Low cost: high quality

posted on 5th June 2018

AGS talks to three low cost carriers where driving down the cost to the paying passenger does not mean they will receive anything less than a great deal from the airline – certainly in terms of the safety and quality of the service they get

AirAsia

The airline seeks out low-cost airports and high-quality handlers across its growing network

Malaysia-based AirAsia and its various associated airlines and subsidiaries across the region have been a breath of fresh air to Asian travellers over the last decade, during which time they have opened up numerous new lanes for cheap travel. Indeed, the AirAsia brand has become one of the brightest stars in the branding firmament and comes without all the negative public relations baggage associated with low-cost peers such as Ryanair.

With a network that now spans more than 20 countries and over 130 routes, the company’s strategy as laid out by the entrepreneurial Tony Fernandes, group CEO, has been clear: to tap into a market of three billion people by simplifying processes across a point-to-point network that rigorously avoids legacy carrier overheads such as code shares.

A no frills service, a commitment to using technology to minimize costs and the daily, rapid turnaround of its fleet of over 90 A320 aircraft have enabled the carrier to maximise utilisation and profits. Already the carrier has flown over 100 million people.

At its Malaysia headquarters the company uses Kuala Lumpur International Airport’s Low Cost Carrier Terminal (LCCT) as its hub, although it is located 20 kilometres away from the main terminal and managed and operated by Malaysia Airports. There, AirAsia’s in-house Ground Handling division is split into three sections covering Guest Services, Ramp and Engineering, according to Zaman Ahmad, head of customer experience and technology.

The Guest Services division handles everything from ticket sales to check-in, including gate management and tallying passenger numbers on board before door closing. Guest Services also handles arrivals and flight transfers.

AirAsia’s ramp division handles all the processes that are required airside, from loading and unloading baggage and cargo, through weight management, aircraft servicing (water and waste), provision of passenger steps, marshalling, towing and pushback.

The Engineering division ensures that aircraft are well maintained and serviced, with all technical logs updated in accordance with local regulators. Engineering also performs repairs and maintenance on aircraft breakdowns and to ensure aircrafts are turned around quickly. This usually means within a 25-minute window.

“All of these processes are conducted like clockwork and in sync with one another,” said Ahmad. “To maintain uniform quality of service and technical expertise AirAsia has set up our own training facility for all ground personnel.

“In stations where we are not able to set up our own ground handling, we would send our team to survey and fish out the best local talents in relation to ground handling. We ensure that the station representative/head is carefully selected by us together with a few guest services staff who would undergo training at our training facility at LCCT. This way we can keep our processes unified across our network.”

To keep standards uniform across the network and guarantee fast turnaround of aircraft, Ahmad said AirAsia’s main ground handling requirement was well-trained staff that are supervised closely. “We incorporate the same stringent selection and training criteria when it comes to In-flight services,” he added. “We perform audits regularly on all aspects of station operation and have a team of In-flight check staff who ensure the quality of service rendered is the same across the network. Another key point would be that we ensure every operation staff member is able to multi-task, another key element in our rapid success and growth.

AirAsia looks at proven performance credentials when sourcing and evaluating ground handling partners. “This would only come about after our team of airport set-up experts have personally been on site very much ahead of station opening to carefully handpick the best ground handling provider who is able to keep up with our growing needs,” he said.

A reflection of the company’s ground handling efficiency is that, unlike some LCC carriers that do not touch cargo and despite its tight turnaround times, AirAsia is rapidly becoming a player in the intra-Asia markets. Cargo already contributes over 5 percent of total revenue and the company aims to further increase that share now that it has proven its 25-minute turnaround model can sustain reliable operations.

“We have a metronomic process both for the handling of cargo and passenger operations,” said Ahmad. “AirAsia by and large has an over 80 percent on-time performance performance – on par or almost on par with other more renowned legacy carriers.”

flydubai

The Middle East’s most dynamic low cost carrier is expanding, creating fresh demand for ground handling services.

The Middle East is well known for its raft of successful carriers offering massive global networks via their own hubs. Emirates, Etihad and Qatar have rapidly become by-words for excellent service, spanking new aircraft and highly competitive pricing. But some analysts believe the trunk routes these carriers target have left a gap in the regional market. Step forward flydubai, Dubai’s first low-cost airline.

Established in 2008, flydubai started operations from Terminal 2 at Dubai International Airport the following year using a fleet of 23 brand new Boeing 737-800 NG aircraft.

At present the carrier serves 51 destinations across the Middle East, Subcontinent, Africa, Russia and Eastern Europe, offering a range of new routes from the Middle East to destinations in places such as Central and Eastern Europe which historically have been underserved by direct air links to Dubai.

flydubai sees the services provided at the airports it serves as an integral part of its overall offering. “The first impression our passengers often have of flydubai is their interaction with our ground handling agents,” explained a spokesperson. “As a result, we put a great deal of emphasis on the services both our in-house and contracted staff provide.”

flydubai arranges its ground services at its Dubai hub using its own staff who are assisted by extra resources such as check-in personnel provided by ground services provider dnata. Around the regional network of destinations a range of third-party providers of ground handling services are employed.

“Our model of flydubai colleagues combined with contracted staff provides us with an efficient and effective model and enables us to have representatives who are experts in their markets based in every outstation,” said a spokesperson. 

“Through careful selection and collaboration with our sub-contracted suppliers, we make sure that a consistently high level of service is provided at all stages of the airport experience.”

Where a choice of providers exists, services are procured by flydubai through a formal Request For Proposal (RFP) process, the initial step before a contract is tendered. The quality of service provision is then monitored against established and pre-agreed key performance indicators (KPI). A member of the Dubai-based Airport Services team manages the set-up of each new outstation and is then on hand once operations have started to conduct training or provide on-going support to the agent where needed.

“The flydubai product is based on keeping things simple and ensuring passengers have the choice to only book and pay for the services they want – in short, making it easy for people to get going,” the spokesperson said. “Similarly, we try to keep things simple for our service providers to ensure they maintain high quality customer service standards. We then back this up by having a network of local representatives who monitor what is happening on the ground.

“Furthermore, we give our passengers the opportunity to feedback on their experiences, including an on-board survey conducted through the in-flight entertainment system. This feedback is invaluable in providing an insight into the things we do well and also those our passengers would like to see done differently, enhancing our overall service quality.”

Expansion will continue in the future. “The passenger network covers destinations within a five-hour radius of Dubai,” she said. “There are 2.5 billion people, or one third of the world’s population, living within this catchment area and as such there is great potential to grow our network and provide even more airports with direct access to Dubai.”

Jetstar

An Australian carrier takes the eclectic approach to meet its ground handling needs

Like many low-cost carriers, Australia’s Jetstar Group is the offshoot of a major flag carrier, in this case Qantas. However, due to various national investment criteria and the benefits of working with local partners in many markets in Asia, the Jetstar story is not a simple Big Brother-Little Brother link to Qantas and this is reflected in its ground handling arrangements.

For example, in Australia and New Zealand Jetstar Airways is wholly owned by the Qantas Group. By contrast, Singapore-based Jetstar Asia is managed by Newstar Holdings and is majority-owned by Singapore’s Westbrook Investments (51 percent), with the Qantas Group holding the remaining 49 percent.

Jetstar Pacific, meanwhile, is based in Vietnam and is majority-owned by Vietnam Airlines with the Qantas Group holding 30 percent. A partnership arrangement between the Qantas Group, Japan Airlines, Mitsubishi Corporation and Century Tokyo Leasing Corporation runs Jetstar Japan, while Jetstar Hong Kong is a joint operation between China Eastern Airlines and the Qantas Group.

The multinational ownership and partnership set-up of the Jetstar Group, which now claims to be the largest low cost carrier in the Asia Pacific by revenue and has flown over 75 million passengers since its launch in 2004, means the network is more a coalition of value-based carriers rather than a single entity like many of its European peers. This eclectic approach is also reflected in the diversity of ground handling arrangements in place across Jetstar’s network, which is served by six A321s, 11 A330-200s and more than 70 A320-200s.

“We work with a range of multinational as well as up and coming local ground handling suppliers,” said John Knox, acting head of ground operations at Jetstar. “It all depends on their suitability for the operations at individual ports.

“In some of our smaller ports we have external ground handling companies providing catering, customer and ramp handling services. We maintain high standards using this model by linking remuneration to specific performance metrics.

“In overseas markets, we look for ground handling partners who have demonstrated experience in specific countries. There are also cultural requirements like language that are considered.”

Jetstar focuses on keeping operations as safe, simple and straightforward as possible across its network which focuses mainly on Australasia, South East Asia and North Asia, but which also spans as far as Hawaii. “As a low-cost carrier, we need to get maximum value for money with our supplier arrangements,” explained Knox. “Suppliers that can demonstrate experience delivering to the standards we expect, in a way that is consistent with our commitment to safety, are selected for the job.”

The selection criteria and procurement processes are complex and thorough, according to Knox. “Choosing ground handling partners is not a one size fits all process,” he said. “We have to tailor each agreement to suit the type and volume of operations in the individual ports.”

Ahmad: “AirAsia has set up our own training facility for all ground personnel”