JUNE 2013 GROUND HANDLING INTERNATIONAL
lease has gradually become a popular option in this part of the world. This allows the ground handlers to pass on the bulk of their responsibilities to vendors like Aviation Equipment Leasing and focus on their core business, that of providing a quality service to the airlines. GSE is one component that requires heavy capital investment and skilled labour to provide the required availability in order to support ground operations. Hence, entrusting that job to the professional, who can make available the right equipment, translates into an investment in new GSE within a shortened access time that permits support of the new generation of aircraft. “Singapore hasn’t been spared the challenges of this gloomy recession, either. Legacy airlines have had to redesign their business strategy to stay afloat while competing with the invasion of the budget airline. Those ground handlers who have chosen us as their GSE supplier have enjoyed the benefits of the operating lease thus far. Some have since renewed their GPU and ACU requirements for yet another term, whilst gradually phasing out some
of their older assets. There is an up and coming provision of GSE for Jetstar Asia that will mark another leasing milestone for AEL. Ground handlers, I feel, have increasingly understood the true benefits of the GSE operating lease in the aviation arena, which provides a greater leverage in today’s price-sensitive environment.
“Australia has proven to be another good showcase for the GSE leasing business, where ground handlers are looking at cost optimisation when faced with a profit margin squeeze. AEL has witnessed a significant growth of GSE leases in various airports within Australia, especially those of Melbourne and Sydney. One of the operators, John Holland Aviations Services, predominately owns its GSE but has switched to leasing. The leased GSE includes aircraft pushback tractors, baggage tugs, scissor lifts and so on. Other ground handlers (including AMSA, Jetstar, Toll Dnata and Menzies) have started picking up leases on baggage tugs, lavatory trucks, potable water trucks, ground power units and air start units. “Over in the Philippines, though, the
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growth is slightly slower: the conversion of Clark airport into another aviation hub is attracting a number of aviation investors benefitting from the free trade zone incentives. While much of the leasing businesses are still in the discussion stages, major ground handlers there have been seeking out AEL to provide leasing propositions to support their business. AEL is patiently optimistic that in the long run, a leasing proposition is the way forward. We take the view that ground handlers in the region have understood that survival depends very much on cost containment in this competitive environment. The region is very much engulfed by the budget airline war and by an increase in passenger flight patterns. The provision of no-frills services, reaching out to more corners of this part of the world, will continue to intensify. “During the recent Ground Handling International conference in Cebu, AEL fielded numerous enquiries from ground handlers on leasing propositions. This we feel to be a strong signal from ground handlers looking at options to catch up with this rush to fulfil airline needs.”
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