Woo Kam Weng has been with Malaysia’s Pos Aviation since 1997 (when it was still known as KLAS – KL Airport Services) and was appointed CEO in February 2017. Having seen the company grow and change over those two decades, he is now keen to develop it further
What keeps you motivated and interested in the ground handling business?
Through the years we have grown from a brand-new start-up company, a pure ground handler, to become an integrated total supply chain business – although ground handling is still our core business. We have 62% of the market share at KLIA [Kuala Lumpur International Airport], where we handle eight of the world’s top 12 airlines.
We have a very dynamic group that owns Pos Aviation and they are always pushing the boundaries, so it’s been very challenging and very rewarding.
What is the latest news from Pos Aviation?
We have broken through with our catering services as we are now providing in-flight meals for Malaysia Airlines on its flights to London (and other premium sectors served by the A350). They are revamping their cabins too and we’re part of that change. We offer catering services on their regional routes as well but the London service is the jewel in the crown, really.
This year we have acquired a number of new contracts. We already handled Qatar Airways in Kuala Lumpur but they have expanded to Penang with a B787 (flying three times a week) and we are serving them there too now. We’ve also started handling Garuda Indonesia in Kuala Lumpur.
We have looked at expanding in the region but that is probably two or three years away.
What is driving demand for your various ground handling services?
Airlines are experiencing good demand for air travel and the forecast is still for an average growth of 5% in GDP in the Malaysian economy. The Asia Pacific region will keep growing in terms of aviation and in 20 years’ time it will have 37% of the world’s fleet, with more than 17,000 aircraft deliveries predicted.
There are between 600 million and 700 million people in the ASEAN region; that’s a large base of consumers who are beginning to be financially independent. People are savvy with their travel so the low-cost carrier model is expanding in the region.
I understand your company suffers the same difficulties with skilled manpower and staff retention as many other handlers. How are you approaching this issue?
We have reduced our staff turnover from about 30% to 21% through our Human Capital Development & Retention programme and the Intellectual Thinking programme, which is training aimed more at the managerial level.
Intellectual Thinking helps staff to understand themselves better and learn where their skills lie. Pre- and post-training tests identify the areas they can improve on and they learn how to make better decisions. They learn how to adapt their leadership style to the new millennials, who don’t have the same thinking style as the baby boomers. It goes two ways, though, as we also teach the millennials different ways of thinking.
We bought this programme in from an external trainer who travels around the world, challenging people to change their thinking boundaries. I have seen employees start to make better decisions after this training.
Does the future of ground handling lie in the adoption of technology to replace manual processes, do you think?
The current market environment requires us to be more efficient and reduce errors, and technology is perfect for that. Customer service still needs the human touch, but the first stage can be done with technology, for instance checking in on the web. Human intervention will only be required should the passenger need any assistance in special cases. People will still be needed to add value to the entire customer experience.
An example of how technology can be used: people travel through transit points to destinations with varying visa requirements and you can’t rely on staff to integrate all of that information, so we have adopted technology that can scan passports and give a red or green light to indicate whether a visa is required or not. This reduces the process by about two minutes for each person. If we process 5 million passengers a year, that means we save 10 million minutes.
The system is still in development; we expect to roll it out at KLIA this year, followed by our other stations.
Technology has played its part in making processes efficient above the wing but there’s still a lot of investment required in GSE. I think technology will begin to be more prominent on the ramp and GSE will become more efficient and more intelligent (with proximity sensors becoming more common, for instance).
Where else are you investing?
We have set up a strategy and innovation department purely manned by millennials with specialist skills and knowledge. Their whole function is to look at innovations to improve processes using Industry 4.0 (Internet of Things, 3D printing, data analytics and so on) and applying it to ground handling.
We are also enhancing our facilities in our cargo terminal, replacing our GSE fleet and introducing managed GSE services, and introducing new systems for resource management, revenue capture, security and cargo terminal handling. We will spend 80 million ringgits over five years. We have run for 20 years now and it’s time to move ourselves forward.
We are part of a large group and our holding company is at the forefront of a lot of things, so yes, we are ambitious too.
Are you optimistic for the future, or concerned about anything in particular?
There are some concerns. ASEAN open skies will kick in and there will be more competition in the ground handling market, which means profit margins may be squeezed. That’s why we are focusing on being faster, better and cheaper. The core strategy is to have cost leadership in order to be competitive. It’s about value for money, and adding value: balancing service quality and the price the customer is willing to pay.