Be my GHA
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Posted Date: 06/05/2008
Issue: Airline Handling International June 2008
Publication: Airline Handling International
With destinations in Europe, North America, the Caribbean, the Middle East, Northern Africa and Central Asia, bmi operates an extensive network. The airline has its operational hubs at Manchester Airport and London Heathrow and, in January 2007, it acquired British Mediterranean Airways, an operator of mid haul services. bmi's global reach is further extended by its membership of the Star Alliance.
The airline has its own low cost subsidiary – bmibaby – operating from five UK airport bases. It has also committed to using technology such as e-ticketing, online booking, and self check-in at the airport and via the internet, resulting in punctuality records of which it is proud.
During bmi’s 70 year history, the airline has not only developed its network and fleet, it has also developed its aviation services business. BMI Ground Handling was established and was sold to the Go-Ahead Group in 2001 and merged with other providers to create Aviance UK.
Despite the sale of the services business, today bmi still self handles above the wing at Heathrow, Manchester, Edinburgh and Glasgow. This entails ticket desk, check-in, despatch and load control. “We very much wanted to keep our own people at Heathrow, Manchester, Edinburgh and Glasgow because we felt that we would have more control over the customer experience if we were handling ourselves. Those stations were big enough to warrant our own teams of people,” explains Dominic Paul, Director of Airport Services, Ground Operations and Cargo at bmi.
Outsourcing stipulations
When asked whether, given its history, the airline has tended to gravitate towards Aviance services both in the UK and through the Aviance network or whether economies of scale can be achieved through Star Alliance membership, Paul responds: “Every new station that we go to, we will make a decision based on who is there, who is going to give us the best level of service and who is going to give us the most competitive price.”
Paul clarifies further: “We have a whole series of rationale on which we will base a decision. These include the questions: Can the handler run a safe and secure operation? Is this a customer focused company? Is the price level right? If we can get cost savings because there are other Star carriers being handled by this particular handling agent, that is great; but we will make the decision ourselves based on the best quote.”
The airline – in keeping with the vast majority of airlines – relies on the standard IATA handling agreement with added service levels built in. “We can’t always get exactly what we want because at some of the destinations to which we fly we cannot make all the changes we would like to within the contract,” Paul explains.
Technology led check-in
Passenger check-in is very technology led at bmi. “We have a huge focus on self-service devices (SSD) and online check-in,” says Paul. “We have felt for years now that this is the future. We have tried very hard – and succeeded in – making the customer journey simpler through the airport and driving costs out of the airport operation by automating as much as possible. But we only do this where we feel that this works from a customer experience point of view.”
The airline has achieved significant success in encouraging its passengers to check in using SSDs and online. “We have pursued this relentlessly,” Paul says. bmi’s strategy at Heathrow Terminal 1 illustrates just how devoted this airline is to automation. “All our economy passengers use SSDs and then they go to a fast bag drop. I think we have a very slick and focused operation.”
All the kiosks – or SSDs as Paul prefers to call them – are owned by bmi. The applications are all bmi specific and there is no common use element to the bmi strategy. “Because this is not a CUSS system, we can control the passenger experience much more closely. We can decide exactly where the kiosks should go and what the passenger flow should be. Whilst we’re still investing in SSDs, online check-in has to be where everything is heading.”
Paul comments that there is scope for the baggage drop process to become more slick. “We are doing a lot of work at the moment on seeing how we can improve that further, bearing in mind that there are certain things that have to happen, such as the asking of security questions. That will be a customer benefit but it will help us as well as we will need fewer desks if we can make the transaction time faster.”
Avoiding bellyache
bmi does not operate freighters; only belly cargo is carried. This presents a whole series of challenges on the ramp to ensure that the loading and unloading of belly cargo at the same time as passenger boarding and disembarkation does not compromise safety, turn times and adherence to agreed processes. Does BMI put in place its own teams to oversee these operations or are they outsourced entirely?
“We have a thriving cargo business,” comments Paul, “particularly now that we have 17 new mid haul destinations as a result of our purchase of British Mediterranean Airways. We have now got a whole new set of routes that have got a huge amount of cargo potential and indeed we are carrying a significant level of cargo on a lot of those routes already.”
Cargo handling is outsourced along with ramp operations. The airline has also put its own staff in place to oversee cargo handling operations. At destination airports, a similar tendering process is pursued for cargo handling services.
“Our philosophy is that we like to reward good performance,” comments Paul. He speaks in terms of implementing the right checks and balances to ensure safety is never compromised. Of course many of the low cost airlines – a sector of which Paul is a veteran – pursue ramp performance incentives and Paul buys into this way of thinking as long as there are no compromises.
All refuelling, catering and aircraft cleaning contracts are negotiated separately because they are generally separate businesses, he says. Paul also pursues handling contract negotiation for bmibaby, but keeps the two sets of handling agreement separate.
Broadly speaking…
Broadly speaking, Paul sees a need for greater consistency in quality across handling providers. “There is friction between airlines and handling agents because airlines generally make low margins and so do handling agents. Airlines can be short termist because they are focused on the bottom line and that means that handling agents, historically, have not been confident about investing in their businesses because they are not sure how long they will keep that business,” comments Paul.
“For the ground handling industry to work better, it would be great if more investment could be made in equipment, IT, training and putting 21st century process in place. That would be an enormous step forward,” comments Paul. “I understand why the handling industry is where it is – and I think the airlines have played a large part in that – but there is no doubt in my mind that the handling industry does need to enter the 21st century and I think that will, in the longer term, lead to lower cost bases and better products and services for the airlines. But it will take upfront investment and, in some companies, a completely different mindset.”
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