Embracing Change Delivering ground services in most cost-effective way by Carmen To Constant search to trim costs and upgrade efficiency on the tarmac Time is money, as the saying goes — and in no industry is time more precious than in aviation. Jon Conway, director and general manager, Hong Kong Airport Services Ltd (HAS), believes that the pressure to maintain schedules and the challenge of competitors is tougher here than in many other global aviation hubs. In response, he says, the dynamism of Hong Kong's business environment drives HAS to continually seek ways to improve the quality of its services and, at the same time, provide them in the most cost effective and efficient manner. The transfer of Hong Kong's International Airport from Kai Tak to Chek Lap Kok, and the introduction of round-the-clock operations at the new airport, brought significant changes and challenges. Many of the airline support activities at Kai Tak were on a sole provider basis. "Now there are multiple providers across all disciplines, bringing enormous changes to the business environment. Cathay Pacific and Dragonair, our shareholders, decided to create their own handling company — HAS and successfully obtained a 10-year franchise form the Airport Authority in 1998. This falls due in July next year." Today, 75 per cent of HAS' 2,000-strong workforce performs predominantly manual duties. "We are fairly labour-intensive," says Mr Conway. Their main responsibilities include the loading and unloading of baggage, cargo and mail from aircraft, the calculation of aircraft weight and balance so that there is no over-loading, and most important of all, facilitating the rapid turn-around of aircraft. "This is a tough job since our staff must work outdoors whatever the weather — heat and humidity in the hot months, rain and cold during winter. That's probably why most of our employees are male." He also points out that to increase the flexibility of its workforce, HAS now employs both full-time permanent and contract staff, with the better-performing contract staff being offered full-time status as and when vacancies arise. Problems that have affected the company's performance in recent years are directly linked to the airline industry itself. These include the 9/11 terrorist attacks and the SARS outbreak, both of which seriously reduced the number of visitors to Hong Kong. Another minus-factor affecting the company's operations is the wildly fluctuating price of the oil from which jet fuel is produced. "Airlines globally are struggling to make decent returns. Oil price volatility has hit many of the world's airlines very hard and one of their first targets for cost reduction is the poor ground-handling industry. Our constant battle is to work smarter and better for less," Mr Conway says. Optimistic outlook Nevertheless, Mr Conway remains optimistic about the aviation industry in general and Hong Kong in particular even though the airline sector is highly capital intensive. "Ground handling is a tough industry although Hong Kong Airport has the balance about right, with airlines having plenty of choice when selecting ramp and passenger handlers, flight kitchens and aircraft maintenance providers. This balance is important, as regional competition from airports such as Singapore, Bangkok and Kuala Lumpur increases," he says. "We are fortunate, within HAS, to call on the expertise of a very experienced and knowledgeable management team." More airfreight Turning to the economies achieved, HAS has focused on cost-management and productivity improvement measured by, among other things, the number of flights handled per staff member. In 2006 the company handled over 76,000 departing aircraft and this figure is expected to grow with the developing logistics industry in Hong Kong and consequent increase in airfreight throughput. HAS also recently formed a relationship with a ground support equipment manufacturer from the mainland (Weihai Guangtai Aiport Equipment Ltd). Clearly a 'non-core' activity, it is however proving to be a useful alternative revenue stream which adds value to the business. "There is no rocket science to management", Mr Conway points out, "When faced with obstacles, we analyse processes and find ways to improve. We have our joint management staff advisory team which facilitates communication within the company." He also notes that it is important to keep on top of the changes in the business environment, and react positively to them. "We have been successful in driving cost out of the business and this is due in no small part to the attitude of a positive workforce," he says. "In the year ahead we must review all our processes and work practices as we negotiate with the Airport Authority for the renewal of our franchise." Then and now Before (Kai Tak) Monopoly on ramp and other areas Not 24/7 operation (night curfew) Now (Chek Lap Kok) HAS created by Cathay and Dragonair specifically for Chek Lap Kok Awarded 10-year franchise for ramp-handling Also awarded 10-year exclusive bus franchise for passenger and staff transportation 24/7 operations Over 76,000 departing aircraft serviced by HAS last year Employs full-time and contract staff Investment of over HK$35 million in IT Taken from Career Times 2 February 2007 Your comments are welcome at [email protected]