Evolution of the ground handling market
Ground handling directive 96/67/EC was introduced in October 1996 as a way of opening up the market by improving competition and service levels and reducing operating costs.
The Directive made the notion of a liberalised ground handling market a regulatory requirement. In January 2001, a further phase was introduced where for certain categories of services the number of suppliers was revised to be no fewer than two for each category of service. In addition, at least one of these suppliers was to be entirely independent of the airport or the dominant air carrier at that airport.
Consultancy firm SH&E was appointed by the European Commission in 2001 to undertake a study on the quality and efficiency of ground handling services at EU airports as a result of the EU Ground Handling Directive. The final report was submitted in 2002 and examined airports under the Directive and some of the drivers for subsequent change in the industry. The findings were informed through meetings with key stakeholders, visits to 33 airports, and a postal survey to 48 airports.
The evolution of the ground handling market has been shaped by three key trends, explained Cassotis, who will be discussing at length the evolution of the ground handling market to where it is today. “There has been a dramatic shift in the growth of the low-cost carriers who have entered into new markets and provided new business opportunities. It has opened up new airports that weren’t previously open,” she said. “Another significant area of change has been the increase in the size of the EU over the years. Within each Member State that Ground Handling Directive has to be encoded in law, so the process takes some time.”
The third important factor is consolidation of the handlers and the airlines together over time. “That, we expect would improve some of the margins and further optimise efficiencies. What we are asking now is will that lead to more self-handling? We definitely see opportunities and we’re addressing where these are within the Directive,” said Cassotis.