Looking forward to the rest of 2013, airports and the aviation industry are facing challenges across the board from the chilly economic climate and the oft more than chilly real climate. Nevertheless, in North America, companies in the vital aviation ground services equipment and service business are getting on with the job
Headquartered in Plainview, New York, Fortbrand Services Inc has been in the business of selling, buying, leasing, financing, renting and maintaining new and used aircraft ground support equipment for over 25 years.
Its core business lies in the provision and servicing of short-term rentals and long-term leases of aircraft GSE throughout the aviation industry. In addition, the company offers additional services such as equipment appraisals and consulting, and acts as financial advisor to businesses looking to sell or buy aviation-related operations. Fortbrand also acts as the exclusive North American distributor for airport and airfield maintenance equipment, including Vammas snow removal vehicles and the Beam A8000 Multi-Task Airport Service Vehicle manufactured by Beam AS of Them, Denmark.
Fortbrand’s GSE fleet on offer to operators – new and used – includes air starters, de-icing trucks, tow tractors, ground power units (GPUs), baggage carts, mobile stairs, belt loaders and more. Peter Stearn is Fortbrand’s executive vice president and he shared his views on the North American market today with Airside International. “The market has been relatively steady over the past 12 months, without any significant upward or downward swings,” he considers.
“The major carriers are continuing to manage their way through merger integrations and trying to optimise their fleet configurations. As ground handling companies win new contracts, they are trying to manage their costs as much as possible, so are often looking for used equipment or to procure equipment via operating leases or seasonal rentals.”
Looking forward to the rest of 2013 in terms of the firm’s needs and investment plans, Stearn explains: “At the moment, I do not see any major changes for 2013. Fortbrand’s greatest challenge is identifying good quality, late-model, used equipment to add to our inventory. We always have our feelers in the market in order to obtain such equipment and, occasionally, are able to acquire such equipment via auctions or negotiated transaction from entities that are exiting the ground handling business.”
Handling the pressure
With its corporate headquarters in Jamaica, New York, Cargo Airport Services (CAS) operates at many major North American airports. Founded in 1998 and commencing with a 5-year contract with KLM at JFK (New York) and IAH (Houston) airports, the company expanded quickly. CAS claims to be the largest ground handler in the US, serving 84 carriers in 29 facilities at 14 international airports.
While being committed to technology and innovation, CAS is also focused on attention to detail, including strategic communications with its customers. “We handle cargo and cargo only, so we excel at cargo handling. Through years of experience we’ve learnt a lot,” remarks CEO Michael Duffy.
Commenting on CAS’s “steadfast transition capabilities and post-start-up commitment” to client carriers, Duffy adds: “We believe true relationship is born from collaboration, so we actively encourage customers to have direct contact with the people doing the work.” Even in difficult economic times, CAS’s growth looks to be continuing. In the late summer of last year, for example, it was awarded the cargo warehouse handling contract with Emirates SkyCargo at Dulles International Airport (IAD).
John Cardiello is CAS’s assistant general manager at building 261 at JFK International airport and he is upbeat about the future. “I believe the current market in North America is stable right now, but I feel there is still room for growth,” Cardiello reports.
“We are always looking for new business and 2013 is no exception. And if we are able to succeed we will need to expand our current GSE fleet,” he observes. “We are also looking to expand our business to South America.”
Yet, according to Cardiello, CAS’s greatest challenge right now is “being able to provide our customers with the very best equipment and the best people to maintain such a large inventory. We are constantly evaluating and upgrading our equipment to ensure we keep up to our customers’ demands and high standards.”
Competition
Worldwide Flight Services (WFS) is another handler that has a big say in the GSE market in North America and just one of CAS’s many competitors on the continent. Moreover, it provides a broad array of ground services in over 100 of the world’s major airports.
According to a spokesperson, WFS is continuously integrating highly developed information technology tools into its operations in order to keep the company at the forefront of IT developments, thus enabling “improved and expedited communication and business processes.”
To get the company’s current take on the North American GSE market we spoke to Scott Whitfill, WFS’s director of maintenance. “The technology required to meet the ever-demanding reduced emissions standards for GSE continues to drive its cost up. As a result, the ability to inject new GSE into a company’s fleet (has become) increasingly difficult,” he notes.
WFS’s greatest challenge at the moment, Whitfill believes, is “meeting the significantly reduced emissions standards that are being imposed on the GSE equipment industry when the manufacturers are barely, if at all, able to support that mandate”.
And, he continues: “There is no question that operating with cleaner and greener equipment is something that we must do. To this end, WFS not only acquires equipment that meets all the latest emissions standards but has also taken steps to build in reduced emissions and even zero emission power for equipment that gets a zero-time rebuild.
“However, these challenges have also helped WFS continually think out of the box and challenge how things are done. For WFS, one example of this was the decision by senior management to establish a specific location for repair and rebuild of GSE,” says Whitfill. “Also, because there are good vendors available, WFS outsources its GSE maintenance at about one-half of its locations as a way to be more competitive.”
Going forward, Whitfill explains: “WFS is focused heavily on ensuring that all equipment is utilised to its fullest. This also includes investing in the heavy repair of surplus GSE as well as the zero-time rebuild of GSE as a way to inject new life into the fleet and create cost savings through things like reduced maintenance and lower fuel use.”
Furthermore: “While the WFS Rebuild facility is capable of many things, there are still certain types of equipment that do require upgrades. For example, older GPUs have a hard time operating on today’s newer aircraft. Therefore, upgrading hi-tech equipment in the fleet, at a responsible pace, ensures equipment is available at the right cost and the right time.”
No-frills GSE
With its corporate offices in Zurich, Switzerland, Swissport is a major international player in the provision of ground support services. The company offers ground services for around 116 million passengers annually and handles 3.5 million tonnes of cargo operating out of over 100 warehouses on behalf of approximately 650 client companies. Swissport’s workforce of around 39,000 people working at 192 airports in 38 countries on five continents generates over US$2 billion in annual consolidated operating revenue for the company.
Swissport’s GSE Maintenance and ULD (unit load devices) business unit is active at 20 airports across five countries, operating a GSE fleet in excess of 5,000 units. The business unit performs scheduled maintenance, unscheduled maintenance and complementary services such as engineering services, the phase-in and phase-out of equipment, material handling, warranty administration, in-shop operation training, field or tarmac use of equipment and the implementation of strategic asset management tools.
Peter Speck is Swissport’s vice president and head of corporate supply and GSE maintenance management. He considers that the North American handling business remains a “very competitive market with a high number of players”. There is “still a disproportionately high (volumes of self-handling among domestic carriers”, Speck points out.
In terms of GSE: “In order to cater to such a market, manufacturers need to provide very basic, no-frill, no-engineering-gimmicks GSE that is dependable and gets the job done. Additionally, manufacturers who provide attractive R&M (repair and maintenance) contracts will be the most competitive in this very competitive market.”
Going forward, Speck says that Swissport this year “will continue to focus our efforts on cost leadership. We will stick to our continuous replacement plan and seek possible opportunities for growth to secure and extend our worldwide number one position.” He identifies Swissport’s greatest current challenges as relating to the “dynamic market environment and challengingly short start-up times”; all that paired with a limited number of suppliers. “We overcome these conflicting factors by standardising GSE and entering strategic partnership with key suppliers,” Speck highlights.
Trends
A constant theme offered by these front-line GSE service companies seems to be for equipment that is robust with no frills, coupled with the need to meet higher environmental standards. A demand for simple, hi-tech ruggedness seems to be the order of the day.
