Airports Show Their Colors

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 provider. Richard Rowe looks at how three major European...

Ground handling not only remains an integral activity for Fraport but is also considered
a core competence given that fierce competition between international airports demands smooth aircraft handling.

Gérard Borel at ACI Europe would agree, as he says there is normally no real possibility for an airport managing body to guarantee a particular quality of service. Airlines that talk about deciding on the level of quality expected from a ground handler based on the overall image they want to portray are missing the point, he says.

Airports 3"This is a completely biased view of the functioning of an airport," argues Borel. "It is not the image of the airline but that of the airport that a passenger refers to when he has a problem with busses for embarking, or for the delivery of baggage at arrival."

The same applies inside the terminal with problems such as long queues at check-in desks. "The difficulty is that the airport managing body has no power to reduce these queues," argues Borel. "If the airline decides to rent just two desks, then you cannot oblige it to open four." No wonder Fraport wants to retain control.

Fraport continues to expand its network through its Aviation Ground Services & Logistics business development unit. The division took its first steps overseas in the mid-1990s with the acquisition of a holding in Spain's Ineuropa Handling, followed by a holding in Goldair Aviation Handling in Greece. Major progress followed with the establishment of Portway handling de Portugal — a joint venture with the Portuguese airports operator ANA — and the winning of a ground handling licence for Vienna Airport.

Elsewhere, through the specialist GSE company TCR International, in which it acquired a 50 per cent, Fraport is also present in Belgium, the Netherlands, France, and the UK. At Frankfurt Airport itself, Fraport's handling division operates in partnership with or has a shareholding in several companies, including Airmail Center Frankfurt, N*ICE Aircraft Services & Support, Perishable Center Frankfurt and Tradeport Frankfurt.

Fraport says that such an international network allows customers to enjoy quality, local integrated logistics services, neutrality, individual multi-station contracting and one-stop shopping. With this networking in mind, it signed an agreement with the Arab Air Carriers Organization in November 2000 for cooperation with a dozen Arab airlines at Frankfurt, Vienna, and elsewhere.

"We are experts in operating a hub with large passenger volumes in a small space," says Eric Malitzke, Director of Acquisitions and Joint Ventures. We have the experience of handling Lufthansa on the ramp over the last decades and also Star Alliance carriers in the last few years."

The varying pace of deregulation across Europe has played a role in the expansion policy. "In northern Europe, liberalization came earlier and the markets were already largely divided up," explains Malitzke. "Southern Europe was more interesting because liberalization was only just starting and it was possible to enter new markets with potential."

Fraport is now also looking at opportunities in the US and Southeast Asia. The US is characterized by a high proportion of self-handling by airlines and a number of local or regional handling specialists. "Market entry would be easier in the USA because it is liberalized but there is very strong competition," stresses Malitzke. Southeast Asia, in contrast, is characterized by monopolies or duopolies, and due to the extreme cultural differences to Europe, a strong local partner would be necessary, he adds.

Unlike many other European airports, Fraport has the ownership structure and experience to export its expertise. Not all the region's airports have such ambition, but it seems likely that other parts of the world will experience a taste of one of Europe's expansionist players sooner, rather than later.

We Recommend