Ground Handling

Anke Diana Baumann

How about your teacher… 

 Who am I?

 Share knowledge & experience

 Asking to receive feedback from you

 I want you to take something away for your future career in aviation

 Flexible on break-times, but: full attention when classes are running

 Short Repetition beginning of each day – Recap

 In case you feel bored, it`s up to you to leave, but don´t disturb
others who want to follow, listen and learn

Anke Diana Baumann

2 Ground Services
Motivation of the students?

 What´s your background?

 Why are you here?

 Things you´d like to hear about?

 Fears & Wishes?

 Anything else….? 

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Off we go…..Goals of the course

 To understand the importance of Ground Services as a part of the

aviation industry

 To understand the regulations in the ground handling market

 To become familiar with the service package of ground services

 To understand the interests of the market participants

 Problems and future of the ground handling business

 To get an idea of the advantages and disadvantages on the

globalisation of the ground handling companies

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Sources

• IATA AHM 810 Standard Ground Handling Agreement

• European Regulation on the liberalization of ground handling markets in
Europe 96/97 EG
• Ground Handling International, Magazine and other publications
(Terminal, Executive) of the Airports Publishing Network Ltd., Magazines
• SH & E Ltd. Study on the quality and efficiency of ground handling
services at EU airports as a result of the implementation of Council
Directive 96/97 EC
• Proposal for a Regulation of the European Parliament and of the Council
on groundhandling services at Union airports and repealing Council
Directive 96/67/ec
• www.iata.org – International Air Transport Association Online-
Publications on Ground Services and Standards (IOSA / ISAGO)

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 Contents
1. Basics of Ground Handling & Services – Introduction
2. Description of the Ground Handling Market
2.1. Market size and structure
2.2. Liberalisation
2.3. Aviation Growth
2.4. Outsourcing
2.5. Standard Ground Handling Agreement
3. Technological Development & Status in the ground-handling business
4. Globalisation - How to build up a ground handling network
5. Success Factors like Key Account Management and Quality & Safety
Management
6. Preparing a Budget and Reporting
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1. Basics of Ground Handling & Services

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Ramp Safety

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Ramp Safety

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Ramp Safety

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Ramp Safety

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Ramp Safety

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Ramp Safety

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Ramp Safety

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Ramp Safety

SAFETY vs. SECURITY!

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Basics - Scope of Services

Passenger Handling / Ops Ramp Handling

• Check-in • Loading / unloading
• Lounge services • Transport baggage/ cargo
• Arrival services • Cabin cleaning
• Boarding • Push back
• Weight & balance • Toilet / water service
• Supervision • De-icing

Cargo Handling Special Services

• Cargo documentation • Snow removal
• Storage • Fuelling
• Build up / breakdown of • Line maintenance
Pallets • Baggage container
• Dangerous goods containers management
• Valuables / animals / Perishables • Transport services (crew & pax)
• Wheel chair services
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Basics – From “Ten-Miles-Out” to “Off-Block”

 Production – Chain (“A/C turnaround”)

Parallel activities desired –
time optimization

1. Pre-Services
Check-In, Flight Preparation & Editing, Service- or Ticket-Desk
Activities

2. VHF – Contact
Arrangement of Special Services requested (i.e. WCHR)
Information on Position & Airport restrictions

3. Preparation of the Apron Position (Provision of Equipment)

Disembarking (Steps / Stairs with Busses or Air-Bridge)
Unloading / Inbound Transportation (PAX/Bags/Cargo)

4. Cabin Cleaning / Catering

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Basics – From “Ten-Miles-Out” to “Off-Block”

 Production – Chain continued

5. Ground to Cockpit Communication

Pre-Briefings (Weather, Route-Map, etc.)

6. Fuelling

7. Boarding / Loading / Outbound Transportation

Embarking
Finalized Load-Sheet / Slot Allocation (can also happen earlier)

8. Closure of Holds / Doors, Clearance of Position

Push-Back / Walk-Out-Assistance / Engine Start / Taxing
Airborne
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Basics – From “Ten-Miles-Out” to “Off-Block”

 Production – Chain – Staff Parallel activities desired –

time optimization,
CON: cost!
Loading teams (incl. Team leader)
Drivers (specialised)

Check-In Agents
Ticket Agents
Load Controller
Ramp Agent
Supervisor

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Basics – From “Ten-Miles-Out” to “Off-Block”

 Production – Chain – Equipment Utilization to be optimized,

CON: trained staff to operate!

Passenger Busses – special forms, suitable for roads

Stairs – self propelled, towable, with/without roofs
Conveyor Belt
High loader – main deck / lower deck
Container / Pallet Dollies
Baggage trolley- for bulk baggage
Container transporter
Towing tractor – with / without towbar
Toilet / Fresh water vehicle
Ground Power (GPU)
Air Starter (ASU)
Special Equipment (i.e. vehicle for handicapped people)
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Basics - Ramp Handling and Equipment

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Basics – Ground Handling Activities

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Ground Handling Equipment

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Equipment

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Ground Service Equipment - 1

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Ground Service Equipment - 2

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Basics - Equipment

Prices of ground handling equipment

 Push back tractor up to 90 t mtow 140 T$
 Push back tractor up to 400 t mtow 375 T$
 Tow-barless push back up to A 380 800 T$
 Lower Deck Loader 7 t 170 T$
 Main Deck Loader 20 t 350 T$
 Equipment tractor 30 T$
 Pallet/Container dolly 3 T$
 Conveyor Belt 35 T$
 PAX Stairs wide body 100 T$
 PAX Stairs narrow body towable 40 T$
 GPU 50 T$
 Passenger bus 200-300 T$
Airport Safety = Pax Safety = A/C Safety

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Operations 24/7 – 365 days

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2. Description of the Ground Handling Market

2.1. Market Size and Structure

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Structure of Airline Costs & Development

Airline cost structure has

changed over last decade
Fuel & Oil prices crucial
Airline concentrating on core
business
GH makes up for ~20/25%

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Market Size and Structure

Independents growth substantial

Airlines focusing on core business

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Competitive landscape

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Independent providers will gain market shares

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Competitive landscape I

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Competitive landscape II

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Competitive landscape (1/2014)

•Merger & Aquisition

•Market Entries & Exits

 Boosting Competition
 Market Clearance

Name Revenue Stations Owner

in Mio. €
Swissport International Ltd. 2,780 268 HNA Group
DNATA 2,405 75 Emirates Group
SATS 1,246 43 Stock listed
Menzies Aviation 993 149 John Menzies plc
Fraport 695 1 Hessen, Frankfurt, LH, free flow
WFS 580 115 LBO France
Aviapartner 378 30 3i
Celebi ~ 300 34 Family owned
Acciona Handling ~ 250 8 Acciona Group

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Competitive landscape

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Competitive landscape

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Competitive landscape

 Air Traffic behaves cyclical & is a volatile business

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2.2. Liberalisation

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 What is Liberalisation?

LIBERALISATION …
…is any process whereby a state lifts restrictions on some private individual
activities.

…occurs when something which used to be restricted is no longer restricted

or when government regulations are relaxed.

…refers to the term most often used in relation to economic liberalization,

which refers to the reduction of state involvement in the economy but
can be used in other context as well.

…is e.g. when state owned airlines/airports are privatised.

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Liberalisation in the Ground Handling Market

EU Directive 96/67/EC Oct 15, 1996

1st January 1998
Airline self-handling must be allowed
• for Passenger services at all airports
• for Ramp services (e.g. baggage loading, fueling) at airports > 1 m passengers p.a.

From 1st January 1999 / 2001

Third party handling at airports > 3m / 2 m pax p.a. or > 75 000 / 50 000 t of freight

Further:
• Access to central infrastructure at non discriminatory prices
• At least one service provider to be independent from the airport
• Separation of accounts of airport’s ground handling units from other airport business
• Selection of suppliers through tender process by a body independent from managing
body of the airport

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 “Ground handling services cover a wide range of services that are
necessary to successfully manage an aircraft turnaround“

REGULATED NON- REGULATED

(e.g.3/4/5/7) (e.g. 1/2/6)

•Baggage •Freight & Mail •Supervision •Passenger •Aircraft

Services
-Bag. Loading -Cargo Loading
-Representation -Boarding -Cleaning
-Bag. Unloading -Cargo Unloading
-Load Control -Check-In -Cooling & Heating
-Bag. Transportation -Cargo
-ULD Management -Lost Baggage
Transportation

•Fuel & Oil •Ramp •Maintenance •Flight •Transport

Operations
-Routine Services -Flight Preparation
-Parking -Organization
-Fueling -Non-Routine -Crew
-Push-Back -Execution
Services Administration
-Stairs

•Catering
-Preparation
EU Directive 96/67/EC distinguishes -Storage
eleven ground handling categories

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“While airports and independent providers only serve airlines, airlines may
provide services for themselves as well as others”

•Airports •Self-handling Airlines •Independent Ground Handler

-Strongest Group
Highest Market Shares -Traditionally Network Carriers -Neither controlled by Airport or Airline

-Either by -Complexity of Network requires High -Change from Local Providers to

-Business Unit Quality Level  at Higher Cost Base Global Companies
-Separate Legal Entity
-Services often provided to Alliance -Increasing Market Shares
-Highest Cost Base Partners  Economies of Scale  Main Beneficiaries of Deregulation
 Public Service Tariffs

Since the introduction of EU Directive

96/67/EC the market is under current
transformation

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 “With the introduction of the Directive 96/67/EC, access to ground
handling services at community airports has been gradually liberalized”

Third-party Handling Self-Handling

- No fewer than two parties per category - Freedom of self-handling

- One license to be granted to independent - Number of self-handlers can be restricted
ground handler -Restriction to one airline with Commission’s
-Effective choice between two suppliers approval only

Selection of Suppliers
EU Directive 96/67/EC applies to
- Relevant, objective, transparent and non- airports with more than
discriminatory criteria
- 2.000.000 annual pax
- Official tender; selected for a maximum of
7 years
- 50.000 annual tonnes
-Installation of Airport User’s Committee
for handling categories 3,4,5 and 7

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“Today 10 out of 27 countries have fully liberalized the market. Most Member
States made use of their right to restrict the number of suppliers”

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“The introduction of Directive 96/67/EC mainly led to changes on prices,
products, market shares and working conditions”

Airlines Ground Handling Suppliers Ground Handling Staff

-Avg. Market Shares Decrease: 12% -Decreasing Manpower Requirement

- Avg. Prices Decrease: 12%
in Germany
-Flexible Staff Planning
-“Thread of Competition”
-Diversification Trend
 Conflict with Nat. Labour Law
Quality Increase
Sharpened Company Profile
-Worse Contract Conditions
- Market Power with Airlines
-Importance of Service Level
Agreements -Downward Pressure on Wages

-Optimized Processes and Efficiency

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Influence on Handling Rate

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Increasing competition

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The AMS Case
Development of competition and handling rates ...

100

Competition
– KLM
1/1999
75 – Aero Ground
EU Directive effective
Rates/ margins Competition:
– rate increases – KLM
still possible – Aero Ground Competition:
– Ogden obtained – KLM Competition:
– reasonable
50 margins license – Aero Ground – KLM Competition:
– Ogden – GG AMS – KLM
Rates/ margins: – Ogden – GG AMS
– rates dropped Rates/ margins: – Dutchport – Ogden
dramatically – Stabilisation at „rock-bottom“ – Aviapartner – Aviapartner
(from -20% to -60 % – At best CPI correction
25 in some cases) – 1997 decline in large contracts Rates/ margins: Rates/ margins:
– Further decline in – Slight increase
most big contracts in big contracts
– smaller contracts – Larger increase in
stabilized smaller contracts
0
1990 1992 1994 1996 1998 2000 2002

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The AMS Case

 Limited competition leads to unbalanced situation between airlines and handlers

 Competition needed for permanent productivity improvements
 With unlimited liberalisation handlers overestimated market opportunities
 Airlines benefited short-term with low prices at the price of
lower service standards
 Loss situation leads to market consolidation with substantial price increase
 To achieve profitability, rates have to increase further

Painful process to find the right number of handlers to perform

quality services at reasonable, cost covering prices

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“The revision of the directive aims to increase competition, as well as performance
in terms of delays, costs, environmental and impact and safety”

• Third-party & Self Handling • Staff Provisions

- No fewer than THREE parties per category at - Right of Member States to impose Transfer
airports with more than 5.000.000 annual pax of Staff
- No fewer than TWO parties per category at - Ground Handling Companies to prove Staff
airports with less than 5.000.000 annual pax Qualifications
- Right to Self-Handle

• Selection of Suppliers

- Harmonized Approval Requirements

- Flexible License Period; 7-10 years
Process was stopped by EU in 2014
- Organizational Separation of Ground Handling
Divisions of Airports

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“A well-functioning duopoly is better than a non-functioning open market
with low quality levels and pressure on working conditions”

CURRENT SITUATION
• Difficult to operate profitably since the introduction of directive 96/67/EC
• Price decrease of up to 30%
• Monopolies still exist
• Pressure on staff conditions has been increased

FUTURE OUTLOOK
• More competition will lead to decrease in quality
• Lack of “Capacity” will decrease efficiency and productivity levels
• Safety issues will increase on the apron
• Pressure on staff wages will further increase  Outsourcing of services
• Staff fluctuation could lead to security issues

Airports
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 “Airlines fear that Germany will lobby to protect the interests of the
airports and fear that competition will not increase in the short-term”

CURRENT SITUATION
• Situation in Germany is outdated
• “Bigger” Airlines do not have a real choice
• Handling charges have decreased
• Increase in competition led to increase in quality
• Customer services became main focus of handling providers
• Lack of choice within Germany (3 dominant players)

FUTURE OUTLOOK
• Complete opening of the market demanded in the long-term
• Individual limits at airports
• No minimum quality standards necessary
• Minimum wages and more flexible labourlaws could increase staff dismotivation
• Organizational separation of ground handling division from airport company is a must
• Binding decision in the Airport User’s Committee demanded
Airlines
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“A well-functioning duopoly is better than a non-functioning open market
with low quality levels and pressure on working conditions”

CURRENT SITUATION
• Current framework is working fine
• Administrative efforts and time limitation use up benefits
• Security and safety requirements by European Commission are considered sufficient

FUTURE OUTLOOK
• Complete liberalization is too muchSlow and steady deregulation
• Higher threshold for third license demandedOtherwise pressure on prices
• Decreased entry barriers will lead to quality problems
• Transfer of staff could lead to problems in daily operation

Independent Ground Handling Companies

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2.3. Aviation Growth

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General development of the aviation market

Air travel and economic growth are directly related

Percent annual change passenger traffic Real GDP growth

16 8
14 7
12 6
10 5
8 4
6 Long-term 3
traffic growth
4 2
2 1
0 0
-2 -1
-4 -2
1971 1976 1981 1986 1991 1996 2001 2006 2011

Pax airline traffic growth GDP

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Key Market Drivers

Source: Bombardier

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Air traffic development 1980 - 2012

World air travel has grown 5% per year since 1980

6.0
• 4 recessions
• 2 financial crises
50
5.0
• 2 Gulf wars
• 1 oil shock
RPKs (trrillions)

4.0
• 1 near pandemic (SARS)
• 9/11
3.0

20
2.0

1.0

0.0
1980 1984 1988 1992 1996 2000 2004 2008 2012

RPKs = Revenue Passenger Kilometers

Source: ICAO scheduled traffic

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Aircraft Deliveries

M o re ef fic ient , new er generat io n airp lanes w ill rep lac e aging airc raf t
Units
Units
50,000
50,000
46,950
45,000
45,000

40,000
40,000
23,470
35,000
35,000 Growth
30,000
57%
30,000
41,030
25,000
25,000
23,480
23,480

20,000
20,000
17,560
15,000
15,000 Replacement
43%
10,000
10,000

5,000 5,920
0
Retained fleet
2016
2016 2036
2036

Source: Boeing

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Aircraft Deliveries 2017-2036

Source: Boeing

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Regional air traffic development

Tr af f ic Flow s 2017-2036 Annual

Added Traffic Growth
2016
Wit hin Asia*
Within 5.7%
Wit hin China
Within 6.1%
Wit hin Nor
Within t h Americ
North Americaa 2.6%
Wit hin Europe
Within Europe 3.2%
MMiddle
iddle East -–Asia
Asia 6.4%
Europe
Europe -–Asia
Asia 4.5%
Nor t h At
North lant ic
Atlantic 2.9%
Wit hin Lat
Within in Americ
Latin Americaa 6.2%
Americ
North a – -LLatin
America at in Am eric a
America 5.6%
Transpac ifi c
Transpacific 3.7%
Wit hin/ t o CIS
Within/to 4.5%
Europe
Europe– -Lat in Am
Latin eric a
America 4.3%
Africa
Africa–- Europe
Europe 4.7%
0 500 1,000 1,500 2,000 2,500 3,000 3,500
3,500
*does not include travel
*does within travel
not include China within china RPKs (billions)
RPKs (billions)

Source: Boeing

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2.4. Outsourcing

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Changes in customer expectations in the Ground Handling Market

Increased competition (e.g. LCC) and cycles in the aviation

industry force airlines and airports to reduce internal and external
costs by:

optimizing in-house concentrating on core

processes business

Outsourcing of all non-core activities

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Reasons for Outsourcing

• Market pressure through liberalisation

• Cost reduction
• Focus on core business
• Financial pressure
• Efficiency
• Risk reduction (profitability, margin drop)
• Less competitive (airline cost structure)

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Outsourcing – Airline perspective

• 3rd party handling mainly important in home / hub airport

- To reduce unit cost
- Based on marginal cost additional income

• Airlines handling in home markets quite often a historical

monopoly before liberalization

• Difficulty to be competitive with airline cost structure

• 3rd party handling less important outside of home markets

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Outsourcing – Airport Perspective

• Is ground handling a core activity for airports?

• Tendencies towards concentration on airport- and facility

Management

• Gradual outsourcing of handling units expected

• Growing competition and concentration reduced margins

• Difficult to meet competetion effectively with sometimes

monopolistic cost structure

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 Areas of Outsourcing

Pax @
outside market
Ramp @ Cargo warehouse @
medium outside market small/ medium outside market

Ramp @
small outside market Ramp / cargo @
hub airport

Airline
Pax @
core hub / home airport
business

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Difficulties - Airline’s View

• High number of staff to be taken over

• Difficult transfer - employee acceptance

• Omission of strikes

• Change in salary conditions

• Operational interferences

Gradual implementation of change

(2-3 years until full cost benefit is achieved)

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Difficulties: Handling Agents’ view

• Market acceptance
- Strong dependence on one carrier
- Possible interference with existing 3rd party business

• Integration process
- Transfer problems
- Cultural fit
- Using synergy potential
- Economic benefits

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 ???

You were asking

for real life examples –
here we go…!

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Real life: Bankrupcies
• Bankrupcy Primera Air (IAD)
- scheduled to start flying to IAD in AUG / SEP 2018
- ceased operation overnight at the beginning of OCT 2018  Pax
scheduled to fly from STN to IAD were already on the plane waiting
to take off when the crew decided not to fly because of the fright of
being stuck in the US
- Staff accidentially found out via airliners.net that the airline had
declared bankruptcy  The airline itself never informed the GH until
the GH reached out to their headquarters a few hours later
- GH (and all other service providers at IAD) were never paid for any
services provided during the approximately six weeks of operation
 total loss ~$80.000USD
- GH employees were added to other accounts that had a staff
shortage at the time so nobody was laid off
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Real life: Volatile Schedules

• Frontier (IAD)

- Some domestic airlines (e.g.Frontier) have very erratic schedules:

 3 daily flights over the last months, as of DEC only 3 flights p.w.
remain: - 85%
 No extra equipment is needed for those operations  no risk
 Staff will work fewer hours or pick up extra hours on other airlines

- Most international airlines announce schedule changes or scheduled

cancellations in AUG / SEP for the winter season  planning possible

- Due to the expansive nature of buying and maintaining equipment

GH normally run a tight schedule

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Real life: Charter Flights, One-time flights

• Antonov Design Bureau, Volga-Dnepr, etc. (IAD)

- Airlines that have had flights before/ have a business relationship

with the GH at either station covered by the GH will get invoiced
- Airlines unknown to the GH are asked to pay in cash or by credit
card
- Some so-called „fishy“ airlines have to pay cash or by credit card
immediately after the services have been completed
- Regular charter airlines are e.g. Miami Air, Sun Country, Antonov
Design Bureau, Volga-Dnepr
- The payments in cash can easily equal up to $300.000-400.000
(e.g. fuel)

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Real life: Diversions / Diversion flights
• Bad Weather Conditions, Medical Emergencies (IAD)

- Airlines file „alternate airports“ in each flightplan

- Sometimes these alternate airports are not covered (no services
offered) by the Airlines` „usually contracted GH“
- If the GH provides services at another station to the airline in
question (= a business relationship exists) the airline is invoiced
- Otherwise if services have been provided without the aforesaid
basis, hopefully some form of payment can be recovered
 Recently: Thomas Cook (operated by Air Tanker), which made
everything even more complicated
 Winter 2018/2019: XL Airways and Norwegian diverted due to
airport closures in JFK  Pax and Ramp handling never saw a
cent (Risk!)...
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2.5. Standard Ground Handling Agreement

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IATA Standard Ground Handling Agreement

• Base for all business relations between airlines and ground

handling companies is the IATA Standard Ground Handling
Agreement (SGHA)

• The agreement consists of

– Main agreement (Standard of work, Remuneration,
Duration, Modification and Termination)
– Annex A (Description of services)
– Annex B (Scope of services and charges at each location,
variations from standard main agreement, additional SLA,
bonus-malus agreements etc.)

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IATA Standard Ground Handling Agreement

Main
agreement Annex A

Annex B
Annex B
Annex B
Annex B
Annex B
Annex B
FRA Annex B
CDG
LHR
CPH
ARN
JFK
ORD

• Main agreement and Annex A are concluded only once between

Airline and Ground Handling Company
• Annex B is signed for individual locations

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IATA Standard Ground Handling Agreement
• Due to the high load of paperwork the IATA has established a
‘Simplified Procedure’:

Under the preamble that both parties know and agree to the
standard main agreement and standard Annex A, only
Annex B has to be concluded.

• The IATA Standard Ground Handling

Agreement (Main Agreement)
is updated and adjusted typically
every five years

• April 2018, DOH at the IGHC

(IATA Ground Handling Conference)
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IATA Standard Ground Handling Agreement

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Description of Ground Handling Services (Annex A)

 Representation and Accommodation

 Load Control, Communications and

Departure Control System

 Unit Load Device (ULD) Control

 Passengers and Baggage

 Cargo and Post Office Mail

 Aircraft Servicing

 Ramp

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Description of Ground Handling Services (Annex A)

 Fuel and Oil

 Aircraft Maintenance

 Flight Operations and

Crew Administration

 Surface Transport

 Supervision and Administration

 Catering Services

Security
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IATA Standard Ground Handling Agreement

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IATA Standard Ground Handling Agreement

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3. Technological Development & Status
in the Ground Handling Business

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Technological development in Ground Handling

In general: Shift from manual work to automated work

• Airport Facilities (Boarding bridges, Fuelling systems)

• Faster, closer and saver communication between aircraft and

ground

• Bar-coding technologies for baggage and cargo tracing

• Faster loading and unloading through use of ULD
• Baggage reconciliation systems (BRS)
• Central Load Sheet
• Robots & Devices for loading/stowing
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IATA Program: „Simplifying the business“

• Main topics
– E-Ticketing (ET) 100% mid of 2008
– Common Use Self Service (CUSS)
– Bar-Coded Boarding Pass (BCBP)
– Radio Frequency ID (RFID)
– IATA e-Freight in progress

• The target is to save in the industry 6.5 bio. US$

(e-ticketing only 3 bio. US$)
• IATA supports this program in different ways

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e-freight

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Check-in mode Development
Check-in mode - Forecast 2004 - 2008

2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000 Desk (65%)

CUSS (30%)

500,000,000

Desk (20%)
-
Y2004 Y2005 Y2006 Y2007 Y2008 Y2008 +
Full Desk Check-in Airline Dedicated SS CUSS
Home printed BP - No Baggage Home printed BP - Baggage

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 CUSS – Common Use Self Service

Moves from a single Airline kiosk…

… to Airline selection on a single kiosk

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Self Check-In Terminals

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 Barcode Technology

• ATB2/MagStripe Technology is in fierce competition with

– Internet/Home Check-In
– High cost of the “magstripe” because of a monopolistic market
– Typical price for a ATB2 printer 2.500 €
– ATB 1 printer are available for 700 €
• Barcode Technology was delayed because
– Through-Check-In requirements
– Lack of standards – already solved
• 2D Barcode has the same storage capacity as “magstripe”
• Barcode technology is a part of the IATA Initiative “Simplifying
the business”

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Bar Code Technology

• Project calculations highlight savings of minimum 40% on the

investments
• Lower maintenance costs
• Lower costs for boarding passes
• Fit for internet check-in
• Boarding Control via Bar Code reader
• CUSS kiosks – can operate with ATB2 as well as barcode
• Bar Code useful for check-in via mobile phones

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Bar Code Technology

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RFID baggage tag
• Move from barcode baggage tag to RFID baggage tag

• Advantages
– Passengers: better service because of reduced baggage mishandling
– Airlines: Reduction on costs out of mishandling and compensation
– Airports: faster baggage handling
– Handler: higher productivity because of faster “baggage reconciliation”

• IATA: 15% of Bag Tag Barcodes are read incorrect, with RFID reduction to
about 1%

• Slow acceptance because of

– High investment (Reader for sortation and Reconciliation, Software)
– Costs for baggage tags with RFID chip (US$ 0.21 in December 2005)
– Different RFID Regulations in different countries
– Possibly lack of “private sphere”
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IATA baggage tracing after mishandling
• Worldwide standard
• Easy reference
• Fool-proof by using pictures and colours

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IATA e-Freight
• Air cargo is much more complex with additional paperwork
compared to passenger transportation
• Target: Reduction on “Paper” volume
• Advantages:
– Airlines: reduction of costs, higher data quality
– Shipper/Consignee: higher efficiency and reliable
process chain
– Forwarder: higher productivity
– Customs: reduced costs, better processes,
information up-front
• IATA founded Industry Action Group (IAG)
• Biggest challenge: electronic customs declaration because of
lack of international standard
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IATA e-Freight

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Equipment for the apron

• Towbarless push-back tractor

• Remote controlled push-back tractor
• Bulk loading into cargo holds with „Ramp Snake“
• Robots for loading/sorting (AMS/CPH)

• Reduction of equipment costs

–„well fitting“ equipment = cost efficient equipment
–Right volume of equipment
–New vs. Second hand equipment
–Buy or Lease
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Baggage Sortation

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Baggage Sortation

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Baggage Sortation

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Baggage Sortation

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Ground Handling at IAD – an example from the U.S.

• Social differences
- No Unions
- No curfew – Dep (e.g. CPA 01:15/ Avianca 03:50)
- A lot of immigrants  integration to society difficult (grouping)
- High Staff turnover on entry Level positions (~20% of staff quit
within 3-6m, another 20% within 12m)

• Financial differences
- Life at the „Existence Minimum“
- Minimum wages only  Airport demands $12, in Virginia $7.25
(JFK minimum wage 2023 at $19, a few years ago $9 (Check-in agent))

- Ramp Agents often have to have 2-3 Jobs in order to make a living
- Some people work 18hrs and more  homeless, no flat/room

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Ground Handling at IAD – an example from the U.S.

• Handling differences
- Check-in systems mainly CUSS from the GH company
- Contracts between GH and Airline have a 60-90 day termination
period  over the last years no airline has terminated the GH, but
the GH has terminated e.g. UPS (nighttime handling = higher wages)

Facts & Figures

- In 2017: 75.000 flights handled with 1.200 employees
- Dominant position of Swissport
- Yet, taking over a bunch of airlines at the time WFS opted out of GH
business Swissport is still strugling  pace too high, no other
companies in competition to „share the market“

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Ground Handling at IAD – an example from the U.S.
GH company Airline Ramp Pax GH company Airline Ramp Pax
Swissport Aer Lingus x x Aerotek Air France x
Aeroflot x x KLM x
Air Canada x x DGS Aeromexico x x
Air China x x Air India x x
Air France x British Airways x Self-handling
ANA x x Cathay Pacific x
Austrian x x Delta x x
Avianca x x Copa x x
Brussels x x Dnata Emirates x
Cathay Pacific x Icelandair x
Etihad x x Ethiopian x Self-handling
Frontier x x
Iceland x Alaska Self-handling Self-handling
KLM x American Self-handling Self-handling
Korean Air x x United Mainline Self-handling Self-handling
Lufthansa x x Southwest Self-handling Self-handling
Porter x x Jetblue Self-handling Self-handling
Qatar x x
Royal Maroc x x Swissport Cargo United Cargo 60% of all flights in IAD
Saudia x x
SAS x x
Suth African x x
Turkish x x
Virgin Atlantic x x
United Express x compiled 23OCT2018

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4. Globalisation

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Three forces are behind the increase in globalisation

Technological
Progress

Changes in Customer Deregulation and

expectations Liberalisation

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Globalisation – Benefits and Risks

Benefits:
• Globalisation as a mean to achieve higher levels of profitability,
productivity and efficiency
• Employees achieve a higher awareness of the company - to be part of
a global player
• Customers can rely on the expertise and the quality of a worldwide
network
• Shareholders benefit from the use of synergies within a global network

Risks:
• Difficult integration of various nationalities, mentalities, cultures and
languages
• Difficulty in efficiently coordinating the network activities
• Loosing clear strategic focus by opportunistic market approaches

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Customers’ demand for single sourcing

• As customers begin to aim for global solutions their requirements and

preferences have changed. Operating on a global basis requires their
provider’s attention also on a global scale

• Focus has to be shifted from single airlines to alliances

• Alliances are looking for one supplier at each airport serving all partner
airlines (Single Sourcing)

• Alliance partners may be limited in the choice of their ground handler

(e.g. Scandinavia)

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Changes in customer expectations

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Networks create substantial synergy potentials

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Internationalisation Strategies

Decision must implement more than just the cost dimension

• Necessity of high or low coordination of the company elements

• Centralisation versus decentralisation (e.g. organisation of the

company)

• Individualisation versus standardisation (e.g. products, services,

processes, Marketing strategies)

• Election of appropriate business system (subsidiary, joint-venture,

cooperation, franchising, etc.)

• Strategies concerning ownership (majority / minority)

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5. Success Factors like

Key Account Management and

Quality/Safety Management

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Success factor Key Account Management

Functions and goals

 Intensifying and taking care of customer-relationships

 Focusing on Key Accounts (Key Customers)
 Generation of tools and processes for the customers and customer groups
 Define Long-term partnerships with Key Customers

What are Key Accounts ?

 Dependence of partly turnover of the Key Accounts to the entire

turnover of the company
 20-80 rule: 20% of the customers generate 80% of the turnover
 Next to quantitative relevance, image, reference or technological
potentials are important

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Success factor Key Account Management

Centralised versus decentralised KAM

 Centralised KA-Management
- Central office
- Long decision making processes
- Focus is on maximisation of the group profit
- Short-term market tendencies are difficult to meet and specific
customer needs are difficult to satisfy
 Decentralised KA-Management
- Decentralised profit centres
- Focus is on profit maximisation of a single company/ location
- Target of group are not taken into consideration

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Success factor Key Account Management

One Face to the Customer / One Stop Shopping

 Benefits
- All company units are represented by one department to the
customer (one-face-to-the-customer)
- One manager can sell all services at all airports
- Customer has one specific person to turn to
- Only Key Accounts
- Regional customer still handled by local profit centre
- Target: Development of stable long-term relationships with the top
customers

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Quality and Safety Management

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Success factor Global Quality Management

• Important determent for cost-and-time-aspects

• Direct relation to the customer satisfaction
• Many companies generate Quality-management systems
(e.g. implementation of Quality-management systems
through DIN ISO 9000ff or Total Quality Management
(TQM))
• To meet customer needs
• To safe internal costs
• To meet time schedules
• To expand market share

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Operational Key Performance Indicators

• Operational data
– Number of handled flights/passengers
– Tons of handled cargo import/export
• Aircraft Damage
– Number and reasons of damages
• Customer Complaints
• Delays – Delay Codes
• Passenger Arrival Services (first bag – last bag on belt)
• Passenger Services (counter opening/ closing, queuing
passengers)
• Ramp Handling
• Environment (Oil/gas consumption)

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Delay Codes 1

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Delay Codes - 2

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Success factor Global Quality Management

Module 2: Carriers
What do you want from your Handling
Company?
Module 1: Staff
Preparational Meeting

Module 3: Staff
Can they achieve what you
are asking for?

Module 5: Ground Handler

Tips on the implementation process to Module 4: Carriers
the Management Receive offer for standards /
agreement

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AHS 1000 check sheet in practice

RAMP SERVICES DEPARTURE FLIGHT:

DATE: Fulfilled
Y N
1 STD - 120 min.
2 STD - 60 min.
3 STD - 60 min.
4
5
6
7 ETD - 10 min.
8

Comments: Checked by:

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KPI in Practice: Fibag/Labag Minutes
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
May

Average
February
January

July
March

April

June

August

November
October

December
September
First bag GGF Last bag GGF First bag Competitor Last bag Competitor

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 KPI in Practice: Queing Times Minutes
15
14
13
12
11 C-class
10 M-class
9
8 Charter
7
6
5
4
3
2
1
0
May
February
January

July
April
March

August

October

November
June

December
September

Average
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IATA Safety Audit

ISAGO

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IATA Safety Audit

ISAGO

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IATA Safety Audit

ISAGO

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IATA Safety Audit

ISAGO

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IATA Safety Audit

ISAGO

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IATA Safety Audit

ISAGO

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IATA Safety Audit

http://www.iata.org/whatwedo/safety/audit/isago/Pages/index.aspx
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IATA Safety Audit

Content:
• Auditors work with Checklists  GH has to proof that there is a
SOP (Standard Operating Procedure) or else Referencing
document for each of the items on the list
• Duration  4 days in general (2 days SOP + 2 days OPS), 2
days for renewal
• People involved at GH: e.g. Regional Manager, Department
Head of each area (Stationmanagement, Ramp handling, Pax
handling, Load Control, Training)
• ISAGO Audit is not mandatory, but serves as a means of
reputation
• GH „applies“ for an audit  Pool Airlines make an appointment
for conducting the audit at the GH
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IATA Safety Audit

• Upon an audit GH Providers have to provide all procedural

documents related to their services offered, e.g.
• Passenger Services
• Ramp Handling

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6. Preparing a Budget and Reporting

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Contents

• Cost components / Cost structure

• Budget of a G/H Company
• Reporting
• Staff/Equipment Volume calculation

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Budgeting

• Revenues
• Problem of complete registration of all events and all work
• Importance of real time control of all work
• Direct input out of existing contracts (rates and work)

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Revenue components

• Revenues
– Types of revenues
• Handling as contracted
• Additional workload (e.g. GPU)
• Cargo Handling and warehousing
• Ticket Commission
• Deicing
• Baggage delivery
• Other Services
• Cute/Codeco charges if not included in handling rates

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Revenue components

• Revenues
– Problem of complete registration of all events and all work
– Process chain:

• Importance of real time control of all work

• Direct input out of existing contracts (rates and work)

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Cost components

• Cost of sales
– Subcontracted Handling like cleaning
– Deicing fluid
– Cute/Codeco charges
– Support from third party e.g. for baggage delivery

Revenues ./. Cost of Sales = Gross Margin

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Cost components

• Expenditures 1
– Wages and salaries
– Subcontracted labour
– Social costs
= COL Cost of labour

• Expenditures 2
– Equipment Maintenance
– Equipment running
– Hired equipment
– Other eqmt costs ( e.g. IT etc.)
= Total equipment cost
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Cost components

• Expenditures 3
– Rent
– Rates
– Heat, Light
– Cleaning
– Repair
= Property costs

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Cost components

• Administration
– Concession
– Insurance
– Recharged overheads from headquarter
– Marketing and sales
– Depreciation
– IT
– Training
– Travelling
– Telephone and communication
– Auditor and lawyer
– Etc.

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Budgeting

• Budget example
– Either based on last years forecast
– Or white paper budget

• Consists of
– Profit and loss account
– Seasonalisation per month
– Cash flow statement per month
– Balance sheet per month
– Capital expenditures (Capex)

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Reporting

• Monthly reporting
– Budget vs actual
– Month and cumulative
– Financial KPI
– Yearsend forecast
– Revenue and cost components comparable to budget
– Graphs
– Explanations

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Reporting

• Controlling of a G/H company general points:

• Monthly vs quarterly
• Start of budget process
• Controlling = Steering and support
• Derive of measures
• Cost cutting programmes
• Deeper investigations

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Key Performance Indicators (KPI)

• To be used to control the general business development of

a certain priod and / or to benchmark with other locations.

Financial KPIs Operational KPIs

• Turnover / Handlings • Punctuality
• Turnover / Employee (FTE) • Delay analysis
• Profit Margin • Aircraft damages
• Cost structure • Quality parameters:
• Handlings / Employee • Queing times
• Baggage delivery
• Lost & Found
• Other items

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Reporting example

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Reporting example

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How to calculate the necessary volume
of staff and equipment?

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Basics – Demand Planning

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Basics – Staff and Equipment Planning

 Basis: Schedule of the airlines handled (STA, STD, AC-Type, in/out nightstop)
 Calculation:
 Manually for small operations
 With the support of IT Tools e.g. Excel-based
 Extensive IT support with detailed considering specialities of the
respective airport (SABRE, INFORM etc.)

 Procedure
 Clustering of AC with same requirements regarding g/h
 Fixing of time the equipment or staff is tied with the g/h of an AC
 Manual shift input (number of staff, shift length)
 Input of absence days per employee and year
 Calculation and output as charts and spread sheets

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Basics – Realtime Planning, Airport Map

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Ramp Handling Process – e.g. B737 Turn around

Hamburg University of Applied Sciences (Sanz de Vincente)

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Schedule

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Equipment

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Aircraft on Ground

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Necessary Equipment

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Staff

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Shift Planning

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Shift Planning

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Shift Planning

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Advantages of „State-of-the-Art“ Planning &
Control IT-Solutions

• Collects and displays all relevant data in a single system

• Takes care of the allocation routine work
• Helps the allocator to concentrate on the real problems
• Can communicate the allocator‘s decisions automatically to
the staff
• Generates data for Invoicing, Quality Management, Statistics
and Business Intelligence

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