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Old 4th Sep 2008, 05:49   #1 (permalink)
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Ground Handling Contract Pricing.

In the thread on Aviance and Aviance LGW (Merged) Call100 wrote the following:
All the GHA are struggling because of the greed of the Airlines. It will only end when the GHA all agree it's too low to continue and tell the airlines that the competition will be on service alone......Many GHA start contracts at a loss in a vain hope that something will come of it later.....It's always those on the coalface that suffer...
Having followed but NOT become involved with the threads that deal with the problems faced by front line Ground Handling Staff due to airlines appearing to demand more and more, for less and less money, I can understand the frustration and indeed anger at what is becoming an apparently vicious circle. In an attempt to make sense of what is happening in the Ground Handling Industry I have decided to start this thread. Some of the following states what appears to me to be the obvious, however I think I must be seriously missing the point!
  • Airline Contract Negotiators will always try to get the best price for the Service Level they require. That isn't greed that is their job.
  • Ground Handling Company Negotiators on the other hand are trying to get, or just as importantly keep contracts at a price that will meet the Service Level demanded by the Customer and still make a profit for their Company.
  • This is the same process for Service Providers and their Clients in all industries.
But in Ground Handling this process seems too have 'tipped' the Airlines way and in the long run will be as damaging for Airlines as Ground Handling Agencies.

Even from my limited and none of it recent, experience of this process between Airline and GHA, there were what I assume were isolated instances where the GHA Negotiators accepted high Service Level Agreements at ridiculous prices, or in one case assumed they would get the contract by default:
  • Whilst in the first case there were very good reasons for signing this contract, unfortunately the Mangement felt they couldn't explain their reasoning to the front line staff, but the fact it was below cost leeked out resulting in resentment and low morale.
  • In the second case when the Airline Negotiator came back from the finalisation, there was no sense of triumph because he knew that the price that had been agreed was untenable for the GHA, but it wasn't his role to tell them that and that they would have to come back to the table after a few months. However in that few months the Airline saved a lot of money and because they had Quality Assurance people monitoring the flights , the GHA couldn't cut any corners (although they did try).
  • Finally a GHA had been fortunate enough to keep a contract for a very long time. The Airline appointed a new Man to run that Airports Operations and he was stunned at how poor the service his airline was receiving. Until contract renewal he did what he could, whilst at the sametime talking to the other GHAs at the Airport. When contract renewal came up he set out the the Service Level Required to all GHAs. The incumbent GHA was so complacent they did not set out how they were going to meet the required standard and lost the contract to a slightly higher bidder, who detailed exactly their investment in the contract and made a signed Service Level Agreement as part of the contract, whereas the incumbent had offered a non-binding SLA.
In the last 10 years or so in the UK, it appears that due 'competitive pressure' some GHAs are routinely (instead of isolated misjudgements) agreeing contracts where the Service Level and Resourcing don't match, or if they do then they are under estimating the cost of achieving this and therefore the contract instead of making a reasonable profit, is running at cost, or below cost.

Whilst this sort of behaviour is unsustainable, it does appear to have been going on for years and since I have been following this forum certainly seems to be getting worse.

The question is really why has this situation got to this point?
Has the 'churn' in GHA Companies both been the initial cause and then the perpetuating effect, with new Entrant Companies offering silly pricing to get some initial contracts and the existing incumbents then matching these prices, or going even lower to survive, which then leads to a vicios circle of over competitive pricing?

To be a full service GHA requires:
For a full range of Ground Equipment and therefore either a high initial investment, or an ongoing leasing cost, coupled with budgeting for replacement.
An ongoing Maintenance cost for the above equipment
Even if initial recruitment is aimed at experiienced staff there is an ongoing basic training and contract specific training requirement cost.
Ongoing rental of Terminal and Ramp offices, facilities ranging from Check-in Desk rental through to IT.
Plus if your sensible an internal Quality Assurance unit.

So being a full service GHA with ambitions to remain in business is not cheap so why does it appear that some want to commit business suicide?

Can someone tell me what I am missing here as if even half of the above is correct, then at some Airports in the UK the competng GHA are driving themselves out of business. As one disappears from that Airport a new Entrant appears and at best continues the cycle, at worse exacerbates it. This does make sense, and yet appears to be the case!

Last edited by Opssys; 5th Sep 2008 at 16:29.
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Old 4th Sep 2008, 11:40   #2 (permalink)
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The UK market changed when the regional airports divested themselves of running their own ramp operations to meet the EU competitions legislation. Prior to this, the 'profit' of the main UK GHs was from the regional airports; the majors, where the GHs already ran ramps, fluctuated between good profit and big losses on a years by year basis - very few GHs achieved sustainable profits in the main 3 airports at the time LHR, LGW and MAN.
When the regional airports divested their ramps there were several factors:
  1. Regional airports rarely ran their ramps as fully costed departments
  2. The airports' fees did not reduce in true proportion to their costs
  3. GHs failed to secure the step change in fees required to operate full ramp operations over a sustainable time
  4. The airlines pleaded poverty (what's changed?) and, in particular, the UK based operators were accepting big increases in fees (monopoloies have the advantge - take it or don't operate) from national agencies in Europe and then offering the remains of their budgets within the UK. An example of this is a well known LoCo who was paying more than twice the UK rate for handling in another EU country.
Sadly, at around the same time as this was happening the UK GHs employed some high level 'hackers and slashers' who thought that there were huge savings to be made in labour, and other, costs without understanding the first thing about the dynamics of operating a GH at the coal face. They would cost on absolute basic provision, no 'flesh' for off schedule costs, training, GSE sustainability etc - even know of one who claimed that "regional airports did not have any administration costs and therefore did not need any administration budget". That led to operations failing to deliver against SLA's which, in turn, meant that when renewal time came around the airline was in the box seat.

Some of the airlines, at the same time, employed 'purchasing/procurement specialists' who were looking, not unreasonably, for the lowest cost but often did not manage to balance a fair price for a service delivered and would trade GHs off against each other knowing that redundancy, TUPE etc is a huge cost if the contract moves.

There have been signs, and examples, over the last couple of years of GHs fighting back and walking away from airline customers when they are not prepared to pay realistic prices for the service they want. Several airlines have followed their 'lower cost option' only to regret it and go back to their original GH at a realistic price.

Until the GHs have the confidence to back their costings AND are prepared to deliver what they have contracted the future will continue to look more red than black on their balance sheets.

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Old 4th Sep 2008, 14:33   #3 (permalink)
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Much of what's been said in the last two posts is accurate ..........

But I believe that at right at the base of all this is the underlying problem of how to run a handling agent and make the required profit margin.

It's my understanding that on the whole the best HA's out there are lucky if they scrape a 3% margin ... most company boards these days require a minimum return of at least 6% on their investment .. in fact they are probably setting their management teams targets of around 8%.

Now you come to what airlines are able/prepared to pay for the services they require and whether they actually contract for what they need.

That last bit .. what they need .. is important .. and it doesn't always match what they want!

I have experienced having a "cost plus" contract agreed with a major carrier based on "open books" policy. That is they accepted the and agreed the profit margin that would be made for the handling of their operation.

Dedicated resources were used to service that carrier and the HA's books were freely open to the carrier .. including details of how any apportioned costs were allocated/shared.

Both parties agreed this was a "grown up solution" and worked in the best interests of both. The airline got the service it required and was happy it was paying reasonable costs for that service ... indeed the airline itself made the point that this agreement gave it stability and removed the problems associated with constant contract changes.

The contract was still out to general tender at renewal each time and was subject to benchmarking during it's lifetime.

This worked well until the carrier demanded year on year reductions in charges to be written into the contract at renewal. At first this was agreed to as the contract remained sufficiently profitable and the airline made the case of "hard times .. our suppliers must share the pain.." etc.

However .. eventually it reached the point where if the reductions continued then little or no proft could be achieved.

The HA went back to the airline and pointed out that any further reductions would make the contract untenable ... the airline response was "we continue to suffer from the current economic problems in the industry and expect our contrators/suppliers to support us in reducing our cost base".

This was somewhat rich as the airline had actually worked with said HA looking at the way in whic it ran it's self handling bases. The airline agreed that they were less efficient/cost effective/service quality focused at own bases and that the HA's operation was as efficient as it could be at that price.

Airline suggested cutting service levels which would allow HA to reduce costs (i.e. resources) .. HA said OK but then we need to reflect that reduction in the SLA's so it doesn't result in financial penalties .. airlines says .. nope SLA's and penalities stand ... !!

This airline is now being handled by annother HA.

Earlier I mentioned Airlines actually contracting for what they need .. I've seen many instances of airlines knowingly/unkowingly not including a requirement for somehting in the handling contract and then not being willing to pay when it's need becomes clear. This either leaves the HA to try and absorb the additional task/work (under threat of risking the contract if it tries to charge) or a "loose end" beinf fudged around.

AN exmaple of this is a low cost carrier who does not wish to contract for turnaround cleans as this is done by the cabin crew.

Fine and dandy until the cabin crew chuck the rubbish bags at the bottom of the steps just before the a/c pushes back. If your lucky the HA will put said bags in the hold for disposal at carriers base (assuming that's where they're going ) .. if not you now have FOD blowing around.

However, low cost carrier when it starts getting it's own rubbish back in the holds complains ... 'cause it's home base HA is objecting to removing/disposing of said rubbish as it's not in the contract!!

Anyone for tennis??

Bottom line is the critical decisions are being taken at a high level in HA/Airlines based on overall costs/margins ... it's then been passed to an operations area to "get on with it and make it work" ... which doesn't mean it's actually possible to satisfy al parties.

Meanwhile you will get "churn" as each HA has a go at the contract thinking it can do better and then dropping it when it can't.

I believe there is also a problem with HA's not fully understanding airlines sometimes ... I've been lucky () enough to work in both camps..... I'm sometimes surprised at how a handling agent thinks it's done a good job when the airline thinks the opposite.....

Think I'll stop now and go and lay down
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Old 4th Sep 2008, 18:10   #4 (permalink)
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First a huge thank you to groundhand and 42psi for there detailed responses (and for not having ago about how my original post could have been better structured),

Whilst both posts have improved my understanding of how this situation has come about and is as some Airports, or for certain Multi-Airport Contracts being perpetuated.

But there are a few areas where the replies have raised more questions:
In 42psi's post there is the following:
Now you come to what airlines are able/prepared to pay for the services they require and whether they actually contract for what they need.
Earlier I mentioned Airlines actually contracting for what they need .. I've seen many instances of airlines knowingly/unkowingly not including a requirement for somehting in the handling contract and then not being willing to pay when it's need becomes clear. This either leaves the HA to try and absorb the additional task/work (under threat of risking the contract if it tries to charge) or a "loose end" beinf fudged around.
I assumed that both parties would use the IATA Standard Ground Handling Agreement (I think the current version is 2003 and there is a major effort this year to upgrade it and to include an SLA template) as the basic template from which the Airline would build its detailed requirements and against which, when this document presented the to GHA, they could query any service/function and request clarification, including items marked as nor required. Because without this process GHA cannot cost their contract bid especially including fees for 'on demand service requests'.
The example used by psi42 was:
No turnaround Cleaning required as requirement met by Cabin Staff.
This appears to be perfectly clear. But as psi42 discovered this bald statement doesn't cover what to do with Waste Bags and also doesn't allow for the possibility of 'on demand assistance' where there is a specific requirement for dealing with an unfortunate incident resulting in a mess that must be cleared before departure.
Even if the Airline tries to just state the one line, surely any GHA negotiator is going to want that statement clarified?
Another example off service not normally required, but essential 'on demand' is the incredibly rare event of APU failure when suddenly a GPU and possibly ASU are required. These irregular events SURELY have to be costed in?

Staying with psi42 for the moment.
I am not normally a fan of 'cost plus' contracts, however from your post I must admit the GHA worked really hard to make the contract work to the benefit of both Airline and themselves. The fact that the Airline then squeezed until the contract was untenable only proves to me that 'bean counting' as the sole objective is a dangerous trait.
I have operated in a 'more with less' environment where not only were there less resources, but the Service Standards were set higher. It can (and did) work for a while (months, possibly an entire season), but in the longer term something has to give and that normally is Standard decline at an ever increasing rate, because the best staff have enough and move on.

I realized Margins were low but 3% isn't being in business it almost being a charity.
GHA not understanding Airlines and visa versa. As the supplier the GHA really does need to understand the customer, otherwise how can they translate what they wrote into what they meant. Don't get me wrong this not an easy task even if the Carrier is from an English Speaking country, but again if the GHA cannot get clarity at contract stage then the hidden problems that arise will increase costs and erode a 3% margin to zero very quickly..

Thank you for explaining how the change at UK Regional Airports resulted in a paradigm shift in the GHA Environment in the UK, which was coincidently coupled with what you call the 'hackers and slashers' who trimmed to the bone and then carried on trimming.
That explains a lot (although 'Hackers and Slashers' have made guest appearance in GHAs since the 1970's, normally leaving just in time for someone else to clean up the mess).

As for the Airline side of the equation, going cheap and cheerful is always very very tempting (and it happens in every industry), but how low you consider going has to be a balancing act. For an Airline trying to project a image of High Quality Service then a cheap GHA contract which you know is untenable can ruin you reputation with Passengers using that airport, even if they have no option but to fly with you on a route, or routes. An Airline which prides itself on being Cheap and Cheerful, may think it can squeeze a GHA until the 'pips squeak'. But they also depend on minimum ground times to maximize utilization and if they go too far then delays at that Airport will increase and suddenly they are costing themselves more than they save.

In service provision there is always a trade-off between cost and quality of service, but in many industries it is recognized that the Service Provider and the Customer are also partners because overtime the Providers understanding of the Customers Requirements means that they can actually make positive suggestions on how to further improve. This it appears has been lost in the Airline/GHA relationships and Cost of Service has become almost a Holy Grail from the Airline Side.

Whilst I now understand how this 'unbalanced' relationship occurred and why it has continued to become in some cases self-perpetuating. The 'normal' factors that should have restored a sensible balance have often been nullified by circumstances either general, or specific to an Airport..

Both Groundhand and psi42 indicate in their posts that at least some GHAs are now trying to redress the imbalance, but with the Credit Crunch/Fuel etc the timing is unfortunate.
Once again thank you for your posts!

Last edited by Opssys; 5th Sep 2008 at 11:54.
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Old 5th Sep 2008, 10:26   #5 (permalink)
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The SGHA now has a 2008 version.

My small input over and above the usual high quality posts from GH etc. is that the SGHA itself is also part of the problem.

A GH will respond to an RFP (with or without an SLA). Every response therefore will be very similar. All boxes are ticked with only one real difference.


Agree with GH that now the tide is now turning and quality, profitability and sustainability are now top of the agenda for the handlers.
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Old 5th Sep 2008, 11:53   #6 (permalink)
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Thank you greuzi for your post.
I have just skimmed through the 1998 and 2004 Versions of SGHA and assume the changes for 2008 are evolutionary rather than dramatic?

I can see how the Carriers RFP would lead to an all boxes ticked result from all the GHAs (something common in other service provision industries) where the only apparent difference is price.

Whilst not personally directly affected, I hope Groundhand, psi42 and yourself are right and the GHAs are breaking what had become a vicious circle.
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Old 5th Sep 2008, 22:22   #7 (permalink)
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my view

I have only worked on the GHA side of the fence but now work closely with airlines. I believe the following issues contribute to the problem

Both the GHA and to a lesser extent the airline have commercial departments, usually these people have little current front line experience. Once the contract is agreed it is passed over to the operational people to implement and little is seen of the commercial people until its time for the renewal. What was agreed and understood by the commercial people can and is misinterpreted by the operational people. The commercial people do not always understand the day to day operational requirements and the case of the turnaround clean raised by 42psi is a classic example of this.

The requirements of the contract are usually confidential when in reality it’s only the price that should be confidential. I can remember my former employer resigning contract with a large based carrier. It was agreed that the duty teams from the GHA and the airline would meet to review the operational aspects. The problem however was neither the GHA nor the airline believed that the operational people should be allowed to see the contract. The result was the GHA staff did not know what they should be providing and the airline staff did not know what they should be receiving. It would help if the Annex A agreements and operational SLA data was available to the front line staff.

The SGHA is an issue, it is reissued every five years and a working group meets twice a year to discuss what changes should be made, again the participants are usually commercial people. The next meeting is later this month where the first draft of the 2013 contract will be discussed. In an industry moving this fast the annex A can fall behind. A prime example of this would be e-ticketing where check in and ticketing functions are overlapping, nowhere in section 2.2 of the annex A is e-ticketing mentioned yet this is the 2008 version and paper tickets have all but disappeared.

I was involved in the discussion for 3.6.4 (2) provide / arrange for delivery and pick up of mobility devices at aircraft doors or other agreed points to be specified in annex B. originally this was going to say provide / arrange for deliver and pick up of mobility devices at aircraft side. I argued that aircraft side was too loose and that the ramp would interpret this as the bottom of the baggage belt whilst the PRM supplier would believe it was the top of the aircraft stairs. The list was then expanded to about 8 locations before we eventually settled on "other agreed points to be specified in annex B". the likelihood of the airline or the GHA commercial manager knowing each airports operating procedures to the degree that anything is placed in the annex B is remote in my opinion.

The industry has changed dramatically over the last few years with the advent of low cost carriers they require much less and assume higher volumes and quicker turn rounds equals a lower handling price. This is not always the case for the GHA, in the case of a large based carrier the GHA will have a large staff which will require a back office to manage rosters and worl allocation additionally more supervisors and team leaders will be required all of which increase the charges. The airline’s economics dictate the aircraft must all leave at the crack of sparrows so there is a peak of ramp activity between 0530 and 0730 and then again between 1130 and 1330, the afternoon peak between 1730-1930 before all the aircraft return finally between 2230 and 0030. This will gives the GHA about 4 productive hours on an 8 hour shift. But means that any work between these times is essentially 100% profit hence the low prices offered to win suplimentary business.

All that said it would appear that the GHA’s are now beginning to dictate the pace a little more and the handling prices will start to rise. I would hazard a guess that none of the Aviance Gatwick customers are paying less for the handling with the new company than they were with Aviance.
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Old 5th Sep 2008, 23:26   #8 (permalink)
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Another good post STN Ramp Rat

Am glad I am not the only one believing that the SGHA contributes to the issues the GHAs face. That said...it isn't going away and is not the solution in isolation at all.

Just thinking outside the box for one moment...the major advances within the logistics industry came when vendor, supplier and customer information was freely shared. DELL computers is a very good example.

Can that happen in the GH industry?
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Old 6th Sep 2008, 18:04   #9 (permalink)
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Just caught up with this and pleased to see that for a PPRuNe thread it's still astoundingly on topic

I would clarify that I don't actually hold the view that things are improving within the GHA world

As has been mentioned .. those negotiating the contracts are often so removed from operational knowledge that they are making choices/decisions which may well be impossible to achieve ... the frightening thing and the biggest problem with this is thay they are doing this in complete ignorance and with the conviction that they are actually putting together a good deal for both parties.

Some of the best contracts I've seen have been negotiated by ex airline people who've moved over into the GHA business.

This is not because of any failure by those who've experienced only GHA but because they were able to easily spot and correct the "holes" that would allow service anomolies to fall through.

Why don't I think things are actually improving???

Well there are many recent newish entrants to the GHA business ..... I'm not convinced they are winning contracts on service/reliability rather than cost .... they don't have a long enough history to be able to prove to an airline that they can deliver ... that represents an element of risk to an airline.

That risk can be acceptable if the cost is low enough to make it worthwhile.

That means contracts are being won/lost based on cost.... back where it all started!!

It seems to me that many of the airlines have also lost the ability to be able to size up if the resources being quoted by a handling agent are actually realistically going to allow it to deliver on it's promises.

I saw a phrase in annother section which I think is entirely appropriate to this .... it mentioned the risks of losing "corporate memory".

I feel that's the bit these days that is indeed being lost. It's the knowledge that says why things area actually done in a particular way and the experience to be able to adapt without compromising either safety or performance to meet new challenges.

I've recently seen a low cost carrier (not FR who always seem to get bashed!) set a requirement for it's GHA to specifically position equipment prior to arrival in a way that infringes the required safe segregation from a/c and then also stipulate that two sets of steps plus chocks (nose/main) plus mobile GPU are all in use within a two minute timescale.

Now that's OK if the contract pays to have enough manpower on hand to achieve those objectives ... as the GHA normally meets with two staff that would suggest it might not ..... it might also indicate some severe manpower problems!!

I suspect reality is a mixture of the two.

With the economic downturn about to hit home I'm not sure it's a good time for GHA's try and turn things around .. most are likely to be fighting hard to keep afloat.

We are now at summers' end (did it even start) and the next few months will be critical for those with tight margins.

Off for annother snooze now!
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Old 8th Sep 2008, 06:54   #10 (permalink)
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There have been some really interesting and very good points brought up in this thread. I have been involved in ground handling for over 30 years, and my career has taken me around the world including a lot of consulting, training and workshop facilitiation.
I have found two major issues - lack of understanding of the SGHA and misguided use of the SLA as a root cause of many of the relationship problems between airlines and their handlers. Of course there are a myriad of other issues - high staff turnover, poor management training. etc.

The SGHA Main Agreement and Annex A is a generic document, it therefore has to remain relatively vague in many areas. The Annex B is the part of the SGHA that is specific to the agreed services for a particular location. Therefore the Annex B should be where all the details of the agreement should be recorded. For example - comail. The Main Agreement (Terms and Definitions) state comail should be treated as cargo. How many places is it actually delivered with the baggage and the not the cargo?
E-Tickets do not need to be specified in the Annex A because they are covered in the definition of tickets in the Main Agreement.Virtually everyone uses the SGHA Simplified Procedure where only the Annex B is produced and signed, albeit with the Preamble stating that both parties are familiar with the Main Agreement and Annex A. How familiar are they? My experience of training and facilitating SGHA workshops is that there is a knowledge gap in far too many cases. Usually the Main Agreement is only dragged out when there is a contractual dispute .

The SLA is IMHO a key document. Where the SGHA states what services will be delivered, the SLA agrees how they will be delivered. The SLA should not be a process manual, but focus on the agreed service standards. The agreed service standards must be measurable too. Used properly the SLA can help build a non-confrontational relationship between the handling staff and the carriers representatives.

Operational and commercial people within the organisation have to work together to make sure that nothing unachievable or unrealistic is agreed in the SLA.

SLA'a do not have to have penalty clauses by default. There has been an example SLA published in the IATA Airport Handling Manual (AHM 803) for some years.
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Old 8th Sep 2008, 19:19   #11 (permalink)
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Absolutely agree..

But I also think that the SGHA as an all inclusive commercial agreement does not cover everything it should.

Firstly it is very rarely assigned to a schedule. The deviation from which introduces many unforseen and unbudgeted costs to a GHA in most cases. That is the fault of the GHA not to raise the issue at the point of negotiation, but when competing for business, many think everything will 'be ok' when the contract is theirs. Many airlines also accept contracts that factor in the costs of these problems. That could cost a punctual airline valuable revenue for a service recovery they do not ever receive.

Ultimately I want the SGHA to stay. Just to be supplemented by additions that let service be maintained and additional costs to be covered. Why? Because in the long term this will force solutions back to where the problem really starts.

Maybe a schedule cannot be met by service providers at origin? Maybe old GSE at a station makes a network struggle every day? Maybe operations on either side of the airline / handler arrangement cause problems they don't ever recognise? Rosters? Turnover? Fuelling? Late release from maintenance? Weather?

We need a transparent picture. With additional costs assigned to their origin.

Then both the airlines and handlers can reduce any fat in the operation. Get the lowest costs overall. And when something goes wrong pay fairly for the problem.

Share the problem and rectify what caused the problem at its origin so that it happens less often in the future.
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Old 8th Sep 2008, 20:18   #12 (permalink)
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Something that's been brought up and is very relevent ... how to deal with off schedule/delayed ops.

In my airline days delays/reskeds were "warned out" to all departments and contractors by 'phone with a quick check taking place at the same time that the relevent area could confidently deliver to the new timings.

If there was a problem it was worked out .. sometimes that might mean extending the proposed delay etc.

So when warning out if the fuellers/caterers (or anyone!) etc said "we can't go that time but we're OK for 15 mins later" .. then that could be reflected in the new ETD.

What I often see happen these days is the revised ETD is simply promulgated via computer for the earliest time the airline can achieve.

There is no consultation taking place to see if the handling agent/suppliers are actually in a position to realistically achieve this.

Maybe they can, maybe they can't without compromising the service to annother customer who is not delayed!

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Old 9th Sep 2008, 22:40   #13 (permalink)
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An excellent post, rereading the SGHA, I see that e-ticketing is mentioned in the definition of ticket. My point on e-ticketing was not well made, some legacy DCS systems have not kept pace with e-ticketing which has resulted in processes having to be implemented that are not covered by the SGHA, the main one of these is having to manually change coupon status because the hand back function from DCS to Reservations has failed. I admit this is less of an issue as the programmers catch up.

I am a great fan of the SGHA and agree that the primary problem is lack of understanding; yesterday I was presented with a simplified version that had no preamble and was therefore a totally worthless piece of paper

Your point about it being rarely assigned to a schedule is a good one, it is possible for the GHA to do this in the annex B, I am not sure the airline would sign up to it. I have delay clauses in most of my contracts and have never had any issues getting them written in during the negotiation.

Sadly whilst I think the issue of pricing is moving in favour of the GHA I do not believe service quality has been addressed by the GHA’s yet.
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Old 10th Sep 2008, 03:39   #14 (permalink)
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STN Ramp Rat
I am in full agreement with your opinions. It is a shame that some DCS are lagging behind on the E-Tix issue. It was not due to a lack of information, IATA started a concerted E-Tix informaton programme to the handlers and DCS providers some 4 years ago.

I believe that quality issue now requires a lot of attention. Some process re-engineering and greater use of self service for passengers would not go amiss.
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Old 10th Sep 2008, 07:59   #15 (permalink)
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STN Ramp Rat and Tyrekicker2 have both brought up the problem of DCS Systems especially those tied into certain CRS Systems falling behind in the area of e-ticketing despite a 4 Year IATA led lead-in effort. Unfortunately for the big legacy systems with multi-decade histories, changes can take a very long time to design, code, test and implement and in some cases it is finally done as a 'bodge'.or unless it has a direct commercial impact (as in e-tickets) avoided all together (I have had to design systems modules to take into account a function that despite being an IATA recommendation for over a decade most major CRS Systems hadn't adopted it. The result being the Upstream and Downstream systems had to transfer incomplete data to these systems in a form they could handle, but with the result that if the relevant screens displayed side by side the information appeared differently on both).

As for the SGHA and Anneses. Any industry agreed proforma is going to be behind the curve and as such has to be treated as the baseline for a real world agreement.

What saddens me is how the gap between Commercial and the People who have to implement appears at least in some cases got wider rather than narrowed.
Also how the lack of trust still means that he people who implement on both sides of an agreement don't actually have full access to what has been signed off.

For me this thread has so far been in part educational in bringing me up to date on what has changed and explaining why the current situation has developed and a less than happy trip down memory lane on realising how many of the 'bad practises' have continued into the modern era.
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Old 24th Sep 2008, 16:22   #16 (permalink)
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One of the things to note from all of these threads is the issue of SLA’s within GH contracts. Something which the commercial people spend hours negotiating and then fail to implement any effective system to measure those SLA’s accurately or in a media that allows sharing of the information. The Airline/ground handling arena is way behind in terms of technology and systems for measuring/recording performance and SLA’s. Most operations still rely on pen and paper to capture timings/performance of events (if at all) and then only pay any attention to data related to late departing flights where in reality other parts of the service or other service providers may be failing to deliver continuously. This is never picked up as an on-time departure covers up their failure to deliver to their SLA. As said in an earlier thread (by Greuzi) the logistics industry really did start improving once they grasped the need for collecting accurate performance data and sharing that data between suppliers/vendors in order for them all to see where the improvements could be made and what the acceptable level of resource/cost was for providing a service to the agreed SLA. Transparency (also as alluded to by Greuzi) of performance/costs will allow the GHA to work with the airline and for them all to see that the majority of the time they are delivering the required service rather than at present where they only ever discuss the ‘failures’. This would also help to remove the ‘blame’ culture that infests most ground handling scenarios. There are some new solutions out there (such as Avtura’s RATT product) which take advantage of new technology used within the logistics industry to monitor/capture the ground handling process at aircraft side which then provide reusable data to GHA, Airline and other 3rd party suppliers, both in real-time during the process (which allows for discussion re planning ETD as mentioned in an earlier thread by 42psi) and after the event for analysis/process improvements. Yes, I know the guys who developed it so I’m biased but accurate transparent measurement of SLA’s/Performance really is the way ahead if GHA’s are to claw their way back to profit and respect from their airline customers for the service they do provide.
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Old 28th Sep 2008, 13:23   #17 (permalink)
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You are spot on but I fear that the majority of GHA Management at Station level could not deliver accurate performance data even though some have the data available.

I have used a balanced information approach before with airline customers who only wanted to play the OTP / blame game. When we laid out before them even basic performance statistics like how many times we made up ground tiome after a late arrival against attributable delays; or how another service provider or their own crews were a root cause of a delay problem their attitude often changed, become less agressive and more constructive. Valid information is key to managing a customer relationship but sadly in today's business there does not seem to be many individuals who can do this.
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Old 7th Jun 2009, 11:11   #18 (permalink)
Join Date: Oct 2002
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The whole Enchilada, anyone?

... and I don't mean the Rancho Cucamonga restaurant in California

Thanks for a great post on the commercial vagaries of SGHAs.
Can anyone point me to a spot where I can download (or have a look at) the full Main Agreement plus Annex A of the IATA 2004 SGHA?

Many thanks- Max
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Old 8th Jun 2009, 01:25   #19 (permalink)
Join Date: Jan 2009
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Unfortunately I think it may all end up going the same way as the banks.

Someone has persuaded the public that they do not need to pay to fly. The airlines don’t want to pay anyone for anything, or if they do its as little as possible. So few service providers of any description can make a reasonable profit and Customer service levels get kicked back 50 years!

Just waiting for the melt down when the low cost bubble bursts and we all get covered with c**p
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Old 8th Jun 2009, 14:41   #20 (permalink)
Join Date: Dec 2006
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Where to find SGHA.

Excellent posts,with regards to the SGHA.- Airlines & GHA`S

MAX -The IATA "Airport Handling Manual" will assist you with full SGHA all versions . You can access on e service at

There are loads of ideas and examples and makes very interesting reading .

It also shows GHA`s additional charges which should be applied allowing extra revenue for the companies. ££££ time to change!

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