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Cargo

Agents for change

Accountants have taken over the airline business and are putting their relationships with GSAs under closer scrutiny. But agents with big networks argue that they can offer good economies of scale. Martin Roebuck reports
 

The fact that GSAs usually describe themselves these days as GSSAs reflects a significant evolution in the traditional role of the ‘general sales agent’. The GSA today provides its airline partners with a variety of cargo services, from cargo sales in niche markets through to turnkey cargo management.

 

The trend is still for airlines to appoint GSAs rather than manage their own cargo offices, says John Gilfeather, sales director of ANA Aviation Services. “Apart from the carrier avoiding the fixed cost of running a sales office, GSAs tend to be more dynamic and engaged with the local market.”

 

Those choosing to outsource include the global giants in cargo – it’s not just the small narrowbody operators. Etihad reappointed ANA as its UK GSA last year after an initial three-year contract proved to be successful.

 

German-headquartered ATC Aviation Services looks after Etihad in Germany and Scandinavia, as well as Qatar Airways in Switzerland and Spain – its other main European markets.

 

The rationale is that a GSA can staff regional offices more cost effectively than an airline operating independently, explains Ingo Zimmer, chief executive officer of ATC. “You can’t just be in Frankfurt for Germany, for example, but having a presence in several different locations would cost you a fortune. We represent more than 10 airlines here and can exploit the synergies of that.”

 

ATC employs 25 personnel at its Frankfurt customer service centre and has two or three more stationed at German satellite offices in Munich, Düsseldorf as well as an all new Berlin location which opened last year.

 

Scale and track record is important, Zimmer emphasises. “For a new airline entering the German market, I’m the single point of contact. I have a 25-year relationship with the likes of Schenker and Panalpina. A local GSA representing a small narrowbody operator would probably not get an appointment with them.”

 

Air Logistics Group has a similar philosophy. Despite consolidation at main hubs, cargo continues to originate in multiple locations. “In Germany, 80% of business is at two centres, but you still need people in smaller cities,” says Stephen Dawkins, chief operating officer.

 

Airlines will usually already know the potential size of the cargo market in each originating country – “but they need the organisation to help them maintain market share,” Dawkins says. “They are looking for someone who can visit the large forwarder in Munich handling 20-tonne shipments, but also the guy in the Portakabin in Dresden with just 50kg. We might have electronic processes, but people still want to meet people and do business face to face.”

 

Long shopping list

Gilfeather charts a list of factors an airline must consider when selecting a GSA: financial stability; sales structure; product mix; sufficient human resources in each country, coupled with the ability to keep pace with the anticipated growth of the carrier; knowledge of the local market; sales performance and past sales history; management ability (and whether it has relations with agents at all levels); succession planning; overall fit; and communication.

 

“The decision on appointing either a single GSA as a global or regional solution, or a separate GSA for each country, depends on what the carrier is offering to the market and how much resource it has in order to support the GSA.

 

“A carrier running a weekly freighter from Europe to Africa, for example, can benefit from a GSA that has a European sales and reservations network. This partnership can extend to the GSA taking the financial risk on each flight,” Gilfeather comments.

 

“A passenger carrier that has daily scheduled widebody operations, a cargo team at the hub, plus a strong cargo reservations system may benefit from choosing the right partner in each territory.” >>


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