In a competitive marketplace, ECS Group chairman and chief executive officer (CEO), Bertrand Schmoll, says his firm is finding customers are expecting delivery to be faster while the increase of global trade, development of e-commerce and online sales is raising flows in Latin America (LatAm), Africa and Asia, especially India., but it is all about being global: “Europe remains an important market. We are wondering if growth of airfreight is going to flow the same as increases in passengers,“ Schmoll says. ECS is targeting every market, but specifically Asia, the Indonesian subcontinent and LATAM.
The mature European market is fairly static, according to Air Logistics Group chief operating officer, Stephen Dawkins. His company is focusing its attention on Asia, where it thinks the strongest growth opportunities exist. “There is year-on-year double digit growth in Asia through Australia, Hong Kong, Singapore and others. We are growing organically and through acquisitions,” he says.
Global GSA Group is focusing on LatAm according to its CEO Ismail Durmaz, to grow its footprint in the region. He says it will be representing four or five airlines in LatAm and adds: “We are going to open up four or five offices across Brazil, Argentina, and Bolivia.” Asia continues to offer good growth Durmaz says, and it now represents sales for Air India.
As for the performance of different markets for the HAE Group, its director, Neville Karai, says business to and from LatAm is on the rise and targeted due to high yields, but sales East bound across the Atlantic is down, which is driven by available capacity. He adds: “Our business to Africa continues to grow as does our business in the Middle East and parts of Asia.” HAE is targeting North America and LatAm, mainly driven by airline networks. Karai says Europe and Asia are also a focus, as demand is growing for e-commerce and Africa through network development and demand for project cargo and charters. Karai says HAE has won contracts in Ireland for Singapore Airlines and in the UK for Sri Lankan Airlines.
Kales Airlines Services says airlines still require strong GSA partners who can provide them with quick access to new markets. Kales has planned new acquisitions in the Far East. As for Europe, Kales’ CEO, Peter Kales, says: “The European market is still quite good, although imports from Far East have slowed down. Exports still continue to grow, but not so much felt due to lots of new cargo capacity…by the Middle East carriers.”
As competitive as the market is, there are growth opportunities for GSAs in Dawkins’ view, as e-commerce, pharma and mail thrive. “In the medium and long-term people are ordering more from the likes of Alibaba. E-commerce is the future for the next five to 10 years.” Dawkins sees plenty of room for growth as sales through third parties only account for 20 per cent of the market: “If third party sales continue to grow and we can maintain the yields, then there will be good growth. Airlines are looking to improve sales and the GSA is key to growing business.”
Karai also sees growth being driven by pharma and e-commerce, as companies are feeding postal lines and business to consumer GSAs. Growth will be mainly through capacity, Karai feels, but with slow economic growth and increased competition, it remains a “buyers market” where good service is the minimum requirement, but yields will decline as carriers work to increase market share. Like Karai and Dawkins, Schmoll says e-commerce is important along with pharma and ECS is focusing on these areas. He explains that ECS now represents Royal Air Maroc in the US, Ukraine International Airlines in Turkey, Jordan and China, and SkyGreece Airlines in Slovakia.
In the view of Durmaz, GSAs must change and diversify their services. He tells ACW that Global GSA Group is among three firms tendering to operate Maastricht Aachen Airport. Durmaz says the company wants a hub in Europe where it can service carriers, as the market is changing and is trying to think like an airline. “If the airline sees the GSA as a customer, saying no to a GSA is more difficult. We would like to not only be the GSA, but want to offer trucking, handling and other services, becoming a partner with the airline,” Durmaz says. He adds the Global GSA Group is changing its model, and winning the tender would add a new dimension to the business. “As a GSA we are in between and need to take the risk and have assets. I do not think the kind of GSA we have now will stay,” Durmaz adds.
Business is tough for European GSA’s especially within Europe, but there are still global opportunities to take advantage of.