In its 25th anniversary year, Stephen Dawkins, chief executive officer of UK-based Air Logistics Group (ALG) is in a position to examine the prospects for the wider GSA industry and where his business sits in the industry.
He says: “The wider GSA industry continues to grow in a very positive direction as it has done for the last 30 years. Passenger business remains the core of an airline’s activity. Airlines look now for professional organisations to sell their cargo capacity as they continue to outsource key elements of their business. Where an airline no longer has dedicated cargo capacity it is a lot more receptive to outsourcing its cargo department. For new airlines or low cost carriers to outsource is a natural consideration in their evolution.”
He reflects on the health of ALG in the GSA market generally: “ALG has built a strong, well respected brand over the last 25 years. With a network of 88 offices in 48 countries spanning six continents, ALG continues to grow from strength to strength as it builds long term relationships with its partner airlines.”
As a UK-based firm, ALG has a position on the impending Brexit: “Brexit seems to be made into such an issue in our business, like the Year 2000, everyone wondering if the computers would switch back to zero. Business is much stronger than politics and it always finds a path to continue to operate and grow for the needs of the ever expanding number of people that we have on the globe. Brexit is a bump in the road that brings opportunity for the cargo airline industry.”
Like airlines, handlers and forwarders, GSSA businesses have also consolidated over the last ten years mainly in Europe where the pressure on commissions and yields have naturally resulted in consolidation. There is still ample headroom to consolidation in Asia in the years to come. It is a natural evolution of consolidation as the industry becomes more transparent and the increased demand from our airline clients for large bank guarantees and more dedicated services.
ALG tends to focus its efforts in the markets that generate the largest amounts of revenues. Africa is a special market where in key cities yields are very low and GSSAs tend to be owned by a forwarder or handling company.
Its independence has been a strength of its evolution, he says. “We prefer to focus on our core business, selling for airlines and servicing freight forwarders. South America will come in time; we are just waiting for the right opportunity that makes sense to expand our business in this region,” Dawkins says.
When the company celebrates its 50 years in 2044, Dawkins says: “I hope I am still around to enjoy that moment! I never thought after 25 years we would be a market leader, but I always believed that we must strive to be better than our nearest competitor. Over the years that has stood us in good stead as we have evolved into a GSSA of choice for airline partners. The natural evolution of any major business is now to outsource to continue to make profit for shareholders. I feel the airline industry is no different so 25 years from now the outsourced cargo business will be in excess of 50% of the world’s cargo revenue.”
TCM the ultimate ‘buzz word’ is very much on the industry’s lips. Dawkins says: “Our focus is on what the carrier wants and what the forwarders demand. So yes we offer every possible element of a cargo department for an airline in an RFP process. We provide a menu of services, but we must never forget that our principal makes the decisions and they choose what they would like from that menu of services we offer.
“The key now is the business intelligence that we have, with such a strong network of offices, low employee turnover, strong forwarder relationships and a state of the art IT system, we have business intelligence that helps an airline secure revenues quickly. We have lived too long in our industry with business intelligence being provided to us two months after the event. To be a market leader today you need to anticipate, secure and deliver revenues to our airline partners based on prompt quotations and the highest level of customer service to our freight forwarding clients.
How often as CEO does Dawkins get out to ‘kick the tyres’ in all ALG branches? “It’s 25 years of ALG! This is the year to get around every office in the group!” he states.