Caribbean capacity crunch

posted on 20th August 2019
Caribbean capacity crunch

Airport Services Antigua is facing various headwinds but is optimistic for the future as there are plans on the island to improve infrastructure

The rest of 2019 looks set to be challenging for Antigua-based ground handler Airport Services Antigua (ASA) as it battles intense competition and a lack of capacity at Antigua V.C. Bird International Airport.

Among the handler’s airline clients are British Airways, Virgin Atlantic, United Airlines, Caribbean Airlines, American Airlines but it also provides services for a host of others.

Marva Richards, Operations Manager, ASA, identified the three most significant operational challenges for ASA in the rest of 2019 as increasing numbers of PRMs, multiple handlers in a small airport and a lack of arrivals slots, all of which put pressure on operations.

Despite the challenges she said the handler is optimistic that the rest of the year will be a positive one in terms of winning new airline contracts.

“We remain committed to enhancing our operational efficiencies through continuous improvements thus keeping our customers happy,” she said. “On the other hand, the emphasis on price by airline carriers, to replace service quality is an issue for ground handlers at this time.”

Demand into the Caribbean continues to grow as airlines add new routes into the islands, popular holiday spots for North American and European travellers’ alike, but there is a lack of capacity at many gateways.

This growth presents opportunities for ground handlers (GH) in the region and Richards said an increase in the Antigua island hotel stock will allow for more arrivals and the opportunity to handle more aircraft turnarounds.

Another growing opportunity is the introduction of ‘home porting’ – a VIP meet and greet service for passengers – which ASA continues to see strong demand and it will further expand in Antigua.

New trends are always emerging, but some are unchanged, and Richards said the handler has noted that airlines are reducing their supervisory staff and other offerings as they reduce their overhead costs. She also expects market consolidation of GHs to continue the same path with more linking up in the future.

Margins are tight for most GHs globally and it seems this trend does not differentiate from market to market. Richards noted in the Caribbean airlines are looking “optimum service at the lowest price possible” –much the same as other regions.

But how does she think GHs like ASA can increase their margins? “GHs must focus on ways to make their operation lean and remain keen on ways to survive the margin squeeze,” she said.

Richards said ASA has the view it is very important to diversify and offer more services, especially in the Caribbean region where volumes tend to be low, making it a necessity to branch out into different services to supplement the low volumes.

Innovation and technology are central debates in the industry today but investment much depends on the size of the market and operator. Spending large amounts on the latest technology can be fruitless especially where money is tight and can be better used.

Antigua itself is not a huge market and Richards noted that “every attempt” must be made to keep up with the changing times as well as the changes in technology. However, she added that investing though, can be difficult with the low volumes normally seen at ASA’s location.

Another reoccurring theme being discussed extensively in the industry is challenges faced by GHs in recruiting staff across stations. Antigua it seems has also been affected. “Retaining ground handling staff is becoming an issue,” Richards said. “The long hours, shift work, heavy demands from the carriers and low wages does not encourage long term retention.”