Course for ground handling; U.S model, EU model and

Course Title: Airport/Airline Operations

Lecturer’s Name: Ong Sinh Leong

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Student’s Name: Lim Qian Loong

Student’s SIM ID:
10185351

Student’s RMIT ID:
S3684176

Contact Number: 92369810

Report on: Discuss the advantages and disadvantages of
different airport ground handling models

Word Count: 1982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Abstract:

 

 

There are many factors to be considered for the
aviation industry, one of the major factor will be ground handling. In this
report, we will be looking at four major points. Firstly, I will be explaining
what is ground handling and also discussing about the key ground handling
models that are used around the world. Secondly, explaining the relationship
between airport and airlines. Thirdly, discussing the advantages and
disadvantages of different ground handling models. Fourthly, I will be
identifying the model used at my own country’s airport and also comparing it
with different models around the world. Last but not least, concluding the
three models of ground handling.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discuss
the advantages and disadvantages of different airport ground handling models.

 

 

Introduction:

 

 

Every countries’ airport ground handling may differ
from one another. Majority of the countries are managing their own airports
ground handling operations by either U.S model, EU model or Third-party model.
This report is to show the comparison of U.S model, EU model and Third-party
model. In addition, I will be also discussing on Changi Airport, Singapore’s
ground handling system.

 

 

Define
the key ground handling models are used around the world:

 

 

Ground handing is one of the major key activities for
airport operation. Based on the article from (skybrary.aero), ground handling
can be defined as the myriad of services provided to an aircraft in preparation
for pre-take-off and post-landing of a flight. Also, not forgetting of those activities
carried out before the aircraft arrives at a terminal gate, those provided
during the time the aircraft is at the gate and those which are accomplished
after the aircraft has departed for its next flight. The ground handling varies
in all the countries and it is also not the same in multiple airports within a
same country. Ground handling operation is advancing due to increasing numbers
of air travel passenger.

 

There are three main models that are used around the
world for ground handling; U.S model, EU model and Third-party model. Please
refer to Figure 1 in appendix for a simplified structure of the ground handling
markets.

 

Firstly, U.S model is very different since small
portion of ground handling is performed by independent organisations. Majority
of the ground handlings carried out in the U.S is managed by dedicated airline
such as United Airline and American Airline. This does not mean that all U.S airport
operates this way, there are other companies out there like Swissport. Based on
the article from (airline-suppliers), Swissport Ground Handling business
provides passengers and ramp handling of more than 220 stations globally and
also providing their services to more than 224 million passengers in a year. In
today world, Swissport is also known as a huge ground handler with plenty of
hubs and low-cost carrier bases internationally. Below are some of the services
that Swissport provides.

 

Passenger Services

Airport
Ticketing Sales Desk
Arrival
and Transfer Services
Check-in
Services
Dedicated
Passenger Services
Gate
Services
Lost
and Found Services
Lounge
Services
Special
Passenger and VIP Services

Aircraft Servicing and Ramp Handling

Aircraft
Loading/Unloading
Baggage
Sorting and Transportation
Cabin
Cleaning
Crew
Transport
De/Anti-Icing
GPU,
Push-Back
Unit
Load Device Control
Toilet
and Water Services

 

Hence, US model basically means that the airlines are
heavily involved in the ground handling activities. The airline will provide
services and equipment for themselves.

 

Secondly, mentioning about EU model for ground
handling, it is not the same as U.S model. From the report on (ec.europa.eu),
we can see that initially for EU model, airport will operate their ground
handling services by itself which is different from US model where airlines
will run their ground handling services. With the support of two reports on
(ec.europa.eu), this will likely be a monopoly game as previously it was the
norm for ground handling activities in EU airports. Most of the airlines was
unsatisfied for the steep costs and the lack of quality services. Thus, the
European Commission (EC) came up with rules to reduce and try to put an end to
monopolies in EU ground handling activities. EU models will be under airport
authority and which they will be managed by the government. This allows free
contest for most of the ground handling activates at EU airports, leading in
more options for airlines. Having more choices for airlines means that the
service levels will be improved and the fares for passenger will be lower. In
addition, for those services like baggage handling, ramp handling, fuelling and
freight services, the Member State might keep a cap for number of suppliers.

 

Thirdly, talking about Third-party model, it will be
the combination of one airline providing ground handling service for another
airline and independent company; can be either the airport operator, or another
airline or an independent ground handling company providing ground handling
service simultaneously. Based on the information from (centreforaviation.com),
we can see that ASIG (Aircraft Service International Group) is one of the
largest independent ground handling company originally established in 1947, it
provides a large range of ground handling, fuelling and airport facility
services across North America, Europe, Asia and Central America. ASIG’s parent
group is Menzies Aviation Group. Please refer to Figure 2 in appendix for airports
ground handling that are operated by ASIG.

Hence, from Figure 2 we can see that ASIG provides
ground handling services to a great number of airports. Majority of the
airports are using Third-party model for their ground handling activities, it
will be more common in EU rather than in US since US uses more of their major
airline’s ground handling service for their airports.

 

 

Explain
the relationship between airport and airlines:

 

 

Previously, before World War II, there was no or low
demand for air travel compare to post war. However, after the war, things have
changed thus infrastructures and lifestyle became better. Allowing more and
more civilians joining the Air Force which leads them to have vital skills such
as flying. This resulting the evolution of leisure travel and holidays, causing
the number of air travel passenger to increase significantly over the years.
Hence, airports need to work out on their operations in order to cater for the
increasing numbers of air travel passenger. Please refer to Figure 3 for a
better idea on the growth rate of air travel that increases over the decades.

 

Airlines and Airport must work closely together as
they are interdependent. By working together, they can satisfy air
passenger/consumer and will have a better prospect together. Which basically
means that airport will earn from airlines, whereas for airlines they will earn
from air passengers. Airport will earn their profits from airlines by the costs
and charges that airlines have to pay for. Some examples will be:

·       Use
of runways and landing fees

·       Security
charges

·       Passenger
duty

·       Parking
and boarding access charges

·       Air
Traffic Control

·       Environmental
charges, etc.

On the contrary, for airlines, they will earn their
profits from air travellers/cargo suppliers. Thus, both airport and airlines
have common interest like quality services for air passenger, flights that
depart or arrive on time, facilities and cost that can be improved on to meet
passengers’ expectation. Hence, airport and airlines have to work hand-in-hand
as their reputation is interdependent. All the information above is provided by
(linkedin).

With the information from (unglobalcompact.org), Incheon
international airport will be a great example of how they meet their objective
and successes the challenges. As of December 2015, they have approximately 90
airlines running at the airport, connecting 186 cities in 54 countries. Hence,
the airport could name itself as the hub of international air transportation in
Northeast Asia.

In addition, airport can improve their relationship
with airlines by cutting down the operational cost, at the same time still
providing the same or higher quality of service. This can be done by having
more Third-party ground handling companies and allowing airlines to have their
own preference for their Third-party ground handling company. Better
Third-party ground handling company might help the airlines to save ground activities
time, which allows flights to depart on time. This resulting airline to save
cost and having more profits at the same time.

 

 

Discuss
the advantages and disadvantages of different airport ground handling models:

 

 

Firstly, the ground handling operations for U.S model,
mainly relies upon on airline due to effortless access to their equipment and
facilities. This is because if an individual airline company is the operator of
the ground handling, they can plan, customise and design the ground handling
facilities for their needs. This will definitely increase the aircraft
productivity which will result in more profits. However, the downside will be
trading off with time efficiency.

 

Secondly, the ground handling operations for EU model,
mainly relies upon on airport authority. Since it is a high cost sector of
airline business, there will be an increase in profit. With all of the profit
the made, they can invest some on their facilities. This will definitely
improve the service quality, leading passengers to be more enjoyable when they
are at the airport. However, working with one big organisation can cause things
to be similar as monopoly game, cost might be artificially inflated and service
quality might reduce.

 

 

 

 

 

 

 

 

 

Compare
your own country’s airport with different models around the world and identify
the model is used at your own country’s airport:

 

 

I will be using Singapore’s Changi Airport to compare
with different models around the world.

 

In Singapore, Changi Airport uses Third-party ground
handling model for their airlines. The two main ground handling companies will
be SATS (Singapore Airport Terminal Services) and Dnata (Dubai National Air
Transport Association). This two companies have been very competent to serve
the airlines at Changi Airport for over the years. In a recent report from (channelnewsasia),
SATS introduces augmented reality (AR) glasses across their ramp handling
operations. With the help of these smart glasses, the staffs are able to scan
the visual markers which in a way is similar to QR codes on baggage and cargo
containers. This will improve the efficiency of baggage and cargo loading,
where loading time will be reduced from an hour and 45 minutes. Therefore, this
will allow airline passengers at Changi Airport to have shorter waiting times
for their flights, which will then improve the efficiency and reputation of
Singapore’s carriers and Changi Airport. This shows that how Third-party ground
handling company is keeping up with technology to bring a better and seamless
experience for airlines, which benefited Singapore in comparison to other
countries. On the other hand, this two companies have been very competitive
against each other for over the past few years. In an article from (todayonline),
it has indicated that there is a price war between this two ground handling
companies. It stated that they have fought for contracts to service airlines
here. They were willing to lower their rates down by 30 percent which will
lower their profits. Airlines are taking advantage of this by negotiating
harder for better contracts with SATS and dnata. This will naturally reduce the
costs of air travel for passengers where airlines can lower their cost of
production. Eventually, making Changi Airport a successful airport. However,
having Third-party ground handling companies is not always good. An example
will be what if SATS and dnata turn collusive, as there is no guarantee that
such competitive behaviour between them will last for long term. This would
result airlines and consumers losing out. Hence, in Singapore, Competition
Commission of Singapore (CCS) will be responsible that this does not occur to
safeguard the interest of airlines and consumers.

 

Hence, the Third-party ground handling operations allow
Singapore’s Changi Airport to be very successful. It is different from other
ground handling models around the world, as Changi Airport does not use U.S
model nor EU model, they have their own specialised Third-party ground handling
operations.

 

 

 

Conclusion:

 

 

In conclusion, I personally feel that ground handling
is vital for airlines and airport business. Without proper ground handling,
airlines will not be able to get their necessary equipment or servicing and it
may be a major problem for the airline and air travellers. It will definitely
affect the profits of airlines and airports if the air travellers’ rate
decreases. Different countries will have different types of ground handling
operations, each of the three models will have pros and cons, nothing in this
world is perfect. What matter most is how does a country make full use of their
resources to comply with the ground handling model that they are using. At the
end of the day if that model being used can make profit, it will be a good
ground handling model for the country.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References:

 

Anon, 2017. SKYbrary Wiki. Ground Handling – SKYbrary
Aviation Safety. Available at: https://www.skybrary.aero/index.php/Ground_Handling Accessed
January 23, 2018.

 

Anon, Provider of Ground and Cargo Handling Services
for Airlines. Airline Suppliers. Available at: https://www.airline-suppliers.com/supplier/swissport-international-ltd/ Accessed
January 23, 2018.

 

Study on the Impact of Directive 96/67/EC on Ground
Handling Services 1996-2007. (2009). pdf report Germany: Airport Research
Center, p.28-30. Available at: https://ec.europa.eu/transport/sites/transport/files/modes/air/studies/doc/airports/2009_02_ground_handling.pdf Accessed
23 Jan. 2018.

 

Anon, Groundhandling – Mobility and Transport –
European Commission. Mobility and Transport. Available at: https://ec.europa.eu/transport/modes/air/airports/ground_handling_market_en Accessed
January 23, 2018.

 

Anon, Aircraft Service International Group (ASIG).
CAPA – Centre for Aviation. Available at: https://centreforaviation.com/data/profiles/suppliers/aircraft-service-international-group-asig Accessed
January 23, 2018.

 

Mdukhan, 2016. AIRLINE AIRPORT MANAGEMENT, how
airports and airlines function particularly together. Linkedin. Available at:
https://www.linkedin.com/pulse/airline-airport-management-how-airports-airlines-pgdip-itc
Accessed January 23, 2018.

 

The Initiatives for out Better Future. (2016). pdf
report Korea: Sustainability Management Team Incheon International Airport
Corporation, p.6. Available at: https://www.unglobalcompact.org/system/attachments/cop_2016/313331/original/Social_Responsibility_Report_2016.pdf?1473062532

 

Wong, W., 2017. Ground handlers at Changi Airport to
get smart glasses to help speed up operations. Channel NewsAsia. Available at: https://www.channelnewsasia.com/news/singapore/ground-handlers-at-changi-airport-to-get-smart-glasses-to-help-9187596
Accessed January 23, 2018.

 

Hardasmalani, R., 2016. Price war between ground
handlers benefiting airlines at Changi Airport. TODAYonline. Available at: https://www.todayonline.com/business/changi-airports-ground-handling-duopoly-price-war Accessed
January 23, 2018.

 

Tolan, C., Patterson, T. & Johnson, A., Is 2014
the deadliest year for flights? Not even close. CNN. Available at: http://edition.cnn.com/interactive/2014/07/travel/aviation-data/ Accessed
January 23, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Appendix:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure
1: Simplified Structure Model (ec.europa.eu)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure
2: Airports supplied with ground handling services by ASIG
(Centreforaviation.com)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure
3: Revenue passenger kilometres from 1945-2012 (CNN/ICAO)

 

 

 

 

 

 

 

BACK TO TOP
x

Hi!
I'm Rhonda!

Would you like to get a custom essay? How about receiving a customized one?

Check it out