IATA Ground Handling Conference 23 May 2017

L IA N C E IO 2 SP DIT UE E S IS

I N T E R N AT I O N A L DA I LY 2 3 M AY 2 0 1 7 PRESENTED BY

30th IATA GROUND HANDLING CONFERENCE 21 - 24 May 2017 | Bangkok, Thailand

DAY 1 H I G H L I G H T S

Growing pains in Asia

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sia-Pacific carriers are lagging behind North American carriers in terms of profitability. And though the future looks brighter, there are challenges ahead.

In 2017, North American airlines are forecast to have a net profit margin of 8.5%, said IATA’s Asia-Pacific Regional Vice President, Conrad Clifford, speaking yesterday at the IGHC. Asia-Pacific will post a 2.9% profit margin, he noted, adding that this figure represents an average profit of $4 per passenger, whereas US carriers are generating profits of $20 per passenger.

“There is a big difference across the regions, and the reason Asia-Pacific carriers are not as profitable is because they are adding big chunks of capacity to cater to growth,” Clifford informed the audience.

“But in the next seven years, China will become the number one passenger market on the planet [overtaking the US], in eight years India moves to number three, and in 20 years Indonesia moves to number five,” he continued.

Asia-Pacific air traffic is growing, thanks to rising economic prosperity and incomes in the region. The phenomenal success of the low-cost carrier business model in the region has also contributed significantly.

But for the ground handling industry in AsiaPacific, the growth in air traffic and rising incomes is creating its own set of challenges.

David Walker, CEO Jardine Aviation Services, said yesterday that ground handlers have to deal with increasing price pressure, increasing

congestion on the ground and in the air, and an increasing requirement for faster turnaround times. All this is happening in markets where it is becoming harder to get sufficient manpower.

He suggested that working for an airport ground handler is no longer an aspirational job. Employment in the ground handling sector involves working unusual hours for unremarkable p a y.

Opportunities in other industries may seem more attractive.

“The days of having an infinite supply of workers is fast disappearing,” he warned. “This is a severe problem. It appears to be a problem across the Asia-Pacific region from Tokyo to Jakarta, Taipei, and Shanghai.

Almost everybody is trying to grapple with it.”

“Working at the airport has fallen down the ‘desirable’ list, ” he added. “We have had plenty of examples where parents have called us and said their 23-year-old ‘child’ won’t be coming to work for us anymore, because they don’t like coming home at 2am!”

K E E P U P T O DAT E W I T H A L L T H I N G S A I R L I N E S R E L AT E D AT A I R L I N E S . I ATA . O R G

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THE CHANGING FACE OF AVIATION SECURITY

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When: Where: Venue: Audience:

14-16 November 2017 Abu Dhabi, UAE The Jumeirah at the Etihad Towers Open to all

For more information, visit www.iata.org/avsec Join the conversation, use #AVSECWLD

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AVSEC.indd 1

16/05/2017 12:25

3 I ATA G R O U N D H A N D L I N G C O N F E R E N C E

Innovator competition IATA launches RampVR

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ampVR is the industry’s first virtual reality (VR) training platform for ground operations.

RampVR was developed in consultation with airlines, airports and ground service prov iders. It allows users to meet their training needs while reducing the burden of accessi ng an operational ramp for training.

RampVR is available in two modules: Aircraft Turnaround Inspections and Aircraft Marshalling.

“Improving ramp safety and reducing damage to aircraft and ground equipment through better education and training is an industry priority, but training in this extremely active environment can be a challenge,” said Frederic Leger, IATA’s Director for Airport, Passenger, Cargo and Security Products.

“RampVR allows users to safely

immerse themselves in ramp operations and experience a variety of scenarios in different operating conditions,” he continued. “RampVR also provides users with built-in metrics to track their performance, and real-time access to key reference material.”

Nick Careen, IATA’s Senior Vice President, Airport, Passenger, Cargo and Security noted that innovative technology is the key to nurturing talent and driving the industry forward.

“Virtual reality in the learning context increases knowledge retention by as much as four times while improving motivation and engagement,” said Careen. “VR is here to stay and we are already considering expanding its use in different training areas,” RampVR is fully compliant with IATA standards as set out in the Airport Handling Manual and IATA Ground Operations Manual.

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he IGHC Innovator competition is a new addition to the IGHC agenda. It is open to individuals and companies with ideas that complement and support the advances being made in ground operations.

Submissions in 2017 address an enhanced customer experience or a n i mprovement i n competitiveness. The former includes increases in safety and quality, process simplification, and system modernization. The latter comprises cost optimization, revenue enhancement, and reductions in injuries and damages.

Three fi nalists are:.

• Intelligent baggage handling – BBHS • A data platform for ground operations efficiency – DEOLAN • Virtual reality, human factors training – QANTAS.

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The IGHC delegates will be able to vote for their favorite ideas during the conference, and the winner will be announced and presented with a trophy during the conference closing.

The jury Jon Conway Director General, Airport Services Association (ASA) Andrew Badham Policy Lead, Aeroframes, Civil Aviation Authority UK Van Espahbodi Co-founder and COO, Starburst Accelerator Peter Esteie Head of Ground Operations & Airport Safety, Airport Operations, Airbus Paul J. Hansen Manager MGOS Technical Requirements Group, BCA Customer Support, Boeing

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IGHC Exhibition Cocktails

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Safety Management Systems ISAGO has been continually updated since its launch in 2008. In March 2016, for example, IATA established a strategy for the gradual implementation of Safety Management System (SMS) requirements for ISAGO-registered GSPs. This will elevate all the ISAGO SMS provisions currently in Edition 5 of the ISAGO Standards Manual from recommended practices to standards by 2019.

ISAGO reimagined

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ATA introduced the IATA Safety Audit for Ground Operators (ISAGO) in 2008 as a registration scheme for ground service providers (GSPs).

The idea was to create safer, harmonized ground operations through industry-developed standards and procedures. Better safety oversight, a uniform audit process, and the avoidance of duplicate audits through the sharing of audit reports were all part of the picture. An added benefit was reducing the costs associated with ground damage.

A decade on from its launch, ISAGO is being revamped. “To sustain the growth and the benefits of the program, it needs to evolve to ensure audit scope, quality and costs are adequately and efficiently managed,” says Catalin Cotrut, IATA’s Director, Audit Programs.

The New Operational Audit Model for ISAGO will deliver several improvements. There will be a stronger focus on a GSP’s

corporate management systems and its oversight of ground operations at the stations.

Audits, meanwhile, will continue to be conducted on an annual basis but contracted ISAGO agents will take the responsibility for the complete administration of the audits, including organizing the audit teams.

Additionally, ISAGO auditors will now be members of the IATA Charter of Professional Auditors.

Membership is achieved by completing an IATA-managed recruitment, training, and qualification process.

“What we are doing is not only making ISAGO more suitable to the stakeholders’ needs but also future proof,” Cotrut suggests.

Switchover time The switchover date for the New Operational Audit Model is scheduled for 1 September 2017, when work on the 2018 audit

schedule commences. The existing 2017 audit schedule under the current program will continue until completed.

“Obviously, there are expectations that the demand for ISAGO audits will continue to increase and so the main target is to provide enough auditors to conduct all the audits that are requested this year and thereafter,” says Cotrut Looking further ahead, there are other trends to account for and accommodate. One is a demand to increase the scope of ISAGO audits to cover more operational procedures and to ensure the implementation of safety management systems more widely within GSPs. There is also a push to gain greater recognition of ISAGO by regulatory authorities.

This would assist airline oversight of its ground operations.

“We are excited about the changes and challenges ahead,” Cotrut notes.

“A lot of effort has gone into the project so far, a lot of collaboration with the industry, and we are determined to make it work.”

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As of February 2017.... the number of GSPs in the ISAGO Registry surpassed 220, with almost 440 registered stations in over 280 airports worldwide.

ISAGO auditors had performed over 1,300 audits since the program’s inception.

In September 2016, an IATA analysis of the Ground Damage Database (GDDB) showed that…

ISAGOregistered GSPs reported 70% of their damages compared with only 32% by non-ISAGO GSPs.

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Resolution 753 draws closer

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ishandling bags cost the industry $2.26 billion in 2016, a 12% reduction year-on-year compared with the increase in passenger numbers.

Mishandling happens most often when a bag changes hands. Resolution 753 will allow airlines to combat this problem. The resolution— which was unanimously agreed at the Joint Passenger Services Resolutions Conference in 2013—calls for airlines to track a bag onto aircraft, into arrivals or into transfers. Furthermore, the tracking information must be shared with the next airport in the journey.

Effective data sharing is essential to the success of Resolution 753. Trials of systems are under way using baggage brokers and

XML messaging in the hope of introducing modern, secure, low-cost messaging. A live messaging operational trial will be held during 2017.

Resolution 753 applies to airlines only, but its implementation will affect the entire value chain. Having every airline at a busy airport each introducing their own tracking solution

would be an inefficient use of resources, for example, especially when such areas as the reclaim belt or transfer inject are often common to all the airlines.

Resolution 753 comes into force in June 2018. To assist airlines and ground handlers an implementation guide is available on the IATA website – www.iata.org/baggage.

Grappling with high staff turnover

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he ground handling industry in AsiaPacific and such other, more developed markets as North America, is suffering from high staff attrition at a time when

operators are facing cost pressures from airlines.

This means it is hard for some ground handlers to pay higher wages as a means of attracting workers. Some 70% of a ground handler’s costs are in people and wages.

Jon Conway, Director General of the Airport Services Association, said on yesterday’s discussion panel at IGHC entitled “Having Them Stay” that he has spoken to several ground handlers in recent weeks and ascertained that many have annual rates of attrition in the high double digits. One company’s staff turnover was as high as 92%, he added.

Ingrid Braeuninger, VP Sales and Business Development at Airport Terminal Services, said that one way to reduce high rates of attribution

is to manage people’s expectations when they apply for the job. But it is critical to ensure the number of applicants is sufficiently high and drawn from the many different channels, leading to a healthy pool of quality candidates at the end of the process, added Braeuninger.

Meanwhile, Mark Edwards, CEO of dnata

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Singapore, said that an issue in Singapore is the g o v e r n m e n t ’s unwillingness to let ground handlers import labor from overseas. He says importing labor would be one solution, as it is very hard to attract Singaporeans to work as ground handlers.

C o n v e r s e l y, in developing countries in Africa, there is no shortage of labor. Paul Craig, Managing Director of Aviance Ghana said that every job advertised has thousands of applicants. Craig said the problem in many African countries is the complete opposite: people get a job and never leave.

Naturally, though, there is no desire to make loyal employees leave.

8 I ATA G R O U N D H A N D I N G C O N F E R E N C E

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