A handle on private flight
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Posted Date: 01/03/2008
Issue: Executive & VIP Aviation International March 2008
Publication: Executive & VIP Aviation International
Not all airline ground handlers seek to enter the market for handling private jets. There are many that are happy with their large long term contracts for handling numerous fleets operated by established airlines. But the airline ground handling market is dogged by downward pressure on pricing, upward pressure on service levels and consolidation. Diversifying into handling the private jet fleet can be a lucrative alternative market for handlers more associated with servicing airlines, albeit that they have to develop a very specific product for the private jet community.
Swell in Germany
Fraport Ground Services is a case in point. This ground handler – a division of Fraport AG which owns and operates Frankfurt Airport – has developed Executive Aviation Services at the Fraport Executive Aviation Terminal, which is located just south of runway 25L/07R at Frankfurt Airport. Hannelore Behl, Senior Manager of Executive Aviation Services, explains: “We offer a full range of services at Frankfurt for the private jet sector, such as: loading and unloading; transporting passengers, baggage and crew between the aircraft and the Executive Aviation Services Terminal; as well as arranging third-party services for catering, hotel accommodation and limousines.”
The Frankfurt/Rhine-Main region is one of the most dynamic economic regions in Europe and the global economy. “Over many years, we have developed tremendous expertise in welcoming and assisting attendees of various international events, such as the Frankfurt Book Fair and the International Motor Show,” comments Behl. “We can assist with flexible solutions for private or business travel needs. Furthermore, as an additional service, working with various partners, we can offer our special event charter to help locate and organise chartered air travel for small groups to any number of special events.”
Fraport’s Executive Aviation Terminal features many services and amenities for both aviation crew and passengers. It offers a spacious and comfortable passenger lounge, conference room and meeting area, VIP catering, and immigration and customs clearance.
“We are seeing a shift in aircraft types being used – bigger aircraft. As a result of this trend, Fraport is considering reconfiguring the apron at the Executive Aviation Terminal,” remarks Behl. “At the moment, Frankfurt Airport is essentially operating at nearly full capacity.” The airport has been eagerly awaiting approval from the Hesse State government of Frankfurt Airport’s Airport Expansion Program (AEP). “The AEP will give us a new fourth runway for bi-directional landings. More importantly, the new northwest landing runway will increase Frankfurt Airport’s overall runway capacity by 50% – from approximately 80 to 120 coordinated movements per hour. This means we will have more flexibility and growth opportunities at Frankfurt Airport for all types of traffic being served.”
Behl explains that, as a result of the €4.5 billion ($6.6 billion) AEP and the relocation of the Executive Aviation Terminal, the airport operator is looking for additional traffic. “We are seeing growth in Germany and Europe in the private aviation segment. There are a lot of infrastructure development projects starting or being planned throughout Europe, the Middle East and Asia,” comments Behl. “We are in a period of tremendous opportunities; but this period is equally characterised by challenges and changes.”
Golden in Greece
Leaving Germany aside, Greece has its fair share of magnates that have contributed to an active private jet sector which requires and expects high standards of executive handling. Goldair Handling is a fully licensed ground handling company, providing year-round services at five key airports in Greece, together with representation, through dedicated agents, at more than 23 Greek airports. “We have formed, at our Athens headquarters, a dedicated team to serve the specific needs of executive private jets. This is a fast growing sector in Greece, which covers the needs of State, VIP, military and ambulance flights,” comments Vangelis Vourlakis, Head of the Executive Aviation Department at Goldair Handling. “A key criterion for our success in this market is the enthusiasm of our carefully selected staff who are supported by a large organisation which is able to serve all business aircraft types.”
Goldair Handling offers a full range of on airport and off airport services, including car rental, limousine services, the chartering of aircraft, helicopter and yacht rental, catering, maintenance, customs clearance, and passenger and crew lounges. “Service cooperation has been agreed with the global support network of Platinet (Lufthansa Technik) and UAS Aviation, based in Dubai,” says Vourlakis. “Furthermore, Goldair Handling is a member of the global handling network of Servisair.”
Vourlakis maintains that business aviation flights are growing particularly strongly. “There are many underlying reasons for this growth: globalisation, which results in more business travel; delays in security checks at commercial airports; and growing prosperity which brings general aviation flights within the reach of more companies and individuals,” he says. “These factors, together with new business models (such as air taxi operations) and new aircraft types, make business aviation increasingly accessible.” Vourlakis points out that business aircraft utilisation is also up; this increase in flight hours is prompted by shared ownership schemes and more efficient management, he maintains. The increased chartering of private jets under management is clearly evident in Greece where local aircraft owners are growing in numbers and encouraging the popularity of Greece as a destination.
“This is a time of change for business aviation in Greece and in Europe. The business aviation segment is growing faster than the overall air traffic market. Since business aviation is the real point to point form of air travel, this generates time savings which make it a commercial proposition, not a luxury,” says Vourlakis. “Business jet travel spreads the already small volume of traffic amongst a large number of small airports.” He explains that, according to Eurocontrol data, only 30% of business aviation departures are from airports with more than 100 IFR departures daily. “Providing appropriate infrastructure at small airports, for example in the Greek islands, is the next challenge for Goldair Handling,” he says.
Vourlakis lists the areas of concern as follows: peaks of demand at airports on particular days; when they occur and how they could be better facilitated; how to improve procedures to give business aviation access to capacity constrained airports; how to make the most of the complementary aspects of business and schedule demand, especially as a way in which to manage the dearth of capacity at major airports; traffic complexity for controllers, particularly given the concentration of business jet flights in an already crowded airspace; and the traffic peaks from June until September which are likely to become even more exaggerated since the private aviation sector is also busiest during these months.
Italian elite
In Italy, one handling provider that stands out, but does not handle airlines, is Argos VIP Private Handling. “We have developed a series of services that are strictly customer oriented,” says Loris Di Filippo, Business Development Manager at Argos VIP. “Our goal is to satisfy every kind of request in the general aviation market, for both business and leisure travellers.” Di Filippo continues: “We provide full assistance on the ground for private, military and government flights. We follow each flight and provide a dedicated team to pursue permissions, and we make available any facilities requested including: a VIP lounge and dedicated terminal; accommodation; gourmet VIP catering; VIP transportation; and any other service a private jet passenger may desire. We also manage air charter brokering for short or long trips. Our services are available at all the major Italian airports.”
When asked for his perception of the growth of private jet charter, ownership and management in Italy, Di Filippo responds: “Our perception is simply that it is slow. This is why our major customers are international clients.”
To this end, Argo VIP is developing its services with an eye on the European and US markets; and, more recently, the Asiatic and Middle East markets have become of interest. “However, Argos VIP is planning to strengthen its presence in the Italian market too, with increased equipment and improved training also planned,” says Di Filippo. However, he is aware there are limiting factors at play in Italy that can have a negative impact on the rate of growth at home; these, he says, are largely institutional. “Italy, as a market, is mostly oriented towards improving commercial aviation instead of general aviation,” says Di Filippo. “It is not easy to achieve licenses to operate in an Italian airport to provide assistance to private flights; also, developing the infrastructure dedicated to this field of the market is not a priority for our country. However our flexibility allows us to grow and to meet customer needs. The feedback we receive from our customers – which is always gratifying – pushes us on to develop our business further.” Argos VIP also offers to customers a gourmet VIP catering service which includes a wide range of delicatessen for the more choosy palates, newspapers, flowers and any other request.
Middle East beckons
The Middle East is awash with private aviation business plans to develop the private jet fleet in the region and facilitate the increasingly international nature of trade from the Middle East. But an augmented number of operators and more aircraft on order require enlarged services on the ground to handle the aircraft and their passengers, and then turn the aircraft on the ramp. Nearly 30 years ago, Baha Hadid, an entrepreneur, had the vision to launch an aviation services company which would provide on demand aviation services. His vision became reality when Hadid International Services was established in 1981. Now headquartered in Dubai, Hadid also operates from Sharjah, Damascus, Tehran, London, Hamburg, Moscow, Algiers and Benghazi. In addition to these offices, Hadid also has a worldwide network of representative offices.
Hadid offers a diverse array of aviation services such as permits, handling, fuelling, charter and flight planning. Clients include major airlines, government flight operators, Amiri and VIP flight operators and charter carriers amongst others. Sami Habash, Hadid's Handling Department Manager, says: “We are a flight support services provider and we provide complete flight planning from A to Z. Our services encompass the whole world, including Africa, the Middle East, Iraq and Afghanistan.”
Habash explains that Hadid has grown through partnerships in some countries – such as Algeria and Libya – because the local laws do not allow foreign owned companies to establish their own companies without a local partner. “There are some locations where partnerships will be financially more ideal, simply because we do not have to bring trained staff from Dubai or Damascus to the new operation; the partner company will look after staffing,” explains Habash. He explains that new services will only be added when the market demands that Hadid diversifies into new areas. “We think we already cover most services currently required,” he says. “This is a good time for us in the market but there are certain factors that are causing pressure, such as increased competition, so it is difficult to make plans without taking the competitive risk into consideration.”
Handle on pricing
Perhaps this is the key to the way in which the executive handling business is destined to unfurl in coming years. Whereas executive handlers have tended to promote themselves in terms of quality and service, cheaper and less elaborate services may have their place in the future executive aircraft handling market if executive handling is to follow airline handling trends. But we are all aware that the airline handling business is dogged by the question: how can we make a profit from a business in which there is so much pricing competition and where safety is the number one concern? There can only be so much competitive pressure on pricing before a line must be drawn so that safety is not compromised. Let us hope that the executive handling business is able to be competitive about pricing in the future but intransigent when pricing pressure becomes intolerable from the safety perspective.
IT enablement: the key to executive handling
It is a given that private aircraft charter – by its very nature – is ad hoc, on demand and denies scheduling. This makes the handling of these aircraft little short of a headache unless the handler is exceptionally well organised. IT enablement of the processes has gone a long way towards organising the airline handling community; why should it be any different for executive handlers? Topsystem is a software provider whose aviation branch provides software systems customised for the specific requirements of airports and ground handling companies. The software – GHS - Ground Handling System – covers the complete chain of ground handling processes from contract management and flight scheduling to service recording and invoicing.
A version of the software – aimed at executive handlers, be they FBOs or other handlers – and small airports called topEXECUTIVE has been launched by Topsystem and has been installed at Nice Airport for use by Aviapartner. The system is a downsized version of the airline handler package, it is modular and it can be extended to include a flight information display system interface and resource management tools. Where an FBO experiences an increase in business, the software tool topEXECUTIVE can be upgraded to the extended GHS solution. Franz-Josef Leuchter is the Managing Director of Topsystem. He explains: “This is an integrated solution which enables the user to define the services requested, enter the flight schedule – either on a daily basis or even on a seasonal basis – and add all the additional or extra services that might be requested by the pilot or the operator. The system can either generate an invoice on a credit basis or it can generate a cash paying invoice.”
When asked whether top EXECUTIVE interfaces with other systems, Leuchter explains: “Of course, for instance, an IATA-standard message connection is available to transfer flight related, schedule related or slot related messages; these can also be adapted. The software can also operate as a stand alone system. Similarly the package can be integrated into a client’s commercial software – like (ERP) finance systems.” The beauty of such a system is that once the information has been recorded by the user, that information is then available for use in all other aspects of managing the flight handling, from fuel provision to concierge services to billing. It also acts as a reminder that particular operators prefer specific services for future handling provision.
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