With a number of airlines contracting out ground handling, will the other airlines follow and how will it affect GSE sales?

Feb. 1, 2005
Q & A with Kevin Paddick, Rhonda Hamm-Niebruegge, and Larry Laney.

Q: With the advent of a number of airlines contracting out all or most of their ground handling, will the other airlines follow suit and how will it affect GSE sales?

Facility Manager,
British Airways

I believe this will happen in most areas of the industrial world not only in the aviation sector. Nowadays, the most important concern to most businesses, especially within the airline industry is to save money. If that means getting a third party to carry-out certain elements of your operation, as long as standards and quality are maintained, then why not?

Putting a different slant onto this, most airlines farm out such operations as catering, cleaning, baggage handling, etc. I don't believe that for an instant, anyone who flies on a regular basis, really considers or even worries about who handles these issues as long as safety and service are not compromised.

For many years I have been involved in the maintenance of either buildings or equipment and the norm was to have control over day-to-day events which, in most people's minds meant a smooth, controlled and stable environment. But even then if any major breakdowns or repairs were required we would call in outside or third parties to assist but still ensuring the stable and controlled environment everyone seems to like.

Needless to say, most of the time nobody ever knew the difference. This is also true when considering using GSA's or independent handling agents. The mold of these companies nowadays have changed from being the ugly duckling of the industry to being a first line activity of significant importance to most of our operations.

With current economic crises putting pressure on the airline companies to slash prices and the liberalizing of the aeronautical administration, forces have ensured that these third party handlers compete in a professional and efficient way, improving their quality systems through ISO9001 and updating their facilities and operating environment standards.

This also brings with it the competitive scenario, which means that these companies have to guarantee that their service provision is flexible and that they have the ability to adapt to the customer's needs and ensuring their continuity.

Keeping in mind the term Best Service at the Best Price, independent handlers and third parties are starting to become aware of their importance to the aviation arena which in turn will be good for the airline industry as a whole.

Q: How are the latest security issues and concerns going to affect handlers?

Rhonda Hamm-Niebruegge
Managing Director,
American Airlines -- St. Louis' Hub

As we move into another challenging year for the airline industry, security continues to be on the forefront of issues that we face daily. As the airlines look at streamlining costs, safety and security are two areas that cannot be compromised. However, the need to work safer and smarter has never been more prevalent.

As the trend grows for airlines to outsource smaller operations, ensuring that FBOs are fully trained, qualified and aware of the latest security directive is clearly an ongoing priority. Each carrier has a program in place for their own employees to familiarize and learn detailed information about security directives, however, when a location is outsourced to a vendor, one must ensure that vendor is equally as well-trained. The rising costs of training and the frequency of changes that occur with TSA directives makes it more difficult for the FBOs to be price competitive, while at the same time, convincing air carriers they are equally prepared to meet the demands.

The air carrier is ultimately responsible for meeting the directives, which leads the air carriers to have programs in place to test the FBOs for accuracy and compliance. Again, adding costs to an already struggling industry, but a necessity the airlines absorb to ensure the traveling public that flying is safe.

Although these challenges exist, I believe the competence level of the employees working in this industry, whether it be an airline employee or an FBO employee, has never been greater. Additionally, the relationship between the two parties has gained respect for what they have been able to accomplish.

Director Ground Support,
Southwest Airlines

When someone asks me about security issues and concerns it reminds me of the Texas weather "If you don't like a current security issue, just wait a day and a new Security Directive will come out from the FAA or TSA."

Did you know that there have been over 60 Security Directives issued since September 11th and that
most Carrier's have had to change their AOSSP's (Aircraft Operators Safety Security Program) at least eleven times?

So how has that impacted handlers? I would think that unless the handler is contracted by a carrier to manage both customer service and ramp operations that there won't be a major effect on the handlers.

Since carrier's rarely outsource customer contact functions, most handler's contracts are strictly for ramp operations and maintenance. Once the passengers have been screened and the baggage has made its way to the baggage make-up area, loading and unloading of the bags and getting the aircraft off on its way has not changed significantly as a result of security issues.

The security changes since September 11th, although important and needed, are increasing carrier's cost which will eventually increase everyone's cost in the industry including handling companies.

If I were managing a ground handling company, I would be more concerned about new emission reduction programs being proposed by the California Air Resource Board which will drive up their cost along with the carrier's when the industry can least afford it.