Andreas Vassilaros, projects director and a member of the Executive Committee of Stockholm-Arlanda, Sweden-headquartered handler Aviator, describes his company’s recent rapid growth
Aviator was only formed five years ago when, in December 2010, it acquired Sweden’s Nordic Aero and Norway’s Roros Flyservice and Norport Ground Handling. Since then, its expansion has been rapid, featuring further handler acquisitions (the Danish service providers Novia and Sturup Handling were snapped up) and the takeover of other handlers’ services at gateways across the Nordic region and in the UK.
Its diversification and growth in the UK market has been swift. The latest addition to its British footprint was a deal announced in August this year that will see Aviator ground handle for British Airways (BA) at London Gatwick from November. It is also due to begin ground handling for BA at Newcastle in October (a deal announced in June), while Aviator already handles the UK flag-carrier at Helsinki International in Finland.
Expansion at Gatwick comes hard on the heels of some other new business won in recent months by Aviator in the UK. Its Manchester operation got off the ground in March with Thomas Cook, while Germania will be handled here from September as well. Then, even more recently – in June – it was announced that Aviator would be handling Monarch Airlines at Birmingham International from the following month.
There are certainly differences between operating in the UK and handling in Aviator’s home market in Scandinavia, Vassilaros notes. Primarily, in Britain there isn’t the ubiquitous SAS Ground Handling – complete with its innate advantages of economies of scale and having the major customer of SAS on its books – with which to compete. “The UK market is much more open,” he points out, although there can also be the problem of perhaps too many handlers all operating at the same British gateways.
Another benefit in the UK market is the greater likelihood that a handler can compete on quality as well as price, Vassilaros suggests. While some airlines and some ground handling agents continue to struggle despite the upturn in the industry, there is greater awareness amongst carriers in the UK aviation business that quality is just as important as price when it comes to handling – and rock-bottom pricing on the part of certain handlers may well have implications for the quality of their service.
Despite the recent rapid development of its UK footprint, Aviator is keen to win more business in Britain. To do so, the handler will rely on its chosen strategy of providing high-quality, reliable services, Vassilaros says, alongside close working collaborations with all its customers.
Currently providing services at 23 airports between London and Helsinki, the priority is to be the number one or two handler in any market in which Aviator operates, he continues, so any growth into an entirely new geographical market would have to be done right, he insists.
There are other ways to grow, of course. Aviator is looking at alternative ways it can leverage its experience and know-how to offer other aviation services to existing or new carrier customers. More airlines are looking to outsource tasks such as ticketing, for example, areas in which Aviator can take over from a carrier seeking to concentrate on its core business of flying passengers (and possibly cargo).
The handler can also grow through acquisition. Certainly the process of consolidation amongst third-party handling services providers has not yet reached its natural conclusion, Vassilaros considers. The recently announced changes in ownership for WFS and Swissport are not going to be the last of such developments, he says, as equity companies acquire handlers in order either to combine their operations or to merge their operations with those of other aviation service providers. Aviator, itself majority-owned by Accent Equity, certainly would not rule out any further acquisitions of handlers that would fit into its business model.
Supporting the expansion of its operational footprint has been an increase in the size of the Aviator GSE fleet at many of its stations. A wide range of transporters, belt loaders, deck loaders, dollies and other GSE has been acquired – and in a range of ways. In fact, it’s the handler’s strategy to mix and match its procurement methodologies, Vassilaros observes, either purchasing or leasing as required.
In regard to the latter, TCR has acted as a key partner in the UK especially. Leasing equipment through TCR has offered flexibility and cost-effectiveness, Vassilaros says. The equipment doesn’t appear on the company’s balance sheet and can be leased for only as long as is required.
Aviator can also move its GSE across its station network to provide operational flexibility, but there can be problems with this. For example, a Scandinavian winter imposes challenges on GSE that not all equipment is able to meet. Emission requirements at Scandinavian airports are also exceptionally tight, sufficiently stringent that large amounts of GSE based elsewhere might not be able to adhere to them.
One of the trends that Vassilaros has identified in the ground handling business that gives him some cause for concern is the growing propensity of airlines (the trend seems to perhaps have started with low-cost carriers and moved across to some of the more traditional, full-service airlines) to move away from standard ground handling agreements – and especially in regard to liability conditions.
Liability is of course a vital aspect of any ground handling contract. Liability in relation to aircraft damage sustained in a coming together with motorised GSE involves big money figures but the move away from standardised agreements can lead to an increase in expense for all concerned; only the lawyers may benefit as a result, Vassilaros suggests. Moreover, there can also be insufficient coverage of the risk if standardised liability clauses are eschewed.
Meanwhile, safety considerations remain as important as ever to Aviator. As such, it is currently working towards certification from the International Air Transport Association on the ISAGO (IATA Safety Audit Ground Operations) programme. It hopes to be approved during the first half of next year.