The rates of growth of air transport and air cargo in the Middle East and Africa have tempted a number of handling companies to look at setting up shop in one or both of these regions
Worldwide Flight Services (WFS), for example, now offers a cargo ground handling service in Johannesburg and Cape Town and has signed a partnership to provide cargo and possibly ramp and passenger services in Dar-es-Salaam. It is also working on creating a partnership in Nairobi. After these deals have been finalised, it will look at more stations in West and East Africa. Plus, in the Middle East, WFS has applied to become a second operator in Saudi Arabia and in Iraq.“We’ve been able to expand into Africa because of the opening of the market (there),” emphasises Barry Nassberg, group chief operating officer. “Airports are realising that they need to offer as close to a world standard handling service as possible. They can no longer say ‘this is Africa and this is what you can expect: it’s as good as you’ll get’. Airlines are unwilling to accept that attitude or invest a lot in their own handling staff.
“There is also huge investment in Africa as a whole, which forces the development of airports. Lack of infrastructure will hamper development and airports need to keep pace. Since African destinations cannot always provide the service on their own, they welcome foreign investment from handlers such as ourselves.”
The whole regions presents major challenges to ground handlers, although South Africa operations and infrastructure are seen as being more like those in Europe. For a start, most new entrants there are encouraged to set up joint ventures, rather than set up shop on their own. But finding the right partner and encouraging them to work to world standards isn’t always easy.
“We have to import ground service equipment, too,” Nassberg comments. “And maintenance can be difficult as, in many cases, the local companies do not have the expertise or the parts; we need to import a full GSE maintenance operation and then bring in people to train the locals. We need our own storage structure, as we can’t rely on having an essential part delivered within 24 hours. All this means a lot of commitment and investment for handling companies. It’s not just the cost of setting up: it’s what happens next.”
Doing things the right way
Changes to processes and procedures may have to be made, too. For example, how cargo is sheltered overnight, how warehouses are cooled and cleaned. Extremes of temperature can be a challenge, but the problems are not, says Nassberg, insurmountable.
Handling companies trying to enter the Middle East market will find there an even more complicated one than that seen in Africa. There is still a highly restrictive environment, with most airports supporting a monopoly position of just one handler. “Saudi Arabia and some other countries are attempting to open up the market,” Nassberg notes however. “Saudi published a global tender months ago in an effort to bring in a second operator, but it has not moved beyond pre-qualification stage. Iraq also put out a tender for exclusive rights to three out of four of its main airports; that, too, is still in pre-qualification stage. Iraq needs an international consortium to meet its requirements, as it is building the market from almost nothing.
“Anyone wishing to go into the Middle East is highly advised to work in partnership with a local company, though. It would be hard to see how an outside operator could manage without local knowledge,” he advises.
“We expect to have an active operation in the Middle East within a year or so, but we are looking at ancillary opportunities – providing support services in the terminal, for example, for baggage, VIPs, lounge services, wheelchair services, and so on – as we are unlikely to be able to go in to cargo or ramp handling in this region. Once you’re on site and people know you, opportunities will flow from that relationship,” Nassberg concludes.
