We see ourselves as an integrated service provider and have no plans to retreat in these areas," says Singh. "In fact we want to strengthen them and replicate this at overseas airports through joint ventures."

CHANGING PRIORITIES
For others, the priorities are somewhat different. After three different owners in as many years, Worldwide Flight Services is looking forward to a period of continuity with its latest parent, France's Vinci Group, which bought the company from investment bank, Castle Harlan in September last year.

"The fact that Vinci purchased the company when it did speaks volumes," believes John Vittas, Senior Advisor, Worldwide Flight Services.

One year on, Vittas reports the difference between the two owners is like night and day, and certainly indicative of their different backgrounds. As an investment bank, Castle Harlan approached its ownership of Worldwide from a purely financial standpoint.

"It was financially-driven with less effort on the customer side," says Vittas. Not surprisingly, as Vittas points out, "It felt very transitional and was not good for employees or customers."

Mr. John Vittas,  Senior Advisor,  Worldwide Flight Services.

Vinci, on the other hand, arrives with strong airport management expertise -subsidiary Vinci Airports manages some 30 airports around the world under long-term concession agreements - and wanted to add a complementary service arm. "Vinci has brought with it a new sense of security," says Vittas.
Times may be tough, but it seems that the French group has not flinched since the purchase. "Customers certainly want more efficiency and more cost savings, but Vinci has also not lost sight of the need to have a business plan," contends Vittas.

Vinci has brought to the table the kind of clear strategy that had been missing for some time at Worldwide: a strategic plan that takes into account customers, shareholders, employees and competitors. "We really need to address each," says Vittas.

Under Vinci, Worldwide will continue to develop its international business and explore additional service lines. Cargo handling remains a mainstay for the company in Europe, although the purchase of French handler SEN brings a major ground handling presence at Paris CDG's terminals one and two. In fact, the arrival of SEN means that passenger/ramp handling is now Worldwide's largest business segment.

Worldwide is also trying to leverage the presence of Vinci in specific markets, but is equally keen to stick to what it does well. But where does a company draw the line?

"It's hard to say, as it depends on the city, current services offered, the customer base and other factors," comments Vittas.

Certainly, Worldwide has already highlighted its versatility, particularly in Hong Kong where it provides ancillary passenger services on behalf of the Airport Authority and more than 60 airlines at Hong Kong International Airport. These include porter service, electric vehicle gate transportation, wheelchair services, unaccompanied minor and VIP escort services, plus airport to city baggage delivery and pick-up services. Worldwide also provides services for the MTR Corporation's Airport Express Line baggage handling system.

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