There’s a valuable opportunity on the horizon for ground handling agents (GHAs). By adapting their offering and adopting new technologies, they can future proof their business models, better support airlines and enhance their sustainability credentials.
Such a shift is increasingly necessary as sustainability climbs the agenda, with airlines simultaneously trying to adapt their business strategies in response to the well-documented industrial challenges, such as inflationary pressures and staff shortages. Specifically, low-cost carriers (LCCs) have evolved their businesses to meet the demands of a changing landscape, incorporating elements of full services offerings into their low-cost high efficiency model.
The ground handling model looks to become more rather than less complex. New LCC models mean they will have different requirements of GHAs. As such, the successful GHAs of the future will be those that adopt technologies and processes to stay ahead of a dynamic industry.
How GHAs Can Adapt
The challenges faced by LCCs have prompted them to explore new ways of generating revenue, with carriers increasingly moving to a "hybrid" approach that places them between traditional LCCs and full-service carriers (FSCs).
Some LCCs have expanded beyond offering pure point-to-point services to instead provide travelers with connection opportunities. This represents a break from traditional models, in which LCCs did not provide connection options on airline booking engines and instead required passengers to self-connect with no facilitation at the airport.
For GHAs, this means processes need to be re-engineered to meet connection time requirements. Despite the additional cost, dedicated processes and resourcing for connecting passengers and baggage has been utilized by some airlines and GHAs to meet performance expectations. It can be as simple as pre-sorting transfer baggage at outstations into different sections of the aircraft hold or implementing consistent handling process and policies for main interline transfers.
Other moves to generate revenue streams have included LCCs offering longer-haul flights, taking advantage of the latest equipment, and reduced operating costs to enter a market typically considered the preserve of full-service carriers with wide-body aircraft. While service requirements may increase, it also creates opportunities for GHAs to procure additional ancillary revenue through marketing value-added services such as upgraded seats, meals and amenities during check in or boarding.
Additionally, despite 98 percent of the global LCC fleet currently comprising narrow-body aircraft, some LCCs have begun to take on wide-body aircraft to operate a mixed fleet. Around 40 wide-body aircraft are on the order books of six LCCs. This has enabled LCCs to explore entering the cargo business, which they have traditionally avoided because of narrow-body belly hold limitations. LCCs like Air Asia are also introducing freighters into their fleet.
GHAs will need to prepare by ensuring they have effective processes and equipment in place to handle air cargo (some of which are time and temperature sensitive), while meeting requirements for short LCC turnaround times.
The Role of Technology
The additional process requirements in response to new LCC models need to be complemented by technology to drive organizational cost efficiency.
One example is ground handling digital optimization, including automated data capture in aircraft and ground communication systems to provide real-time visibility across the ecosystem, which can facilitate preventive intervention.
And while there has been technological progress in monitoring aircraft turnaround activities and utilizing data to understand root causes behind delays and operational issues, there is an opportunity to harness advanced technology, such as artificial intelligence (AI), to implement dynamic planning and create business intelligence tools, thereby improving productivity.
For example, real-time GSE location tracking allows GHAs to analyze the utilization of assets and enables managers to make data-driven procurement decisions and rightsize their fleet at every airport. AI can be used to forecast passenger flow weeks in advance and enable a productivity-boosting approach to planning, alleviating bottlenecks at key touchpoints.
From a passenger standpoint, the use of sensors and internet of things (IoT) technology offers the possibility of more customized and personalized experience, such as the ability to provide real-time information on queue times, flight status and baggage status.
Seeking Sustainable Solutions
Technology developments engineered to drive efficiency and streamline ground handlers’ operations can also support sustainability initiatives. These developments will be a key differentiator to achieving long-term environmental goals. Though its primary aim is focused on business optimization, saving time and resources can have a positive influence on the environment and provides a win-win situation for company executives.
For future-focused GHAs, adapting to offer better business outcomes should be married to efforts to behave more responsibly for the planet. These efforts to drive sustainability will have to be coordinated within the ecosystem. Only progress in a multi-stakeholder, multi-pronged approach can pave a path towards net zero, which means that GHAs must play their part.
This includes addressing the extensive fleet of ground support equipment (GSE) vehicles that are typically operated by combustion engines. There has already been significant progress when it comes to the transition to electrification, such as from the likes of Worldwide Flight Services (WFS), which provides cargo and ground handling services at seven airports in Spain and has already turned 89 percent of cargo handling-related GSE fleet to electric. Electric operational towing and taxiing solutions are also being devised for most aircraft and expected to be completed by 2025.
Moving to a True Partnership
For GHAs to cement their value with airlines, they also must forge deeper relationships – moving from agent-client interactions to genuine partnerships.
This involves elevating the role GHAs play. As airlines continue to channel more customer services online and push passenger self-service initiatives, passenger handling agents, for instance, should become more than operational processors at counters, instead taking on the role of customer service ambassadors who are able to handle issues and build airline customer loyalty.
Ultimately, the future of GHAs will be defined by their ability to respond to the demands of the future, today. That means embracing a more sustainable approach while tailoring strategies that meet the evolving needs of their airline partners and elevating relationships.
The need to adapt and form deep partnerships that keep pace with shifting models is more important than ever.
Mabel Kwan is a managing director at Alton Aviation Consultancy in Singapore. She is a co-author of Alton’s recently published industry whitepaper titled “Sustainable Efficiency: The Future of Ground Operations at LCC Hubs.”
