Bottom line important for IAM’s winning formula
Dublin-based International Airline Marketing (IAM), Ireland's largest Cargo General Sales and Service Agent (GSSA), says that in order to have a winning relationship between GSSA and a carrier, the job remuneration must be less than what the carrier could get if they did the job themselves, but enough for the GSSA to be able to make a fair margin for their investment. Wong Joon San reports.
July 1, 2011
“The carrier must give the GSSA the tools to complete the job and through competitive market pricing and service levels that match the customers needs, (the job can be accomplished),” he says. IAM is a leading company in an expanding group which provides services that include specialist trucking, handling and training divisions. The company has invested US$500,000 in IT over the last 15 years to boost its services. Asked about new business opportunities, McCool says: “We have one new carrier which is talking to us about a new service they are looking to start to Europe but this will take time.” The Asia business Asked about the Europe-Asia GSSA business McCool says it all depends on the trade imbalances. “As a GSSA with a large allocation on a service from Asia to Europe has to balance between the low season and the high season on this route, it tends be more of a three month peak versus an eight month peak in the other direction,” he explains. Regarding capacity trends, he says that they all fluctuated by route. “American Airlines and Air Canada have just added new wide-body capacity ex-Dublin for the summer schedule, which traditionally has a higher passenger demand period on the Ireland/transatlantic sectors. “Some Asian carriers are cutting capacity to/from Europe as the demand from some markets remaining uncertain since the Chinese New Year slow down. With consumer demand flat in many EU markets, the need to get product from the Chinese and other Asian factors to the EU markets is not showing any dramatic signs of change. “Last year many carriers added extra or new capacity from Asia into Europe as demand was high and the yield was strong. This does not seem to be the case since the end of Jan 2011 and some carriers have cut back capacity to try and get a more balanced supply and demand mix,” McCool says. IAM’s services IAM employs 15 staff who are involved in various parts of the business – handling, trucking, GSA, training, consultancy and import development. It handles GSSA services for 12 carriers, competing with nine other GSAs in Ireland. The Ireland GSSA business has developed dramatically over the last 10 years and today most GSSAs are an integral part of the carrier’s sales force. Most of the business to the airlines comes from the over 500 US multinational companies which have a base in Ireland. “IAM has recorded a 3.47 per cent increase in tonnage handled in 2010, compared with the same tonnage handled in 2009,” McCool says, adding that the company had recorded a 15 per cent increase in tonnage between January and May this year, versus the same period a year ago. “A strong portfolio of carriers and the highest levels of customer service levels would be strong factors in the increased level of support we have gained from the market,” McCool says. “IAM has a highly experienced and trainer sales and customer service team. Through the downturn we have held our key staff to ensure we are well positioned for the upturn once more.” McCool says for the first thee months of this year, IAM has seen an increase of 11 per cent in air export from the total market compared with the same period a year earlier. About 55 per cent of total air exports move to the US from Ireland. “The Irish market has been in a downward trend for the last few years since 2008, falling from 47,566 tonnes of total air exports to 38,358 tonnes in 2010. We have seen many of the large multinational corporations close their manufacturing in Ireland over this period and move to Eastern Europe or Asia due to lower costs,” he says. On the positive side, there have been a lot of new foreign direct inward investments to Ireland over the last three years in the medical device, life science and pharmaceutical sectors, he says, adding that even one of two of the IT manufacturers have moved back to Ireland from lower cost countries. “The global recession and the financial crisis in Ireland have resulted in the manufacturing cost coming down, which mixed with the tax levels, free circulation within the EU and the highly educated work force, Ireland is now a very attractive based for Multinationals looking at a European base. “Intel has recently given Ireland its renewed seal of approval with the construction of a new production line in Ireland and an investment of approx US$500 million,” McCool says. “Even through air cargo market remains fragile, the signs for the short to medium term remain positive,” he concludes. McCool points out that IAM charters trucks on a nightly basis depending on demand, and this gave the company enormous flexibility on the number of schedules it operated each night and the type of special equipment it needed to handle such as aero engine carriers and temperature control trailers.