Small GSSAs face dilemma in dealing with airlines
Today, some smaller general sales and service agents (GSSAs) are facing a paradox as a number of airlines want to work with them, because they see the larger ones as unable to offer dedicated services, but they expect the service levels to be on par or comparable with those of large GSSAs. Wong Joon San has the story.
July 1, 2011
Paris-based ECS Group senior VP sales and marketing, Adrien Thominet says another trend that has arisen in today’s competitive environment is that some GSSAs have made some ridiculous and unrealistic offers to airlines, spoiling the market. “Compared with 10 to 15 years ago, the GSSA’s services have changed greatly, with today’s business offering much more services with greater transparency, long term partnership with more commitment and which are more financially stable,” he says. The ECS Group, which comprises a total of 54 companies in 32 countries, said that its General Sales Agents (GSAs) recorded a 35 per cent tonnage growth in the first quarter of this year versus the same period a year ago. “This year we expect a 15 per cent (growth) compared to 2010 based on very good first and second quarter results and slower results in the third and fourth quarter of this year,” Thominet says. “The ECS Group’s larger sales representation thanks to its network, number of sales staff and existing connection with key accounts gives it an edge over its competitors,” he says, adding that the present trend was for GSAs to offer dedicated set units to airlines as well as to offer them guaranteed revenue levels. Despite this some airlines prefer to be self-represented as they believe it is important for the customer to have a dedicated window, he says. The ECS Group is promoting itself as a one-stop shop for sales and representation for airlines, warehouse handling and group supervision, as well as charter provisions for both scheduled and ad hoc operations. The group offers total cargo management through combined GSSA solutions and strong local expertise in various areas of operations. Current trends Regarding present trends among airlines, Thominet says carriers are adding new destinations, and they also changed and modernised their fleet which usually led to more capacities. On the question of the emergence of more new airlines impacting the air cargo market, he says it depended on the sectors; for example, Europe to Florida (US), leg shows overcapacity, versus Europe to South America which shows under capacity. “More airlines are emerging and this particularly affects the pure cargo operations, which also suffer from fuel cost increase,” he says. Focusing on the rising fuel price challenge, he says so far customers were accepting the fuel price increase which seemed to be more or less stabilizing at present. As a GSA, Thominet says he would like to see the African and South American markets improve further for more GSA activities. ECS Group’s representation Thominet says the ECS Group now has representation in India, Hong Kong, Singapore and China, which were contributing to about 25 per cent of the group’s overall income. He expected this cluster to grow rapidly in the near future. Of the Asian business, the group’s structure in China is brand new – established only a month ago – and therefore was not generating signficant business for the time being, he says. However, the group which is strong in Europe says that the GSSA trend there was “good” and that it could offer a larger set of services thanks to its size.