Hong Kong’s GSAs face many challenges
While Hong Kong remains a good market for GSA/GSSAs, challenges from other markets including the southern China mainland could impinge upon this in the longer term. Wong Joon San reports.
September 18, 2014
One of the challenges of the airline GSA/GSSAs is to generate sufficient profit to recruit quality airline and logistics professionals to manage the airline business, says Anthony Lau, chairman of Pacific Air which is GSA/GSSA to six airlines in Hong Kong.
Fuel costs have tripled over the period 2004 to 2011 says Lau and most airlines face a serious competitive threat from the Middle Eastern carriers. “This means they have to find ways to trim their operating costs,” he said. “One of the ways is to outsource their sales, or sales and services functions to third party operators such as airline GSA/GSSA operators.”
Under normal circumstances, airline GSA/GSSAs offer services to a number of airlines and are able to spread the costs among their operating units. During the transitional period when an airline decides to use a GSA/GSSA, some of the airlines’ country managers often resist the change, he says. Many managers may not even see the wisdom of their top management to outsource the sales or sales and services and they prefer to stick to their old model of management, without any change. As a result, managing this transition is another challenge faced by the airline GSA/GSSA operators, Lau said.