Ground Handling Outlook '05

Feb. 1, 2005
As a ground handler what do you see for 2005 and beyond?


Alain Chapgier, General Secretary

At Aviance, we collectively anticipate following evolutions in the air transport industry:

1) Consolidation (it already occurred among manufacturers, soon to take place among carriers and airport services companies)
2) Gradual convergence between low-cost carriers and legacy carriers: the former will suffer from their success; the latter will streamline to survive
3) Extension of point to point operation, with a slight downturn in complex and costly hub and spoke connections
4) Drastic changes in services to passengers landside (more and more will be done off airport, even at home)

At Aviance, we believe our strength comes from our diversity. Every member of the alliance has a long experience in ground handling, but in its own culture, environment and market. Pooling all this expertise allows us to exchange the best practices to progressively standardize and optimize our product to the benefit of the final customer: the passenger.

Fortbrand Services Inc.

Peter Stearn, Vice President

As the airlines continue to outsource ground handling functions to third parties, the ground handlers are increasingly looking to single-source solution providers, such as Fortbrand Services, to meet their new and used ground support equipment needs, as well as to provide short-term rentals and longer-term leasing and financing of ground support equipment.

GAT Airline Ground Support

Richard Theil, Marketing Director

The airline industry has undergone a transformation due to financial challenges resulting from over-capacity, economic pressure and the long-term ramifications of 9/11. The business models that proved to be highly successful in the mid to late '90s have become obsolete resulting in major airline companies re-defining their vision for the 20th Century.

Suppliers providing services to the airline industry have shared the financial pressures resulting from the turmoil inherent in the industry over the past year. To adapt to this changing climate, ground handling companies must be creative in developing strategies that will allow them to remain competitive in the marketplace while fostering a spirit of teamwork and ownership among employee groups. This framework for success must have buy-in from all departments for the corporate leadership team to be successful.

GAT is making a commitment to the long-term industry outlook by broadening the scope of services that we provide our airline customers. There are several advantages to this approach, which include synergies gained through an integrated staff plan, simplification of invoicing mechanisms and the streamlining of auditing practices in the areas of regulatory compliance and fiscal responsibility.

A true partnership approach to the outsourcing process ensures service integrity and a seamless integration of products and services. GAT adheres to the philosophy that strong business relationships are built on a reputation of reliability in service and the overall value of services offered to customers. In summary, the best price is not always the best value.

To this end, we plan to invest wisely in technological advances and the development of key personnel to meet the changing needs of our customer base. We truly believe our employees to be our most valuable asset and the key to the long term success of the company. Internal and external resources have and will continue to be used for employee development to facilitate innovation, creativity and leadership in the workplace. Technological advances will be used to expedite process mapping and productivity tracking thereby, reducing exposure waste in the workplace.

Goldair Handling

Wolfram Pinhammer, Commercial Director

The Greek Handling market will continue to ride the wave of liberalization and we intend to expand our station network to Corfu (CFU) and Rhodos (RHO) in 2006 with more stations to come. Having the liberalized airports of ATH, HER and SKG, thus offering our services at five airports and hosting 70 percent of the total Greek flight traffic, places our clients and us in a much better position to overcome the monopoly of Olympic Airways which we did successfully at ATH and SKG and in some regard also at HER.

So we foresee a better service attitude at better rates for our airline customers and for us a major step to widen our portfolio by leisure carrier.

Sata -- Servi?os Auxiliardes de Transporte A?reo S.A.

Daniella Schmidt, Marketing Coordinator

As Ground Handlers, we foresee that managing the high prime costs is the best way to achieve the partner's goals as well as preserving the quality already recognized by our customers.

Skystar Airport Services Pty Ltd.

Neil Bolton, National Business Manager

It should be apparent to those in the aviation industry, that the way airlines do their business has changed significantly. Competitive strategies and market share, together with a strong emphasis on cost control and reduction, are crucial elements in providing a service to satisfy the needs of the travelling public. Carriers that are currently not outsourcing those aspects (ground handling, engineering, catering, cargo and logistics to name a few) that support their core business (flying aircraft) are coming under increasing pressure to remain competitive or even viable in an industry that is under enormous pressure due to rising costs. At the same time, the consumers of their products, the travelling public, are enjoying the lowest airfare, relatively speaking, since the introduction of commercial airline services. High cost base carriers are further effected by the rapid increase in the number of low-cost carriers entering the market place worldwide.

This trend has provided significant opportunities for independent specialist service providers such as ground handlers. The market share of independent service providers has significantly increased over the last five years. Those carriers that have outsourced noncore business are placing increasing pressure on these service providers to deliver reduced costs while maintaining the delivery of safe exceptional services.

To achieve success in such a market place, all sections of the industry have to accept that change is happening at a fast rate. We have to accept those changes and mold our operations to provide superior service delivery to suit our client's needs. Skystar has been fortunate in being able to employ very experienced and motivated people to transact its business. To meet the challenges we have developed a unique culture whereby a team environment has been formed across the board. Demarcation is non-existent and multiskilling is accepted readily to ensure that our staff and client needs are satisfied. As mentioned, the acceptance of change is a must, and to be part of an organization that is committed to succeed for its share holders and give security to staff in terms of their personal development, is most satisfying and rewarding.

The most important point to recognize is that Skystar is not an airline. We are a professional ground handling organization, determined to effect change and adapt to the requirements in resources and technology to move forward with a changing environment.

United Services

Christine Mikel, Sr. Staff Specialist Promotions & Communications

At United Services, we continue to forecast moderate growth in the ground handling services industry. Customers are continuously reassessing the market and revalidating the purchasing decision while seeking to add overall value. United Services can provide ground handling services that meet customers' requirements. We believe that flexibility and adaptability are key elements to success. Additionally, customers continue to look for one supplier to handle all of their ground handling needs -- so offering a breadth of services will give full-service providers, like United Services Ground Handling, a competitive edge.