Embracing all Things Ground Support

June 1, 2001
Guest Editorial

Embracing all Things Ground Support

By Richard Rowe

June 2001

Well, okay, it’s not really a guest editorial. It’s more of an inside job. I have muscled in on our popular guest editorial column to tell you a little more about GSE Today’s editorial focus--a focus that has grown to encompass not only the international ground support equipment world, but also that of the global ground services market.

We have worked hard on developing the service side of our readership to add value to our more equipment-focused readers and advertisers (after all, ground handlers buy equipment, too), as well as to ensure that the magazine reaches the key ground handling contracts managers around the world.

Our feeling is that a dedicated, international magazine such as GSE Today is well placed to successfully pull together the equipment and service sides of the ground support business. In fact, a glance at our editorial content over the last few years highlights how this process has already begun. This issue alone looks at airline outsourcing of ground services, as well as profiling a regional handler in Canada, and looking at the Latin American scene.

Last month, GSE Today attended the annual IATA Ground Handling Council (IGHC) meeting in Hong Kong. The IGHC is a permanent council that reports to IATA’s Airport Services Committee, and the annual meeting is the single largest gathering of ground handling executives in the world. It brings together airlines, ground handling companies, and airports not only to discuss official IATA business, but also to chew the fat on the major issues affecting the world of ground handling today. Interestingly, the keynote speaker from Cathay Pacific talked about handling the A380 and future next generation aircraft--a topic widely discussed in our March issue. This is where ground handling contract business gets done and I’m pleased that GSE Today was in Hong Kong to be part of it.

Next year’s meeting will be in Las Vegas. This is something of a second home for GSE Today given that our sister exhibition, GSE Expo, takes place there each year in October. I look forward to a strong attendance by the GSE Today team next May, and another opportunity to take stock of all the developments that take place between now and then in a sector that is as dynamic as any other in aviation.

That dynamism was demonstrated perfectly as GSE Today went to press when Lufthansa announced the sale of 51 percent of its ground handling subsidiary GlobeGround to the French Penauille Polyservices group. Penauille, of course, already acquired British ground handling giant Servisiar in 1999. Penauille Polyservices S.A. is a quoted company that provides industrial services such as facilities management, cleaning and security services, mainly in France.

GlobeGround was founded back in 1990 to provide Lufthansa with a way of maximizing cost advantages when purchasing international ground services. Lufthansa has recognized that industry liberalization and continued consolidation will require extensive investment, and has decided to step out of its strategic investment in international ground services.

According to the agreement, Penauille Polyservices will initially acquire 51 percent of GlobeGround’s shares with the remainder transferred to Penauille Polyservices on June 30, 2002. The transaction values GlobeGround at Euro 370 million (US$324 million) on a cash- and debt free basis and is subject to approval of the Lufthansa Supervisory Board and the various competition boards. The airline will continue to be the majority shareholder in GlobeGround Deutschland, the operating entity for the German home market.

The combination of GlobeGround with Servisair creates the world’s largest ground handling provider, operating at 199 airports in 39 countries on 4 continents. Penauille Polyservices says it wants to make the most of the growth synergies between the two and will rely on existing management and staff of GlobeGround and Servisair. Peter Bluth, currently CEO of GlobeGround, will become CEO of the enlarged ground services business while John Willis, currently CEO of Servisair, will become its Chair.

It is a fascinating combination of two increasingly global brands. GlobeGround has spread its reach all over the world, while Servisair stepped beyond its traditional European and Scandinavian territory into North America in January last year (see "All the Right Moves, GSE Today, April 2001).

Clearly, Penauille’s latest acquisition suggests substantial revenue synergies from global branding and key account management as well as cost synergies gained from the enlarged operations. The combination also has strong implications for changes in equipment and systems procurement (as will the ongoing positioning of other major ground handlers).

The world of ground handling has truly shifted from the old days of airport monopolies (mostly in Europe), and small, local, independent operators. Interestingly, the rumblings from GlobeGround HQ suggest that industry consolidation will continue and that the GlobeGround/Servisair combination intends to actively participate in that consolidation.

Needless to say, GSE Today will be in attendance at the annual GlobeGround press conference in Frankfurt, Germany on June 7. It is another demonstration of how serious we are about improving our coverage of this market. With three senior editors in North America and writers around the world, GSE Today will provide information on everything from the marketing and buying of ground handling services to the very latest in ground support equipment developments.

All I ask is that you help us continue to get under the skin of this industry. Whether you are ground equipment or ground service buyers or sellers please talk to us when our editors come calling. Your input and your organization will gain exposure to the best possible audience of buyers and sellers around the world.

Remember, GSE Today is now the most widely read ground support publication in the world with more than 15,000 individual subscribers in 200 countries, and a pass along readership of over 70,000. This includes the key decision-makers that purchase ground support services and equipment. I look forward to working with you, and making GSE Today an even more comprehensive information source where ground equipment and ground service developments sit side-by-side.