Looking Ahead

posted on 6th April 2018

Airside International talks with Hemant Mistry, director airports and fuel at the International Air Transport Association (IATA) about the challenging future facing the world’s big air gateways.

Q. DOES IATA WORK CLOSELY WITH THE AIRPORTS AND THEIR REPRESENTATIVE ASSOCIATIONS? WILL YOU BE LOOKING TO INCREASE COLLABORATION WITH SUCH BODIES, AND AIRPORTS IN GENERAL, IN THE FUTURE?1. AS-Sum15_LookingAhead_1.jpg

A. Absolutely, we are working more and more with airports around the world on aspects of ramp safety, airport infrastructure planning, service levels and, of course, charges. We see this very much as a partnership approach where we are able to work to facilitate a better business-level relationship between airlines and airports.

In some cases this includes the development of MoU but, more often, it is simple common sense for the parties to come together to determine what can best achieve sustainable traffic growth. In the same way, we are working with Airports Council International (ACI) on various initiatives to improve airport/airline processes, including aspects of security, IT and ground operations. I can only see this collaboration increasing as both airlines and airports are mutually dependent on each other for business success.

Q. DO YOU FEEL THAT AIRPORTS ARE, IN GENERAL, PROVIDING THE RIGHT ENVIRONMENT FOR THE OPERATIONS OF THEIR CUSTOMERS – IN OTHER WORDS, THE AIRLINES?

A. Airport environments are complex, and vary considerably across the globe. Some airports wish to control everything and provide every service, at a cost, and others just want to provide a runway. Whichever of these is prevalent, the airport needs to take an interest in, and play a role in, engaging with its airline customers to determine service needs. These impact their image as well as the airlines’.

Airlines suffer from a lack of provision for ground handling choice in some places, leading to monopoly supply. Any restriction of competition can lead to a distorted market, and that does not help airlines or passengers.

Plus, technology is an area where airlines and airports can do more together – A-CDM (airport collaborative decision making), or surface CDM in the US, is one area where collaboration can help performance and drive benchmark statistics.

Q. ONE CHALLENGE FOR MANY AIRPORTS THAT MUST BE A FRUSTRATION FOR IATA AND YOUR MEMBERS IS SHORTAGE OF CAPACITY; WHAT DOES THIS MEAN FOR YOUR MEMBERS AND HOW CAN WE, AS AN INDUSTRY, WORK TO SOLVE THIS PROBLEM?

A. We need to continue to work actively with airports to stay ‘ahead of the curve’.  IATA has started to develop a predictive tool that helps identify airports that will be running out of capacity well before the cracks start to show. Our Airport Capacity Database (ACD) is helping us identify which airports in which regions are likely to run out of either runway or terminal capacity (or both) in the next ten years so that we can prioritise our collaborative efforts with these airports. Together with airline colleagues we are using the ACD to focus attention on critical airports and to influence affordable and functional capacity development as much as possible before a critical capacity crunch is reached.

Q. FEWER AIRLINES THESE DAYS ARE SELF-HANDLING ON THE RAMP. IS THIS A TREND THAT YOU BELIEVE WILL CONTINUE AND DO YOU THINK THAT IS A GOOD THING?

A. I think the out-sourcing trend will continue. It goes hand-in-hand with the growth of the multinational ground handling companies that are increasingly in a position to offer their services to airlines at most – if not all the airports – an airline flies to. While this makes it difficult for the smaller, local ground handlers, it does bring with it the potential to globalise expected levels of service and safety, which is a good thing.

It is precisely this development that has initiated the drive from IATA to introduce the IATA Ground Operations Manual (IGOM) and to make its implementation a priority for IATA members that see the benefits. Correctly handled, the trend of third-party handling can bring much in the way of benefits (such as consistency of service, dissemination in the use of best practices in ground handling, and greater commonality of handling procedures for the same aircraft types), while mitigating the negative aspects.

This is also why IATA has integrated its IGOM, safety audit for ground operations and ground damage database projects as a comprehensive approach to dealing with all aspects of ground handling for the benefit of the industry as a whole – not just for the airlines.

Q. HOW HAS THE RAPID PROLIFERATION OF LOW-COST CARRIERS (LCCS) AFFECTED THE AIRLINE BUSINESS, AND IATA IN PARTICULAR? THEY MIGHT FACE COMMON CHALLENGES, BUT THEY ALSO OPERATE ON SOME QUITE DIFFERENT BUSINESS MODELS.

A. Generally the difference in business models does not significantly impact the airport’s physical requirements. There are no ‘low-cost’ runways, taxiways or aprons. Where differences might occur, for example in the terminals at aircraft boarding gates, IATA recommends that airports design these facilities such that they are flexible and can be adapted to legacy carrier operations as well. There are already examples where airports have torn down their ‘customised’ low-cost terminals to replace them with facilities that can adapt to and accommodate all airline operational models.

Having said that, there have been positive impacts the LCCs have brought to ground handling. A huge part of the LCC model is about slick timing, quick turnarounds and efficient use of the available resources. These operations have taught ground service providers how to look at their operations in detail to see how best to optimise them in terms of equipment and staff, as well as the timing and co-ordination optimisation of all activities on the ramp. By default, these operations will rub off on the non-LCC operations too, as it is just not efficient to have two sets of services.  This should have the effect of streamlining even the non-LCC operations and with it, enable better, more efficient performance for a lower price, or for a better and more detailed pricing model.

If nothing else, the LCCs have forced the ground handling industry to look at all their activities and operations from the point of view of what is essential and what is just a ‘nice-to-have’, as well as to demand an innovative and out of the box mind-set.

Q. WHAT ARE THE MAIN ISSUES AND CHALLENGES FACING CARRIERS TODAY? HOW CAN IATA HELP AIRLINES TO ADDRESS AND OVERCOME THEM?

A. Our airline members state their concerns as “capacity, capacity, capacity”. But that means capacity as the passenger and cargo markets define it, and at an affordable cost. Issues persist in the air and on the ground. Ongoing collaboration with governments, regulators, trade associations and the air traffic control and airport community is the only way that the aviation community will be able to address these concerns.

The concept of ‘Constructive Engagement’ is being promoted as a significant way forward. More regulators, governments and aviation agencies need to recognise and adopt the basic business virtue of engaging airports with their business partners; the airlines also have to agree on the fundamentals of infrastructure investment, charges and service levels.

From the ground handling perspective, airlines are increasingly focusing on their core expertise and therefore facilitating the growth of new enterprises to deal with so-called peripheral aspects such as ground handling, catering, auditing, fuelling and so on. IATA’s role is increasingly that of moderator between airlines and the various service industries that have come into existence as a consequence of what the airlines have been doing in optimising their business. IATA’s role is to represent the overall airline point of view and to bring the parties together for the benefit of the industry as a whole.

Q. ARE GOVERNMENTS GENERALLY DOING ENOUGH TO SUPPORT THEIR NATIONAL AVIATION INDUSTRIES, WOULD YOU SAY? ARE CARRIERS (AND AIRPORTS) BEING HIT BY OVERLY HIGH TAX RATES, FOR EXAMPLE, OR COULD THERE BE MORE PUBLIC SPENDING ON AVIATION INFRASTRUCTURE THAT WOULD PROMOTE THE INDUSTRY AND THEREBY FUEL ECONOMIC GROWTH?

A. In some cases there are punitive taxes that stifle aviation growth. The problem is that this also then restricts the economic benefits aviation generates – benefits that often far outweigh any revenues from taxes. We urge governments to review such policies and consider what can be done instead to stimulate aviation growth and connectivity.