Cash remains at a premium for GSE operators who have still not fully recovered from the impact of the Covid-19 pandemic on the global aviation industry, yet there is plenty of demand for their services – and so for the GSE they employ. GSE lease and rental options offer a very viable alternative to expensive equipment purchasing programmes
Brussels, Belgium-headquartered TCR is a specialist in full-service rental of GSE – namely, both the rent and maintenance of that equipment – for its large customer base. Bruno Vanpoucke, group strategic development and M&A director, explains that the company has seen significant – perhaps record – growth in its leasing business over the last 12 months and more.
High rates of growth have been achieved across TCR’s European, North American and Asia-Pacific operations, and has been both organic and inorganic in nature.
Today, TCR is “riding the wave” of a boom in demand for full-service rentals, Vanpoucke reports. And he puts that surge in demand down to two main factors. One relates to the financial flexibility that leasing provides; the second is the full-service maintenance capability that the TCR Group offers its GSE rental clients.
Many GSE operators have to allocate their cash very carefully, having yet to rebound fully from the catastrophic downturn in the aviation industry that occurred during the Covid pandemic. Yet, operators are being asked to meet more demand than ever from airlines and airports looking to meet the requirements of an industry now fully back on its feet. Hence, there is something of an investment gap – and this can be filled by GSE leasing options that avoid the need for high up-front acquisition costs, Vanpoucke suggests.
As well as the aviation industry’s recovery from the ravages of the pandemic, there is another big driver of demand for new GSE: the rush towards the decarbonisation of ramp equipment that is a feature of so many aviation markets around the world.
Operators are looking to move away from diesel GSE to hybrid or battery-powered equipment, spurred in their efforts by changing regulatory environments and financial incentives, as well as from the requirements of their customers and their own desire to minimise their harmful emissions.
TCR can support GSE operators’ transition to cleaner equipment, including by means of programmes that allow customers to exchange older, polluting diesel equipment for greener models.
Meanwhile, macroeconomic factors are also making large-scale acquisition programmes harder to finance, thus supporting the move towards the rental/lease alternative. Rising interest rates around the world are making the cost of borrowing that much higher, for example.
TCR’s maintenance provision as part of its full-service rental offering is also particularly attractive at a time when so many operators have cut back on staff and have looked to outsource non-core functions such as maintenance and repair of equipment. The switch to electric GSE may require new skills that many operators’ own maintenance workforces don’t have, representing another reason to outsource.
The gradual move that the industry is seeing towards GSE pooling at some locations is yet one more driver towards outsourced GSE operations that can be flexibly financed and that enable flexible fleet management, Vanpoucke observes.
The trend towards outsourcing and leasing in preference to purchase is likely to be a long-term trend, he opines. Companies tend to move from CAPEX to OPEX (capital expenditure to operating expenditure), getting liabilities off their balance sheet, rather than the other way around.
Schönefeld, Germany-based HiSERV is another big player in the GSE leasing/rental business. Like TCR, it too is supporting the industry’s move from diesel to electric GSE.
Managing director Roland Ückert informs that, during the Covid crisis, HiSERV invested in new green GSE, a strategy that has proved successful.
When ground handlers and airports, as part of their ramp-up of services post-pandemic, requested additional GSE, HiSERV was able to offer equipment as appropriate, he says.
“Of course, recent times have also been challenging due to extended supply chains and the [limited] availability of raw materials. These factors resulted in longer delivery times for new GSE as well as for technical spare parts. As HiSERV not only offers GSE but also workshop services, we have noticed price increases and long waiting times.
“Nevertheless,” Ückert continues, “we have expanded our presence in Europe, increased our GSE fleet by up to 5,000 units, gained new clients and deepened our partnerships with existing customers.”
HiSERV is currently investing in a completely new workshop at a site close to Leipzig, Germany – described by Ückert as “the perfect location in Central Europe”. The site is outside an airport security area, “which is a great advantage”.
The workshop will cover an area of 12,600m2 and will include an office building, workshop sheds and additional maintenance areas, as well as a vehicle wash. The full range of maintenance services will be available to cover the whole HiSERV GSE fleet for its customers and also for other third parties.
Wet or dry
HiSERV offers both dry rental and full service rentals. In the dry rental option, the customer rents only the GSE needed. The client pays a fixed price per hour or per month, depending on customer needs and wishes. In its full service rental option, HiSERV takes care of the maintenance and management of all rented GSE as well.
The service package may also include real-time usage tracking and fleet management. The company can tailor the service package to meet clients’ different needs.
Additionally, at some airports HiSERV is working with GSE pooling. Ground handlers are using units alongside other operators at a given location. This saves space and costs and ensures optimum utilisation of the units, Ückert points out.
Like Vanpoucke at TCR, Ückert points to high demand today for leasing and renting of GSE, especially green and eco-friendly GSE. “Our main market is Europe, and we will focus and strengthen our presence here,” he continues.
“We are always focused on the needs of our customers and provide not only GSE rental. Our additional services such as smart fleet management, smart training, smart charging and workshop services help our partners and customers to optimise their GSE fleet and save resources in the long term.
“We see the problems of our customers and assist them proactively, rapidly and flexibly – and here we adopt a holistic optimisation approach. It’s not only about GSE rental, it’s all about the whole GSE fleet development, where we can assist and achieve success together.”
Ückert goes on: “When analysing GSE via our telematics base, HiSERV provides consulting in order to make the GSE usage transparent.
“Smart fleet management is not only a system, it’s a general solution. The advantages for customers are easy to explain: reduced overall costs, improved GSE efficiency, higher safety standards and reduced ground handling delays, increased GSE availability and optimisation of a whole GSE fleet,” he concludes.
On the up
Aviaco GSE offers new and used GSE for sale but is perhaps best known as a well-established specialist in the leasing of all forms of GSE. And its leasing business is very much on the up right now, confirms CEO Danny Vranckx.
In fact, recovering from the ravages of the impact of Covid-19 on the aviation sector as a whole and the GSE business as a result, the company is seeing demand for its new and refurbished GSE now very much “back up to full speed again”, he informs.
Its workshop in Spain is seeing more and more work – and Aviaco offered to support any of those ground service providers (GSPs) involved in the big tender put out by national airport operator Aena for handling across the Spanish airport network.
Meanwhile, business is growing at Aviaco’s Amsterdam facilities as well and, as reported previously in this magazine, Aviaco is now offering diesel GSE refurbished to battery-powered format as a special product line, working in collaboration with XYZ Dynamics of Eindhoven in the Netherlands.
Tow tractors, belt loaders, passenger stairs and narrowbody pushback tractors either are already or will soon be available as refurbished electric GSE. The benefits of conversions from diesel to electric for GSE are many, the two partners stress, not least in savings in capital expenditure and operating expenditure, the prolongation of GSE’s useful lifetime and the rapidity of the sort of zero-emission fleet that is so attractive for operators today.
Aviaco showed off a converted narrowbody pushback at the GSE&RAMP-OPS conference and exhibition in Seville in June, promoting this popular new offering from the company.
But its leasing/rental propositions are proving popular for all sorts of GSE, Vranckx asserts. Whether it be operational or dry leases, short-term or long-term rentals, demand is rising, he says, driven by GSPs’ need to handle the post-Covid aviation sector recovery while they are still short of cash for GSE fleet acquisition programmes.
“Leasing is a big focus for us right now,” says Vranckx, “and we expect to see significant expansion in our business in the near future.”