No Customers Yet For ASIG At Changi Airport, But Ground Handler Remains Upbeat

April 2, 2012
Breaking into the market has been tougher than expected, but managing director says ASIG is making progress

Changi Airport's new ground handler admits it has taken longer than expected for the firm to secure its first airline customer.

But Pat Pearse, managing director of United States-based Aircraft Service International Group (ASIG), is confident that business will come.

More than nine months after the firm bagged the licence to handle passengers, baggage and cargo at the airport, it has no customer, no office of its own at Changi and no equipment.

However, ASIG remains upbeat about the prospects for the ground handling business in Singapore and the region, Pearse said.

Speaking to The Straits Times recently - in ASIG's first media interview since being awarded the contract last June - he said: "There is an element of positivity around what is likely to be coming round the corner. I cannot tell you if it will be tomorrow or next week. But this is doable. We know we can do this and we think we can do it really well."

The firm's entry into the market, currently dominated by incumbents SATS and Changi International Airport Services (CIAS), came two years after its predecessor Swissport withdrew.

The global European firm, which began operations in Singapore in 2005, quit four years later after suffering losses of more than $50 million.

Its exit prompted some industry players to suggest there was no room for a third ground handler at Changi.

But Pearse does not agree.

Trying to break into the market has been tougher than expected but ASIG, which has so far knocked on the doors of about 20 airlines operating at Changi Airport, is making good progress, he said.

"The responses we have received have ranged from 'we just signed', 'come back in three years (after our current contract expires)' to 'we are not interested but good luck' and then there are those that come and talk to us," Pearse added.

He did not divulge details, but said the firm is in serious discussions with a few carriers.

Rivals SATS and CIAS did not comment on whether they have cut their rates in the last year to retain their customers but said that they will continue to work with their airline partners to support them through the current tough operating conditions.

ASIG will not compete purely on costs, Pearse said.

"Cost is always going to be a factor, whether we like it or not... But we are not in the business of thrashing rates or dragging prices down to a place where it cannot sustain itself. We need to be able to run a profitable business," Pearse said.

The chief executive of Tiger Airways, Chin Yau Seng, said that when choosing a ground handler, airlines consider not just cost, but also the ability to deliver good quality services.

Changi Airport Group spokesman Ivan Tan said the decision to appoint a third handler followed feedback from airlines that wanted more choice and competition.

ASIG, which has a presence in more than 70 airports - mainly in the United States and Europe - is prepared to wait for the carriers to say yes, Pearse said.

"When we come to the point where we have knocked on every door of every airline and they have said, 'Go away, we are not interested', then I think you have got to think very seriously about it," Pearse said. "We are a long, long way from that day."

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