Markets open up in the south

posted on 14th May 2019
Markets open up in the south

Talma and Agunsa are both dealing with a mixed bag of opportunities and challenges, writes Justin Burns

The Latin American ground handling marketplace is braced for more development as new airlines enter the market and airports develop their infrastructure.

Operators face a number of headwinds, but the industry is now seeing increasing movement and as markets open up so does competition.

Raúl Larrea Castellano, Institutional Relations Manager at Talma, says the biggest operational challenges for the ground handler, which operates in Peru, Mexico and Ecuador, is overcrowded infrastructure and higher costs in airports, more efficient planning of resources, and the privatisation and liberalisation of some markets in the region.

However, he believes Talma has opportunities to expand operations regionally while technological innovation for costs control and improvement of operational safety provide it with an opportunity.

Castellano sees new trends in the market, including growth of legacy carriers in the region, consolidation of low-cost carriers, an increase of flight offers with a reduction in ticket fares, more connectivity between regional airports and a change in airline marketing strategy increasing ancillary services and extra services.

For Eric Hartmann, VP Aviation Services in Latin America at Agunsa, the biggest challenges in the first half of 2019 have been starting GH handling operations at Santiago International Airport in Chile, personnel contracting and retention, and airport regulations in Argentina after the much-awaited de-regulation of Argentinean ground operations.

He feels the surge in new airline entrants provides Agunsa with an opportunity along with the continued to trend to outsource services, and other new trends he sees in 2019, are continued consolidation of regional and global GHs and the increasing move to look for new verticals like catering, lounges, and crew transport.

Both Castellano and Hartmann are equally as concerned about the increasingly unstable airline industry and closures regionally and globally. Hartmann says Agunsa was affected by the reduction of operations of Ocean Air in Chile but as a third-party operator it has to be ready and it is one of the reasons airlines outsource their ground operations.

One area both share the same views is the recruitment and retention of ground handling staff, a trend it seems all operators across the globe are battling.

Castellano says: “Employee rotation in GH industry is relatively high and the process of recruitment and capacitation of personal is always a challenge. We look to offer additional benefits to the salary, like capacitation, to keep them with us.”

Hartmann says Agunsa is constantly face challenges recruiting, and finding good people is “difficult worldwide”. “Our managers are key to our success of retaining top notch personnel,” he adds.

They also concur that diversifying into new airport services is vital in order to grow revenues and help grow business as once you are established in a market it makes sense to look for more growth opportunities.

Innovation and new technology are a must for the progressive ground handler but is it a focus for Talma. “It is important only if contributes to reduce costs (with a better control and planning of the resources for the operation) or increase sales (to access segments of the market that required more information), It is also important to improve operational safety,” Castellano says.

Hartmann believes innovation and technologies must be at the core of strategies as can help bring efficiencies and “bring you closer to your customer” so are fundamental.