As airlines, legacy carriers and newcomers alike, continue to look for cost savings in even some of their core businesses, such as cargo, chances are that they will ultimately end up in the caring arms of a General Sales Agent (GSA) or General Sales & Service Agent (GSSA).

According to Bertrand Schmoll, chief executive officer of Paris-based ECS, the trend to outsource entire cargo operations, also among carriers with existing cargo divisions, is accelerating. "We
see that larger well-established global airlines, who have never used a GSSA, are now thinking of changing their organisation and are looking for GSSA's to take over. It is an increasing trend
and not just a one-off incident," he says.
Changing cargo set-ups
Understandably, Schmoll declines to provide names, but he insists that in recent months ECS has been approached by a few international carriers who are looking for an effective way to save money
and outsource their cargo divisions.
"Some of the legacy carriers, not just in Europe, are facing tough market conditions with declining yields and increasing operational costs. Despite the current drop in fuel prices, they are
seriously evaluating if they should continue with their present cargo set-ups," Schmoll says.
All-inclusive package
As an example, Schmoll says that ECS recently took over the cargo operations of a certain airline, which only had two to three people looking after the cargo operations, who obviously couldn't
deliver an optimal cargo product. "So, besides cost-savings, the contract with us also meant that basically overnight they got the advantage of a global network and a hugely expanded staff with a
resulting optimisation of the product."
Schmoll, who heads one of the three major GSSA organisations worldwide, says that GSSA's are offering "more and more dedicated and innovative services to their airline customers, who cannot
provide the same level of services with their own organisation. With their increasingly limited budgets, carriers are constrained in opening and implementing a network."
Results-driven decisions
He adds that: "At the end of the day the biggest motive for the airline is to sell efficiency. They are not just looking at the biggest cost savings, or the best cost model, but they also look at
the best outcome of it."
A GSSA, like ECS, has an established global network, which can be put to work for an airline right away. That was not the case ten years ago, but, explains Schmoll "with ECS we now have a
well-established network in Europe with strong connections and partners in Asia, Latin America and Africa. We wouldn't have been able to offer a global network ten years ago, but we are confident
that we now have that network in place with staff that have a wealth of local knowledge."

Optimizing presence in China
China obviously is a very important market for ECS. "We have a mutual interest in that we want to be in China and they (the airlines - ed) want to be in the west (Europe), where we have
established our most extensive network. So, they want to connect with us," explains ECS' chief operating officer, Adrien Thominet.
The company already has offices in Shanghai and Beijing, "but," says Thominet, "if you want to be able to offer a good coverage of the Chinese market, you need to have a presence in more places
than just these two."
Eyeing Guangzhou
Asked which other main gateways In China are on the company's wish list, Schmoll declines to be specific and refers to "the usual suspects," but he hints that Guangzhou in the Pearl River Delta
could be among the potential locations.
While ECS has a well-established Asian network, through both wholly-owned offices and affiliates and agents, Schmoll states that, in order of importance, Europe and the U.S. are still the leading
continents, followed by Asia and Latin America.
Focus on India
In South Asia, notably in India, ECS at the end of 2011 opened its first offices in Mumbai and Bombay and has since added further locations in Chennai and Hyderabad. According to Schmoll, the
potential of the Indian market is significant. "We are very successful in India,” he says, "and we now have more than one 100 employees in that country."
Schmoll says the set-up in India is a good example of how ECS is creating its global network. "We want to have a solid organisation that can carry out all necessary GSSA activities in each
country and not just one guy in an office. That is what we have managed in India and that is basically what we want to establish in most places in the future.”
Developing Africa further
As for the ECS presence in Africa, Thominet says the company's European network provides good coverage of the African growth markets. "Africa has nicely developed with more and more carriers
looking at developing a cargo product through a GSSA. We will continue to develop the capacity and the solutions we offer to Africa for our entire network," he says.
As for the US market, both ECS executives are keenly aware of the rapidly improving market in that country, which they claim "will continue to grow". Likewise, despite the economic vagaries in
some of the EC countries, Schmoll points to the falling oil prices and is forecasting an improvement, particularly in the second half of the year, which would translate in higher earnings for the
ECS Group.
Nol van Fenema
Write a comment