What do GSAs do now?


Recent years have seen a major game-change for general sales agents but in the face of uncertainty as Europe lurches ever closer to the precipice and the Chinese machine looks to be slowing down, the future is bright... at least for some.


I


n the last few weeks Flavio Renfer, managing director, Covio, has spoken to a number of general sales agents (GSAs) from across Europe. More or less the outcome was always the same: the current business model no longer works.


Over the last decade the GSA business has changed a lot, and


Renfer believes that at least 50 percent of GSAs based in West- ern Europe cannot cover their costs. So at a time, like the present, when tonnage and revenue is decreasing, this provides a significant challenge. If GSAs wish to survive, they need to adapt and evolve, he added. “At the moment it is all


based around bleeding your competition to death,” he said. There needs to be a general consensus that GSAs should start acting as an industry. After speaking with the pas-


Renfer: As an industry we are strong


senger side of the business, Renfer found they both face the same challenges: “Sur- charges are rising, revenue from net sales is declining, and at the end of the year we get less while the level of work required has risen.”


GSAs charge a percentage on the revenue they generate for


their customers. However, if the same contract rules apply in Western Europe and the Indian subcontinent, in Renfer’s opin- ion, this is not going to work. Current rates are approximately five percent of net sales, and when you have certain parts of the world being sold for euro 0.20/kg, five percent of this works out at euro 0.01/kg, he claimed. Renfer estimates that in countries with high labour costs a GSA needs to make around euro 0.11 for each euro of revenue generated to keep the business going.


Cismat targets the Caspian


ITALIAN-headquartered- general sales agent (GSA) Cismat has teamed up with cargo carrier Avient to work on the airline’s new Caspian operation. Avient will be providing


a scheduled service, with its first flight set to depart 1 October 2012 from Liege offering main deck capaci- ty and the ability to carry dangerous goods to the final destination. The service is currently


set to operate into Kaza- khstan, Turkmenistan and Tajikistan, with Cismat taking responsibility for booking up the space out of Italy. Francesco Traverso


Tardy, president of Cismat, said: “Existing agents offer competition, which we will have to face, but it pre- sents Italy with a bright future, especially as busi- ness with the US is currently suffering.” Potential from the


Caspian comes from its oil and gas supplies, two mar- kets proving strong in Italy. Tardy is optimistic about the future, “book-


1 October 2012


Tardy: The Caspian presents Italy with a bright future


ings in and out of Italy on oil and gas is strong, with inflation lower than two years before,” he added. Cismat has maintained


its 2011 volume, reporting a slight reduction on mar- gins, and although the June and July world mar- ket was low, Tardy is confident of Cismat finishing the year in profit. This is Cismat’s second


partnership with Avient, having garnered the contract to work with the airline on its African operation.


Both sides of the business should learn from general


handling agents (GHAs), Renfer declared. While GSAs are deal- ing with percentages GHAs have adopted a fixed rate per kg. As a body GSAs could also impose this rate structure on the indus- try, but while scrabbling around competing fiercely against each other GSAs will not be able to pull themselves from the slump to be taken seriously. Renfer whole-heartedly backs a move to unify, and understands that as an industry GSAs are strong enough to be considered an equal partner among the airline industry and can collectively pull each other back to the negotiation table and lay the facts down. But this can only happen with unification, he added. “Fortunately, airlines still hire GSAs to fill up their aircraft,


but it has come to a point where a lot of creativity is required to compete and proffer some semblance of success. Covio has


brought in highly paid professionals to work on a special task of generating additional revenue for the company. But, truth be told, these additional services were of no great benefit to the air- lines Covio has as customers” said Renfer. These revenue increasing schemes included the addition of added value services for airline customers, such as trucking and import-related work. “As it stands a GSA likely has one or two solid customers prop- ping up the other carriers in its portfolio. In the case of Covio, it was required to expand its activities if it wanted to stay in business,” he said. “Alongside standard GSA offerings, Covio now provides char-


ters, split-charters, and onboard couriers. Had we not brought these additional services in, even as a small GSA based in Switzer- land generating CHF8million in revenue, the business would have failed,” he concluded.


➤ Page 11


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16