little revenue,” admits Joe
Lawrence, adding that it takes
time to build up the share
of this traffi c in the overall
business.
ALG has set up a dedicated
pharmaceutical team. “We’re
paid on the revenue we
generate, so it’s better to
get more high-yield traffi c.
About 95% of contracts are
commission based,” remarks
Dawkins. ATC has also honed
its capabilities in this arena.
“We’re really strong in pharma
in Switzerland. We know how
to handle the tenders, we’ve
got the relationships,” says
Zimmer.
E-commerce is another
big target for most GSSAs.
“E-commerce plays a good
role for us, especially to Asia.
It continues to grow,” reports
Tubbesing. However, he points
out that yields in this segment
tend to be at the low end,
so it is important to avoid
becoming overwhelmed by it.
Honing the product
In the intensifying competition
for more lucrative types
of cargo, airlines have
been honing their product
defi nitions and are seeking to
burnish their credentials, as
the mounting popularity of the
CEIV concept refl ects. GSSAs
have not made a splash in
this arena, but Dawkins sees a
benefi t in this.
“Certifi cation is a workload,
but it gives us a great tool
to sell. We were the fi rst
organisation ever that was able
to place a reefer truck airside
on an airport in Europe. That
resulted in 25% more revenue
per fl ight departure for the
airline,” he says.
The growing interest in
certifi cation is acting as a
catalyst for the spread of
more uniform standards
in an industry that has
historically moved all kinds
of commodities with more or
less sophisticated (but often
idiosyncratic) solutions. As
with the trend to digitisation,
there have been suggestions
that this might undermine
the creative and bespoke
service that GSSAs provide, but
Gilfeather does not share such
misgivings. Standardisation is
actually an advantage, as the
differences between airlines
become less pronounced, he
believes.
This trend could gain
further momentum from the
interest on the carrier side to
team up with others for the
benefi t of extended network
reach. Arguably such carrier
alliances could push out a
GSSA working for one airline
partner, but Tubbesing is not
fazed by this.
“I see airline alignments
as an opportunity. They can
bring people together, and
you may be able to leverage
larger networks in your own
interest,” he refl ects.
ATC opened up shop in
Canada last year and boosted
its business with Latin
America through the marriage
with GrupoPFS to form the
largest GSSA in the region.
Zimmer says that further
expansion will follow, both
through organic growth and
acquisitions.
NAS now has a presence
in 27 countries, and its
global footprint will continue
to expand, according to
Gilfeather.
“We tend to focus on
territories where we feel there
is a gap in the market where
GSA representation is not that
strong and competitive,” he
explains.
Some GSSA expansion will
be fuelled with cash from deep
pockets. Historically, venture
capital’s interest in the air
cargo sector was chiefl y on
the forwarding side, but more
recently other entities in the
supply chain have come up on
the radar, notes Dawkins.
The entry of venture
capital fi rms into the air cargo
sector is ushering in dramatic
changes, Joe Lawrence fi nds.
With such deep pockets to
fund their expansion, large
multinational GSSAs can buy
airline contracts and they can
buy capacity on a global basis,
he points out.
For its part, ASI has
diversifi ed beyond the range
normally covered by GSSAs. It
has teamed up with Wings On-
Board, representing the OBC
provider in Canada. Michelle
Lawrence says that unlike in
Europe, the OBC concept was
not well known in Canada,
but business has grown fast.
“We’re happy with it,”
says Joe Lawrence. “It doesn’t
confl ict with the GSA work we
do.”
We focus on
premium products
because yields are
so low
Joe Lawrence, President, Airline Services
International
E-commerce
plays a good role
for us, especially to
Asia
Jens Tubbesing, CEO, Airline Network
Services
For their part, carriers
welcome the network effects
that GSSAs can bring to the
table. “They serve many
airlines, so there are network
benefi ts for me,” comments
Shawn McWhorter, President
for the Americas at Nippon
Cargo Airlines.
Asia - and elsewhere
“We’re always looking to
expand our business,” says
Dawkins, adding that Asia is
a major target for ALG. Joe
Lawrence has his sights trained
on Asia as well.
“We’ve been looking at
international expansion,” he
says, adding that the Indian
subcontinent is of particular
interest to him.
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