The rights and wrongs of pooling GSE have long been a controversial topic for discussion, but the idea is now starting to become a reality at some major gateways
One of the pioneers in the effort to introduce airport GSE pooling has been the UK’s biggest and busiest air gateway, London Heathrow International Airport. And leading the efforts of Heathrow Airport Limited (HAL) in this area has been Nick Platts, now the airport operator’s head of cargo but – for the three and a half years leading up to May 2015 – its head of ground handling.
It was in this latter role that Platts joined the airport in January 2012 and one of his first decisions was to take a strategic view of what the optimum ground handling environment at the airport might look like. He talked to the numerous handlers working at the airport as well as other relevant individuals active there and, by December of that year, was able to make four wide-ranging recommendations for improvements that should be made to that environment. Those four recommendations – including one that there be clearer management of ground handling service provision – were universally accepted, and Platts was tasked with delivering on them.
The large number of handlers – nine at that point – operating at Heathrow has long been seen by many, if not most, as a problem – an impediment to efficient operations on the ramp. But Platts is clear on this: he does not agree. The models run by the operator show that decreasing the number of handlers active there wouldn’t necessarily improve efficiency or safety (not that that could be achieved by the airport operator anyway, given UK law on free competition); instead, the key is to have closer management of resources and less equipment on the ramp. “It’s not about the number of handlers, it’s how they work together,” Platts insists.
Thus, the option of GSE pooling was soon front and centre in his mind. Moreover, some of the handlers were bringing the issue of pooling up themselves. Pooling was certainly seen as a viable option by more than one of those service providers, he recalls.
Those same models run by HAL showed that equipment pooling could lead to a reduction of GSE on the ramp of some 30-35%, a reduction that could surely have a highly beneficial effect in terms of both improving safety and reducing costs. As a result, towards the latter part of 2013 Platts was recommending a move to GSE pooling.
Moving forward
The airport operator and airport handlers discussed how this might take place, as well as involving equipment providers such as Brussels-headquartered equipment supplier TCR. By the end of 2013, it seemed clear that pooling was something that could be done and that would have a beneficial effect, Platts remembers. Everybody wanted to test the concept before plunging in headfirst, however, so preparations were made for trials to begin by the end of that year (a new Ground Operations License, or GOL, was also introduced on 1 April 2014, replacing the old Ground Handling License, to support the airport’s efforts to streamline operations on the ramp).
“The T4 (Terminal 4) community put their hands up, happy to conduct the trials,” Platts says. “And it was the handlers that guided us during the tests.” The handlers suggested that air stairs be the focus of the initial trials, there being less risk of a significant impact on operations should anything go wrong.
The trials of pooled air stairs lasted six weeks, from November 2014 to January 2015. The stairs were provided by TCR, modified to meet the needs of the various handlers involved (TCR was chosen from two suppliers who had offered to support the trials). There were a couple of teething problems for handlers unfamiliar with the stairs provided, but nothing significant, Platts reports.
Indeed, the criteria of success laid down before the project got underway – that there be no operational delays caused by pooling and that savings be realised, for example – were universally met, he observes. The stairs were equipped with telematics, so they could be tracked, and it was found that the pooled equipment was used efficiently, with utilisation rates improved. Average running costs over time were lower than had been the case previously and no operational delays were caused. Such was the success of the experiment, Platts says, that the handlers involved (all the ground service providers active at T4 at the time took part) wanted to extend the trial period beyond January.
The ground service providers worked well together, while TCR provided a level of oversight to monitor ongoing performance. The number of stands covered by the trial also extended as the tests went on, a reflection of the success of the experiment in sharing equipment.
The following couple of months were spent digesting the TCR figures and feedback on the trials, before Platts could report to the pooling steering committee, which includes senior managers from the Heathrow handlers (a subordinate working group takes in the technical guys looking at the detail of every challenge).
The rest of 2015 allowed some time for consideration of what permanent pooling at Heathrow might involve, and how it might be introduced. A number of ‘work packages’ were created – options for the degree and extent of pooling that could be executed in a phased process of introduction. The first work package, which is expected to be introduced as the first phase of the pooling process, covers equipment used on-stand during an aircraft turnaround such as loaders, belt loaders, high lifts, air stairs and other steps. Other work packages would see the introduction of pooling on other equipment, such as dollies, aircraft tugs and so on.
By the end of 2015, the airport authority could issue an RFI (request for information) to ascertain which companies might be interested in supplying the pool. Eight responses were received and the next stage, at the beginning of this year, was to issue an RFP (request for proposals). From the five responses to the RFP, Heathrow chose three of the five interested parties and asked them to provide a more detailed tender.
HAL had hoped for those tendering to offer guidance on the exact nature of how pooling might be introduced and executed, Platts says, and that flexibility – combined with the complexity of the issues involved – created some problems and difficulties in comparing the three submissions. As a result, he notes, the airport authority chose to write a more closely defined set of requirements for those three companies to tender on, and asked them to resubmit their bids. That they did, all in the spring of this year. The hope is that a decision can be quickly made on choosing a winner, and the pooling ‘go live’ date is currently scheduled for January 2017.
Pooling parameters
The Heathrow pool is to take in all eight ground service providers operating at the airport’s T2, T3 and T4 facilities. Key performance indicators have been agreed for the pool supplier, including some conditions that have to be fulfilled. The latest expectation is that pooling will allow a 26% reduction in the equipment types involved, not so far off the 30% figure estimated a few years back. Some equipment types might actually increase in number on the ramp, Platts confirms, but the majority of equipment types will be rationalised in the pool.
The benefits will be great, on safety and efficiency and savings, he believes. The equipment will be new or nearly new, with the latest safety features and ergonomic, environmentally friendly designs.
Platts himself is now handing over to his successor, Les Freer. It will be the latter’s job to oversee the introduction of pooling on a permanent basis and, Platts admits, not all the issues regarding the execution of equipment sharing have been completely ironed out. There has been, and continues to be, what Platts describes as healthy feedback from ground handlers on the challenges of pooling, and consideration of those continues in detail.
“That collaboration (between airport and ground service providers) has worked and is working,” he says, although Platts adds that the process is now pretty much at the point where each of the eight handlers need to decide if they are ‘in or out’.
“But we know the concept works. And the handlers have invested in it and been motivated by it,” he considers. “It’s achievable and it delivers better value and a safer, more efficient and more environmentally friendly ramp environment.”
Pooling is undoubtedly a complex process at a multi-handler airport, he admits, but Platts has always argued that Heathrow should retain an oversight role with regard to pooling, enabling the airport authority to address any handlers’ concerns or problems as they arise. And he is certainly of the belief that the handlers have worked well together and generally supported what is “right for Heathrow”.
There’s been “good discussion, good engagement and this is a good example of how we have all worked together for our mutual benefit”, he concludes.
dnata offers its support
One of the big supporters of pooling at Heathrow is dnata UK, an operation within the Dubai-headquartered aviation services provider that forms part of the Emirates Group.
The reduction in equipment on the stands that pooling allows eases congestion, frees up the apron and is good for visibility and safety, says Steve Szalay, vice president — ground services at London Heathrow for dnata. Indeed, he observes, GSE pooling seems like a ‘win-win’ situation. The potential benefits are many and they are fairly obvious, he points out, most noticeably and most valuably in the positive impact on safety on the ramp.
But it’s not as simple as all that, of course. The difficulty lies in the implementation. “We’d like to see Heathrow run it (GSE pooling),” he says, “such that the equipment becomes like other airport infrastructure.” As we have seen, however, that doesn’t seem to be the airport operator’s preferred option.
Any transition to GSE pooling amongst the service providers at Heathrow has got to be very carefully handled, Szalay points out. A move by the many handlers at the gateway (all eight of them) means to some extent a loss of ‘sovereignty’ for each of them over what is currently their own equipment; as such, their equipment fleets partially define their individual offerings, and differentiate them from their competitor handlers.
The effect on handlers’ costs also has to be carefully studied. While it would seem, prima facie, that total costs must come down through the fact that less equipment will be in use, the effect on each individual’s cost base might be very different; there is also the cost of the GSE pooling management to be taken into account, whether it be a private sector service provider doing it or an airport operator such as HAL performing the role.
At the moment, it appears that Heathrow will begin GSE pooling, if it can convince the handlers that it has successfully addressed the challenges and potential pitfalls, in a very measured way. As Platts describes, the move to the first phase of pooling of on-stand equipment is planned for early next year, before other equipment pooling is introduced (the benefits of sharing comparatively large numbers of equipment types, such as steps or baggage trolleys, are certainly more apparent – and the difficulties less challenging – than for equipment that is more expensive, available in lower numbers and used less frequently, such as tugs).
At dnata, the hope is that pooling can become a reality sooner rather than later, and on as comprehensive a basis as can be made to work. “We’re very much onside with this and playing a full part in it,” Szalay confirms. HAL has already done much to bring the airport’s handlers together, he notes, and the trial has shown that they can work together in GSE pools, though they remain highly competitive in regards to all other areas of their business.
One area to address before any comprehensive go-live would be training. All the handlers involved must be fully conversant with all the equipment they might need to use. Another issue that Szalay points to is that GSE pooling makes it easier for other service providers to potentially enter the handling business at the airport, because they wouldn’t have to incur the same sort of equipment set-up costs that any new entrant currently has to finance.
And a final issue concerns how individual handlers’ use of equipment might be charged for. Will it be on a per-use or individual aircraft turnaround basis, or perhaps according to the amount of time it spends with a handler? Any damage to equipment would also need to be paid for by whichever handler is responsible for the misuse – how to ensure responsibility is correctly apportioned will require knowledge of which handler has which equipment at any given moment, as will most charging methods. Telematics can help here, of course.
GSE pooling is “a brilliant idea, the devil is in the implementation”, Szalay insists. But all airports should be looking at it and considering the potential benefits, he argues. It needs the airport operator to provide the initial impetus and the co-ordination of what are competing businesses, of course, in the way that London Heathrow has gone about it. It’s not an easy process, but it’s one that dnata certainly believes can reap real rewards in terms of efficiencies, reduced congestion and improved safety on the ramp.
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Copenhagen considers its options
Heathrow is by no means the only operator to have considered the potential benefits of GSE pooling – numerous other airports around the world are investigating the possibilities or have even begun GSE sharing schemes. “Copenhagen Airport is very interested in GSE pooling,” for example, says the operator’s strategy and change manager, Mie Rajcic.
She continues: “We see a huge benefit for all partners in a pooling concept. Because the airport is very compact it would solve some of the space issues we all experience every day. Today, each handler requires space for its GSE near the stand. With three handlers operating at the main terminals, the amount of GSE is vast. It is not only the GSE used for a specific handling but also space for GSE needed for a later handling.
“Pooling would mean allocating GSE to each stand where beneficial, enabling the preparation for the turnaround process to become easier. Moreover, it means an overall reduction in the amount of equipment necessary in the airport.”
As a result: “The airlines will benefit as the ground handlers will be ready for the aircraft when arriving at the stand, not having to spend time chasing GSE.”
Moreover, Rajcic says: “Personally, I believe that allocating GSE to stands will have a positive influence on the culture here. If anything has a place to be put when not in use, chances are that things will be more organised and structured. This will most likely affect the working culture on the apron and support the turnaround process.
“Plus, in terms of investment, sharing GSE will reduce the capital needed to buy or lease GSE, a change which would benefit all handlers.”
The biggest challenge to achieving GSE pooling at Copenhagen would be cultural in nature, Rajcic believes. As Szalay also outlined for handlers at Heathrow, GSE has been an element of Copenhagen’s ground service providers competing effectively when trying to attract new airline customers – and with GSE pooling the ground handlers will need to find other ways of differentiating their business. “Changing this perspective can be quite challenging – the pooling concept embraces the thought of sharing and co-operation and not competition,” Rajcic notes.
Looking to move forward on pooling, Copenhagen Airport has already engaged handlers in its thoughts and plans. Currently, two of the handlers at the gateway lease GSE from TCR, so a small first step forward has been taken, although they are not sharing equipment.
“I believe that we need time to get used to the thought,” Rajcic says. “We also need to overcome some obstacles in terms of trusting that GSE will actually be at the stand when needed and that it will be operational. Additionally, the issue of damages and insurance would need to be addressed as well. Both elements can be solved with technology, thus the cultural perspective is more profound. “
The potential benefits are significant, however. “I definitely believe that pooling is a critical issue, especially at compact airports where traffic is growing and therefore GSE numbers as well. It requires dedication and effort – and time to find common understanding. In Copenhagen, the airport is not a part of the GSE agreement, as contractual issues should be negotiated among the handlers and maybe a third party like TCR. Despite this, the airport has initiated the dialogue as an objective partner aiming at creating benefits for all.
“Generally, we are seeing a trend towards sharing within different businesses. We rent out cars, houses and so on when we don’t use them – so why not share GSE among handlers?” she concludes.
