As Keith Mwanalushi reports, while airlines turn to emerging markets in Africa and the Middle East for growth, ground handlers in these regions are faced with the added pressure to boost efficiency, deploy new technologies and create new ramp capacity.
International traffic to and from the Middle East is now edging back towards the levels seen in 2009 and 2010, when growth by airlines in the region appeared unstoppable despite the global downturn. For example, in January 2012, international passenger traffic was up 14.5 percent year-on-year, a level not seen since November 2010 according to aviation analysts CAPA.
This level of capacity growth means that the ground handling function is consistently expected to be ahead of the game. Dubai International (DXB) is experiencing massive growth. In 2011, the airport handled 51 million passengers and this number is expected to rise to 56 million by the end of this year.
“There are no signs of slowing down,” states Stewart Angus, divisional senior vice president for dnata’s Associated Companies and the main ground handler at DXB. “As a fully slot co-ordinated airport, DXB peak times are now extremely busy; the airport operator [Dubai Airports] is building infrastructure as quickly as possible and dnata is adding resource to cope with current and forecast demand.”
In the forthcoming financial year, dnata’s airport operation is adding well over 1,000 new staff to cope with the increased activity. In addition, the company is spending more than AED50 million on additional Ground Support Equipment ([GSE].
“However, it’s not just about adding people and equipment,” says Angus. “We are operating in an increasingly congested environment and the current airport has no additional real estate to expand into. Therefore we spend a lot of time seeking ways to work more efficiently and effectively and this will be our main focus over the next few years.” Angus also indicates that the new airport at Dubai World Central is still some time away in terms of major passenger operations, but he says work is already underway to manage that growth.
The DXB operation has seen the purchase of a number of essential GSEs. They include aircraft pushback tractors, container/pallet loaders for all wide bodied aircraft, air conditioning units, ground power units and toilet servicing units.
Some smaller airports in the region are looking at outsourcing ground handling to outside service providers. Ras Al-Khaimah International Airport (RAK) recently awarded a ground handling operations contract to Kuwait-based National Aviation Services (NAS), in the first of its kind agreement for an airport in the UAE.
Under the terms of the contract NAS provides RAK with ground handling services including ramp handling as well as check-in, arrival, transit and cargo services. Andrew Gower, airport director at RAK, said that with the rapid growth forecast for RAK, it was important to focus efforts on operating the airport as a business not a service. Outsourcing ground handling would be a vital part of the ongoing development plan.
Last year, NAS won the award for the best emerging market ground handler at the Emerging Markets Airport Awards in Dubai for the second year in a row and was only the fourth ground handler in the world to be awarded the ISAGO certification.
In the Iraqi Kurdistan region, airport infrastructure development has moved at a quicker pace compared to the rest of Iraq, by and large due to the opening of the new Erbil International Airport (EIA) in Sept 2010. Last year, EIA processed 621,870 passengers, a 37 percent increase on the previous year, whilst cargo tonnage also increased dramatically, with a 67 percent increase to 17,769 tonnes per annum.
dnata is the sole provider of ground handling services at EIA, and the company reports that considerable investment has been made in GSE technology in order to counter the increase in traffic movements at the airport.
So far, dnata reports that it has invested in one lower deck loader, one main deck loader, a heavy pushback tractor, 18 LD3 dollies, a new toilet service unit, a new de-icer, 4 x 20 foot dollies, five small ramp tractors and the installation of a GSE maintenance work shop.
Angus says: “We also have a new heavy pushback tractor on order; along with numerous aircraft tow bars, 18 baggage barrows, and six forklifts. We believe the prospects in Kurdistan are very good – the regional government has demonstrated their vision to develop airports further.”
He adds that since operations at the airport began in 2010, dnata has successfully taken on an additional 10 scheduled airlines in Erbil from an initial six airline companies. “We continue to receive enquiries from airlines looking to diversify and develop new markets,” he says.
Africa has also shown signals of significant progress in its aviation industry; this is despite the numerous limitations that still haunt the continent. The entry of African carriers as full members into the three global airline alliances, Star, SkyTeam, and oneworld, will bring much needed emphasis to build more intra-African routes and create new airport ramp capacity.
The World Bank forecasts that the economies of sub-Saharan Africa will grow 5.5 percent in 2012. The International Monetary Fund predicts that over the next five years, seven of the world’s 10 fastest growing economies will be in Africa. Interest in the African market by the global carriers has been ongoing since the onset of the financial crisis when airlines swapped some capacity from debt-ridden markets in Europe and America to Africa’s cash based economies.
Aviation analysts indicate that airlines in Africa reported 116 billion Available Seat Miles (ASMs) in 2011. ASMs are expected to grow to 152 billion by 2015 and to 186 billion by 2021. Although the expected growth rates are remarkable, they are based on a small baseline. Even by 2021, capacity in Africa will be 10 times smaller than the expected capacity for North America. However, the long-term prospects for traffic in Africa are encouraging.
Accra Katoko International Airport in Ghana has seen considerable new capacity in the last few years with new operations from the likes of Virgin Atlantic, United and Tap Portugal. Some 63 airlines now offer regular services into Accra from Africa, USA, Europe and the Middle East.
“Ghana is an emerging market with enormous business potential,” said Peter Scholten, vice president commercial at Saudi Airlines Cargo during the launch of freighter services from Riyadh in March. “The addition of this new destination will help us to increase our activities in Africa, where we already operate scheduled 747 freighters from Saudi Arabia to Nairobi, Lagos, Addis Ababa, N’djamena, Khartoum and Johannesburg.”
Aviance Ghana provides a full spectrum of ground handling services at Accra Katoko. “The main wave of flights operate at night and focuses on the USA, Europe and South Africa,” says managing director Paul Craig. “During peak times, facilities are used there to optimum capacity and additional traffic has to be regulated which impacts on free organic growth,” says Craig.
Currently, the airport handles around a million departing passengers a year and the aviation authorities have a plan to upgrade the airport to handle five million and then take the airport infrastructure to a 15-year plan. Ghana has an annually reviewed capital investment plan mapped out into five-year periods.
As the influx in airline capacity continues, Craig says having the right GSE equipment has been crucial in maintaining effective operations. “Investment plans are implemented to ensure capability exceeds demand thereby protecting service standards and delivery. As Aviance already meets peak demand, it is now for the authorities to ensure new entrants operate in periods when appropriate facilities (check-in desks and stands) are available. This assists best use of resource and equipment.”
In the last 12 months, Aviance has taken delivery of new passenger buses from Cobus, forklift trucks and additional cargo and baggage trailers have been added to the fleet of GSEs. A new Goldhofer AST-2R towbarless push back vehicle entered service in February – the German made equipment is the first of its kind in West Africa and first AST-2R version on the continent. Aviance has also received a new Mallaghan Ambulift vehicle for deployment at the Accra airport.
Craig says, however, that in terms of ramp services there are a number of challenges that are unique to the region. He points to problems such as uncertain power supply, poor road surfaces, availability of qualified staff and issues with the maintenance of GSEs.
“None of the GSE manufacturers have in country sales or representation and therefore parts have to be sourced internationally or in emergencies from the local market.” He stresses that local market solutions may, in many instances, be of a lower grade than manufacturer parts but become an operational stop gap necessity.
“Costs associated to airfreight, shipping and duties also make the operation more expensive than Europe. With no passenger air bridges or fixed electrical power supply, we have to maintain more buses and ground power unit Air start GSEs than airports in Europe and the Americas.”
International ground handler Menzies has grown its African operations considerably with facilities and capabilities at eight operational airports in South Africa, three in Senegal and one each in Ghana, Benin, Central African Republic and Equatorial Guinea.
In South Africa, Menzies handles up to the A380 in Johannesburg and 747 and 747F in Cape Town and Durban. In Port Elizabeth, there is narrow body capability, with regional jet capability at other locations in the country. Dakar, Accra, Cotonou and Malabo all have capability for up to 747 and 747F aircraft.
While a number of African airports have seen an influx in capacity, especially from the large international carriers, some markets have seen a reduction with a number of regional airlines failing. Menzies senior vice president for Africa, Forsyth Black, explains the implications.
“This means that the last year or two we have been busy with start-ups and shutdowns, almost as many as each other. We would expect that as the world economy starts to improve that the former will prevail.”
The South African operation had its best year in 2011, according to Black. Through a competitive tender process in 2007, Menzies was awarded 10 operating licences by the Airports Company South Africa. The South African customer base now includes Cathay Pacific, Etihad, South African Express and British Airways. Since ground handling operations began, the company has added cargo handling and aircraft cleaning services to its portfolio.
It is estimated that during the current 2011/2012 period, South African airports will facilitate 44.4 million passengers and handle 611,631 aircraft landings putting pressure on handlers to sharpen their game. Black admits that despite the positive performance in 2011, the worldwide recession was a difficult period. “We’ve encountered stiff competition as much as we’ve given it, but we are in a healthy position and ready for whatever the future holds for us.”
Menzies recently added Eritrean Airlines and Congo DR-based Korongo Airlines (co-owned by Brussels Airlines) to its portfolio at Johannesburg OR Tambo. “We value working with regional airlines as much as the big glamorous names in the industry. For both of these airlines, we’re doing the full range of services from passenger services, to ramp, to cargo, aircraft cleaning and lounges. We’re in a great position to offer an end to end service,” says Black.
In terms of investment in new GSE technologies, Black indicates that Menzies constantly looks at new GSE options and technologies and invests in them, where possible. “Over the last couple of years, our fleet of electric tow tractors has increased, but recently our largest investment has been in airport buses. In terms of expansion in the region, together with our partners, we have been awarded a licence to operate in Dar es Salaam, and we’re pursuing a number of other opportunities right across the continent of Africa.”
Coming back to dnata, the company recently made its debut foray into the South African ground handling market with a 50 percent acquisition of catering services provider Wings In-flight Services.
The airline catering industry in South Africa is in a dynamic growth phase with strong growth in passenger numbers. dnata’s Steve Angus says the acquisition was an exciting investment in two respects: “It was our first investment since the acquisition of Alpha Flight Group at the beginning of the year and signalled our intention to develop and grow in the in-flight catering market, a relatively new market for dnata.
“Secondly, it was our first move into Africa, which we see as an area of exciting opportunity in the next few years. We were attracted to Wings by the very high service levels and quality reputation that it enjoyed in the South African market. Since then, Wings has been awarded a major contract to supply British Airways with catering in Johannesburg and Cape Town,” concludes Angus.
