Mergers, acquisitions and buyouts have become the way of the world in the past two decades, each with a story behind it, some with a positive spin, others with quite the opposite. When the BBA Aviation Group added Aircraft Service International Group (ASIG) to its portfolio, a commercial aviation services company with more than 55 years experience, the outcome was and continues to be a positive story with a positive spin.
“When BBA made the decision in 2001 to acquire us, the thought process was to [become] a complete service provider of all product lines. ASIG had been a very, very large fueling company providing the into-plane service as well as the management and operation of fuel farm facilities,” says Keith Ryan, president of ASIG. “The commercial work that came out of Signature Flight Support [FBO and sister company] into the ASIG brand was a little bit more of the traditional above and below wing ground handling service.” BBA and ASIG both agreed that the acquisition created an opportunity for ASIG to “organically grow” those product lines through the existing stations and “store fronts” already providing the fueling services.
Out of 68 stations worldwide, ASIG provides fueling in 65. According to Ryan, fueling, though still the largest “leg”, is only one of “four legs of the stool” on which they sit. The other three are the traditional ground handling services, encompassing anything from above wing to under wing services; GSE maintenance which, doesn’t get “a lot of fanfare but is actually fairly substantial;” and finally, cargo loading and warehousing. “That gives us pretty much the full bailiwick of everything we can do on the commercial services side, other than obviously engine work or airframe maintenance work which ASIG is not interested in doing,” says Ryan.
A TIRED MARKET
In February 2004, Virgin Atlantic Airways awarded ASIG the contract to provide their flights with ground handling, cabin and deicing services. Entry into the John F. Kennedy International Airport (JFK) market at Terminal 4 was a strategic step towards carefully growing the ASIG operations and towards their goal of becoming a total service provider at all gateways in North America.
As can often happen, when the same folks have been competing in the same market for a long time, complacency sets in. “JFK was a tired market,” says Ryan. “The marketplace had been calling for new blood for several years and JFK as a whole needed some new service providers.” Committed to reinvesting in equipment and providing capital to grow the business effectively, ASIG has had some “good wins.”
In 2005, they launched passenger service operations for both VARIG and EOS Airlines, adding an additional 21 weekly flights serviced at the airport. “We are fortunate to have an owner (BBA) who’s been committed to the industry and is confident in us,” explains Ryan. “The service level we are providing to the international carriers at Terminal 4 gives us a good baseline and reputation for providing services elsewhere at JFK. Our marketplace is getting bigger. We were recently awarded the Continental Airlines contract at all of JFK to providing our complete line of services for them.”
OVERSEIZE OPPORTUNITIES
Ryan views organic growth as opportunities that present themselves in the “local market”, but the saying “think globally, act locally” has basically been reversed for ASIG, which has begun to seize those opportunities overseas, particularly in Asia.
In September 2006, they announced the commencement of fueling operations at Bangkok’s new Suvarnabhumi Airport, a project that was three years in the making. “We were fortunate to win one of the licenses at the new airport in Bangkok…that’s our first operation under the ASIG brand in Asia,” says Ryan. “The Star Alliance carriers have been extremely supportive…the next step is to [determine] if there is some infrastructure development we can do at the airport to help level the playing field.” Ryan notes there are other markets in Thailand and BBA views it as an opportunity for several of their brands, including ASIG, Signature and Dallas Airmotive to support their existing customers as they move further into the Asian market. Currently, ASIG is fueling six airlines in Bangkok.
As for moving into the ground handling arena in Asia, “I’m not sure where that one stands,” says Ryan. “Our bread and butter is being able to offer multiple products to the same storefront. If there’s anything that ties in with the ground, technical or cargo in that market that we can [offer], we’ll look at that too.” Bottom line: ASIG looks forward to providing the customers serving the Asian market and beyond, an option.
KEEPING IT YOUNG AND SMART
In most of their stations in North America, ASIG owns all of the fueling and ground handling equipment and works with manufacturers such as Rampmaster, Tug, etc. In the UK, a significant percentage of the equipment is owned by the petroleum company. “We have the youngest fleet in the system,” claims Ryan. “We have more assets in moving equipment than United Airlines does, and in the past five years we have reinvested in the equipment and in our people.”
With innovative IT systems providing “real time” data to carriers on every level, IT analysis support for ground support maintenance, operational equipment costs and tracking ground handling labor initiatives; ASIG believes they are able to stay in front of their competitors.
With our ability to manage labor the way we do…have a young fleet and a [comprehensive] ground support equipment maintenance program, our SRT software system…supports our desires to grow third party GSE maintenance and track the cost to operate the pieces for the airlines,” says Ryan. “This is exactly why we are growing our business. We can see it, we can touch it, we can analyze it and we can show [our customers] when equipment becomes too expensive to operate. Carriers simply want to make sure you have a safe, efficient operation that’s competitively priced.”
The needs of their customers have changed significantly over the years, according to Ryan. On every level they have become involved in a fight for survival and companies like ASIG have not only had to react to those needs, but have had to operate within a much shorter timeline with more of a sense of urgency. As carriers pull out of one market and go into another, a ground handling company has to be ready and responsive to move into the new market within 30 days to support that customer. And with this fight for survival, comes pricing pressures placed on the ground handling vendors. “[BBA] is a committed parent,” says Ryan. “It helps differentiate us from some of our competitors who are not too sure they have committed parents. We have, we do, and we are in it for the long haul.”
