WINTER 2014/SPRING 2015 AIRLINE GROUND AGS SERVICES www.ags-airlinegroundservices.com ECONOMICS OF GROUND HANDLING WORLDWIDE DIRECTORY COMMERCIAL AIRLINE SERVICE CHALLENGES OF GROUND SERVICE GROUND HANDLING TRAINING WORLDWIDE PROVIDERS From XS to XXL. Fraport provides the perfect service tailored to every plane. Every airline customer is unique – and should expect customized service. A ground handling partner with years of experience and expertise, Fraport AG knows exactly what each airline needs. Together, we develop the right solutions designed to meet your specifi c requirements. Flexibility is a major advantage, especially when we have to get late arriving planes out even faster. We know the processes on the ground and can move into action with speed, precision and effi ciency. We put performance fi rst, not size. Let us be your fl exible ground handling partner. Contact the Fraport ground services: phone +49 (0) 69 690-71101 / [email protected] / www.fraport.com Fraport. The Airport Managers. Fraport_Ad_E2_XS_XXL_E_A4_1.indd 1 21.08.14 10:01 EDITOR’S LETTER | WINTER 2014/SPRING 2015 WINTER 2014 AIRLINE GROUND LETTER FROM AGS SERVICES THE EDITOR www.ags-airlinegroundservices.com GROWTH AN WHAT DO LCCS OUTSOURCING DEVELOPING IN THE ASIAN OVERVIEW WANT FROM AND FACILITIES ROUTES IN A FAST- MARKET OF ISAGO GROUND HANDLERS? MANAGEMENT MOVING WORLD elcome to the Winter 2014 / Spring 2015 edition of AGS Magazine. Despite all the geopolitical and PARVEEN RAJA economic shocks, the aviation industry has proved its Publisher [email protected] resilience in 2014. For example, we had Boeing raising its annual profit forecast in October at the height of the WISIS and Russia-Ukraine crises. A bumper order for 100 737 MAX 200 BHAVI PATEL Events Coordinator aircraft from Ryanair had Boeing announcing that it would be raising the [email protected] numbers of its latest, fuel-efficient version of the aircraft in 2018. Nothing cheers the industry more or faster than substantial orders for new aircraft! SHELDON PINK In this edition AGS talks to leading ground handlers around the Graphic Designer/Production world about the challenges they face, both locally and globally, and [email protected] finds considerable optimism about growth prospects in the sector. Security continues to be a priority focus and there is strong awareness SHOBHANA PATEL Head of Finance throughout the sector of the importance of providing a first-class fi[email protected] product at economy-class prices. The basic reality that all players have to grapple with is the pressure on airlines to reduce their on-ground CHARLOTTE WILLIS costs, but the sector has to fight its corner and not allow price to Events and Circulation overrule quality. [email protected] This issue profiles LSG Sky Chefs, the world’s largest airline catering provider. We take a closer look at their operation, as well as the new in-flight menus Finnair has developed in partnership with some of Finland’s top restaurateurs. The catering and ground handling markets in Russia come under the Address changes and subscription orders to: spotlight, since both sectors are undergoing huge changes. We also look [email protected] ISSN 2040-476X at the latest news in IT systems and route development. The lighter side of human factors and safety management comes to EDITORIAL CONTRIBUTORS the fore with Janet Wallace of Air Canada discussing these critical issues. Anthony Harrington, Megan Ramsay, AGS Martin Courtney, Eugene Gerden This issue sees re-introducing our comprehensive directory of and Janet Wallace ground service providers. We intend this to be a regular feature, please advise of any changes or omissions. AGS PUBLISHED TWICE A YEAR BY As always, welcomes your feedback. If you are interested in EVA International Media Ltd contributing an article or interview, please let me know. 25 Burcott Road, Purley Surrey, CR8 4AD, UK I hope you enjoy this edition of AGS magazine. Q Tel: + 44 (0) 20 8668 9118 Fax: + 44 (0)20 8660 3008 Website: www.evaint.com PRINTED BY Headley Brothers The Invicta Press, Lower Queens Road Ashford, Kent, TN24 8HH, UK DISTRIBUTED BY Business Air EVA INTERNATIONAL MEDIA LTD PUBLISHERS & EVENTS SPECIALISTS KIRSTY POWELL Issue 18 © 2014 | www.evaint.com Editor Content may not be reproduced in any format without written permission from [email protected] EVA International Media Ltd www.ags-airlinegroundservices.com WINTER 2014/SPRING 2015 Airline Ground Services 1 CONTENTS | WINTER 2014/SPRING 2015 8 Routes Manoeuvre David Smith asks how airlines can leverage their unique competitive advantages when planning routes. CONTENTS 1 Editor’s letter 4 Industry overview The economics of commercial airline ground handling, by Anthony Harrington. 14 Training excellence AGS asks two of the major providers of ground services training, IATA and Air France Ecole des Escales, about their products. 16 Handling challenges worldwide 26 Aviation forges ahead with innovative IT upgrades High employment, pressure on prices Martin Courtney looks at how mobility, common use systems and IP communications and infrastructure, and political turmoil: these are just some of the support greater information sharing and effi ciency. challenges facing ground handlers as the market continues to evolve. Megan Ramsay, Kirsty Powell and Eugene Gerden speak to some of 35 Change in the air the world’s leading ground handlers to fi nd out more. AGS Magazine’s Russian reporter Eugene Gerden looks at the local onboard catering industry, which is on the verge of big changes. 37 Helping ‘lost’ become ‘found’ 32 Top of the food chain According to industry sources, 26 million bags go astray each year. That’s the equivalent With 208 customer service centres catering to over 300 airlines in 54 of one bag for every transfer passenger who passed through London Heathrow in 2013. countries, LSG Sky Chefs is the world’s largest infl ight catering What can be done to help reunite bags with their owners? provider. AGS Magazine spoke to the company about the its operation on the ground. 41 Working together for safety Throughout the industry, airlines and handlers are increasingly focusing on safety management AGS 39 Human factors, nano- systems and just culture. spoke to Europe’s largest regional carrier Flybe about how safety codes and SIMS... oh my! and management teams are working together to break down barriers to effective cooperation Janet Wallace, Director, Airport Services, Contracts & and conduct impartial investigations. Administration for Air Canada, writes about the lighter side of human factors and safety information management systems. 47 Worldwide directory of Ground Service Providers 2 Airline Ground Services Winter 2014/Spring 2015 www.ags-airlinegroundservices.com FEATURE | GROUND HANDLING INDUSTRY OVERVIEW The economics of commercial airline ground handling, by Anthony Harrington ne of the astonishing tities and have expanded far beyond lated that access to the market by sup- things about the com- their national borders, to become ma- pliers should be free and that for some mercial airline business jor players in their own right. Other categories of service there should be at is the paradoxical way it suppliers have only recently, or more least two suppliers at larger airports is characterised by both recently, become independent compa- (one of which had to be independent Orapid change and stubborn resistance nies and are at a much earlier stage of the airport or the dominant carrier) to change. This is particularly evident in formulating anything resembling a the stage was set for some ground han- when it comes to providing ground global ambition. dling suppliers to grow rapidly. handling services for commercial air- The high costs associated with Moreover, in November 2011 the lines. In essence this is a highly capital launching services for a supplier who EC decided to compel airports to al- intensive and people intensive business, is new to a particular airport, along low at least three independent ground where players have to contend with high with the steady returns that can be handling providers to operate servic- volumes and extremely thin margins. generated once that supplier has es, instead of the original two, which Ramp service equipment requires a sub- built up contracts with several of the helped to speed up the competitive stantial capital outlay or commitment to airlines based at that airport, make process. a major leasing contract from day one. ground handling an ideal business op- As the market analysis specialist, The high cost of training staff to the re- portunity for venture capital compa- CAPA, which provides fleet analysis quired standards is a constant theme. nies. They can help the supplier meet and statistics on the airline sector, Moreover, where airports have opened the high start up costs and in effect notes: “At one time, ground handling up to multiple ground handling compa- bankroll the supplier as it seeks to was probably the least competitive nies, retaining the business of airlines move into airport after airport. business segment within the airports who can switch suppliers more easily to- The biggest barrier to growth for sector in Europe.” All that has changed day than ever before, is a huge challenge. every ground services company is and where airlines had complained for The ground services market is also probably the grip on the provision of years that they were paying exorbitant an extremely mixed affair. There are services that airport authorities and prices for poor service and poor qual- niche providers located at a single national airlines had from the early ity as far as ground handling services airport, others who provide services days of air travel, and which many of were concerned, there is now a real at a handful of airports all within them still retain. In a number of coun- emphasis by suppliers on quality and the same state, and a sprinkling of tries the monopoly grip of the airport competition.