When Covid hit, many countries went into lockdown and shut their borders. Now that borders have been reopened, people are eager to travel again to see family and go on holiday but handling the pent-up demand is a challenge.
In Australia, Oceania Aviation is present at several airports of different sizes, primarily on the east coast, offering ground handling, check-in, ramp handling, cleaning services and GSE support.
Commercial Director Wayne Needs described the travel restrictions as “devastating”, not only hitting the airlines and airports but other related industries, such as hospitality and tourism.
Inconsistent restrictions between states, which could quickly be locked down again meant staff were being stood up and stood down multiple times a year.
For Oceania Aviation, standing up and re-training staff only to stand them down again was costly and disruptive.
Needs commented: “Many staff had determined that this was not the industry for them and left seeking more stable employment to allow them to meet their living expenses.”
2021 was difficult with flight volumes as low as 10% of pre-pandemic levels. Oceania Aviation was operating at a loss due to not being able to switch off fixed costs and having to maintain ports to serve a minimal number of flights.
“Having said that, Oceania Aviation was successful in a number of new contract wins through this period which will position us well for future years. We came out of the 2021 year 150% larger than pre-Covid, (once full flight volumes return),” he said.
In 2021, the challenge was surviving with fewer flights but for 2022, the challenge is catering for much higher demand but with fewer staff than before the pandemic.
Needs said: “All ground handlers and airports are currently understaffed. Recruitment of people into this industry is much more difficult than it has ever been due to many staff getting stood down regularly and regarding the reliability of employment in aviation as not meeting their requirements. Many of us have been recruiting for six months and still can’t get the numbers of staff we require.”
Airlines ramping up services to beyond pre-pandemic levels while staff levels are too low is frustrating. “It’s quite ridiculous that airlines would seek to do this in the current environment, one would think a more staged approach would be safer and less risky for everyone involved,” he continued.
With new contracts, Oceania Aviation has effectively doubled in size. “It is a real challenge for us in the current environment to have safely and effectively started up three new ports and five new accounts. We are very proud of our team for putting the hard work and dedication in to build us stronger for the future,” said Needs.
No matter what, safety and compliance remain the top priorities. Ignore the “schedule monster”, advises Needs, and when there are disruptions staff are taught to slow down rather than speed up.
He said: “We tell them that there is never any need to see people rushing on the ramp. We know that we are all human and when we are rushed and panicked that is when things go wrong. So slow and steady is our messaging to staff.”
Like many companies, Oceania Aviation used the pandemic as a time to test out new innovations and see how operations could be made more efficient. Highly effective turn models were developed for ramp operations and safety and compliance were enhanced.
Needs said: “Our models offer a military like precision that shows an almost choreographed ramp operation that is predictable, visible and highly effective.”
Oceania Aviation has also invested in software to provide automated systems and data capture to manage ground handling business in a more effective and automated way.
Customers have also been given access to real-time operational data, giving them transparent access to Oceania Aviation’s operating performance.
Coming out of the Covid era, Oceania Aviation is a company twice the size it was based on revenue and profitability. Its airport footprint has grown, it has gained new customers and expanded customer accounts. “We are exceptionally proud of our team, we are fortunate to have such great staff and leaders in our business that have navigated us through one of the most difficult times in aviation history. We look forward to the future and are excited about continuing our growth and development long into the future,” he concluded.
Slow recovery
Like all players in the sector, Swissport was severely affected by the pandemic, said Managing Director APAC, Brad Moore. Cargo remained strong but passenger demand was down up to 90% at various stages.
Across Asia Pacific, recovery for international travel has been slow due to border restrictions and quarantine requirements, and the closure of China’s borders.
Most of Swissport’s business in Australia is domestic, which remained strong and now that the borders have reopened, international travel is starting to recover.
Moore said: “Both the Australian and New Zealand governments provided wage subsidies which helped keep our workforce connected, particularly early in the pandemic. We were fortunate to not have to let go of our workforce, however, short-term stand-downs and the ongoing volatility of the sector has affected retention.”
Prior to the Delta wave, domestic travel was at pre-pandemic levels, showing the appetite to travel was there and that dramatic bounce-backs are to be expected in Australia and New Zealand.
He explained: “The volatility of the past two years and the threat of emerging variants has made planning and resourcing an ongoing challenge, but every effort has been on building and maintaining a highly skilled workforce to support our airline customers’ schedules.”
There are high hopes for major markets such as Japan and South Korea, but they still have strict travel restrictions. It remains dependent on national governments and at the time of writing, entry to Japan is off limits to most non-residential foreign nationals. South Korea is less restrictive but still challenging.
“Passenger restrictions have eased in Korea compared to earlier in the pandemic, but, incoming visitors still need to navigate Covid testing and quarantine requirements. The recovery of international passenger flying has been slow but fortunately Swissport’s cargo business has reached record levels and is expected to remain strong,” said Moore.
Despite the ongoing challenges, he is confident about the region’s outlook and Swissport is busy supporting customers. It has built new partnerships with Singapore Airlines, American Airlines, Hawaiian Airlines, Finnair, Turkish Airlines, Fiji Airlines, and several Korean airlines.
Cargo is a source of excitement with the much-anticipated launch of cargo operations in Australia. Inside the airport, Aspire lounges will be added to airports in Australia and the first Aspire lounge is due to open at Tokyo’s Narita airport in August.
Moore said: “I deeply appreciate the commitment and can-do attitude of the Swissport team particularly throughout the past two years of Covid-related challenges and market volatility. The next phase should see a sustained return to stable work with many exciting and long-term opportunities for our team members.”
Mixed results
For Menzies Aviation, the region gave mixed results with the cargo sector performing strongly while passenger services were restricted, said Executive Vice President Oceania and South East Asia, Alistair Reid.
Cargo volumes remained strong with consistent volumes from freight forwarders and cargo terminal operators increasing in some cases but flight volumes were reduced dramatically due to travel restrictions.
“The ensuing drop in air travel had a significant impact to both the airline community and subsequent ground services providers,” said Reid.
In Australia and New Zealand, domestic travel demand is strong, exceeding pre-pandemic levels in Australia over Easter.
China’s zero-Covid policy is affecting South East Asia; Shanghai is in lockdown, Cathay Pacific is operating at about 2% of pre-Covid levels out of Hong Kong, and Macau is operating at about 5% of pre-Covid levels.
He said: “China’s policy will continue to have a significant impact in the South East Asia region for some time and we are unlikely to see recovery at the same levels as other regions until mid to late 2023.”
The pandemic has made the job market very challenging with Reid highlighting the situation in Western Australia, which had the longest lockdown and was the last state to relax restrictions. The natural resources industry has also been recruiting heavily and labour has been moving out of the state.
Reid commented: “The recent uncertainty in the aviation sector has made people question the stability of a career in aviation and across every part of the supply chain. The move towards flexible working and a growing preference to work at home has also caused a constriction of labour being attracted to the industry.”
Making aviation attractive is a challenge and Menzies Aviation is offering perks such as refer a friend rewards, join up incentives, and flexibility for rostering and workplaces. Policies of long service bene fits and recognition have been retained.
Menzies Aviation is strengthening its position in the region with a new office in Singapore and the appointment of James Wong for the newly created role of Senior Vice President South East Asia and China. Wong will primarily focus on expanding operations in the five countries where Menzies Aviation is already present whilst focusing on securing new business.
The outlook is positive, said Reid, with pent-up travel demand as countries reopen for visitors and business. With ongoing shipping issues, cargo and logistics remain key and will mean strong demand for air cargo for the immediate future.
He added: “Australia and New Zealand are likely to recover quite strongly, however, China’s Covid-19 policies continue to have a major impact on the region and will hamper recovery until a different approach is adopted.”
Staff retention
It was dnata’s mission to retain as many staff as possible during the pandemic by redeploying them within the organisation. For example, passenger services staff moved into cargo when passenger flights completely stopped in the early days.
The handler also partnered with local authorities and external companies to temporarily redeploy employees to other sectors facing a labour shortage.
“This helped us retain as many staff as possible and maintain their valuable skillsets whilst supporting the communities around us,” said Regional CEO Asia Pacific, Charles Galloway.
“We are working extremely hard to recruit, train and welcome new colleagues into our organisation, whilst protecting our safety and service values.”
Helping individuals to progress within the organisation is inherent within dnata’s thinking towards developing staff.
Galloway continued: “We are proud to champion aviation as a career, a significant proportion of our supervisory and management teams are long-term aviation professionals. We are committed to the development, training and promotion of our colleagues into these roles. As the aviation sector recovery expands across the Asia-Pacific region we will also look to encourage and support employee mobility and development opportunities throughout our global network.”
In the Far East and Australasia, as in other regions, dnata had to adapt operations frequently and efficiently to the rapidly changing customer needs throughout the pandemic. There was a significant shift from passenger operations to cargo and freighter activity, which impacted schedules, ground time and overall operations.
Since the restrictions were eased in April in Singapore, dnata has seen strong recovery and expects demand to further increase. It is seeing a positive recovery in air travel in the Philippines.
“We see a direct correlation between the lifting of entry and quarantine restrictions for travellers to the Philippines and the return of flights and passengers. We’ve seen our customer airlines expand operations significantly in the first quarter of 2022. We have also seen an upsurge of ad-hoc freighter services across the APAC region over the past year,” he pointed out.
Lasting thoughts
dnata says it has already proven that it is possible to thrive in a challenging economic environment. “By reacting quickly to the crisis and careful cost management we have retained a strong balance sheet, also continuing to drive our optimisation and innovation programmes that enable us to be the stand-out quality solutions provider. We have delivered IT transformation programs in Singapore and Australia, partnered with local Singaporean tech companies to enable the digitalisation of the cargo product, expanded our cargo operations in Sydney, opened a lounge in Manila and launched operations at Townsville airport in Australia. We will continue to seek new business opportunities while ensuring that our growth continues to be both financially sustainable and in line with our environmental commitments,” he said.
“Asia Pacific is an extremely resilient region with tremendous business potential. Our colleagues and customers have worked tirelessly throughout these challenges to ensure we build back better and leaner as we reconnect the world.”
