The limitation of ramp handling licenses at Rome Fiumicino Airport 1 Workshop Legal Survey Barcelona Dec. 8, 2016
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1 Ground Handling Social Dialogue Support The limitation of ramp handling licenses at Rome Fiumicino Airport 1 Workshop Legal Survey Barcelona Dec. 8, 2016
2 2 A quick look at history After year 2000 the ground handling market scenario at FCO airport has seen an increase of «full handling» operators due to «market opening» as a result of the implementation of Council Directive 96/67/EC (implemented in Itally with a 1999 decree). Third parties handling This has led to both Operational and Market issues. 7 Self handling Merger between two handlers Bankruptcy of one company 5 Operational Issues Ramp congestion due to about 7000 units among GSE and other vehicles operating on the Apron Shortage of areas in the ramp (about 1000 sqm missing in ramp logistics). Pressure at lowering costs Market Issues High competitive pressure Social tensions Reduced quality levels Difficulties in business sustainability Bankruptcies Continuous damages to the public perception of Rome Fiumicino
3 Timeframe for in depth analysis 1/3 Starting in 2011, ADR and ENAC carried out a technical analysis of FCO handling operations. To highlight the critical aspects of the ramp operations, a dynamic simulation model of vehicle traffic was used. This allowed a thorough assessment of the parameters and variables related to the service's performance and the safety of operations. Multiple analyses have been carried out with the following objectives: check the saturation of the operational areas (both for vehicles and facilities) assigned to the handlers; highlight the operational bottlenecks arising from the handling activities and, in particular, by the flow of aircraft and vehicles on the apron area; identify and analyze the safety risks in circulation of vehicles and aircraft in the air side; assess the current level of safety; analyze the impact on the handling operations of the airport development works.
4 Timeframe for in depth analisys 2/3 Key Findings Market fragmentation between several handlers (six in 2013) Some handlers with very low market share Total amount of ramp equipment not optimized High average age of vehicle fleets Proof of the saturation of Apron, in respect of the relationship between demand and availability of parking areas for handlers GSE Shortage of space availability On the basis of the methodology used, the risks associated with handlers activities on the airport were "tolerable" (applying the internationally recognized matrix of the ICAO risk). It was therefore found that the control and mitigation measures had to be applied in the short term, to sensibly reduce the level of risk down to "acceptable". Among the mitigation measures identified, the limitation of the ground handling operators in the ramp would have allowed to improve operational safety and quality of service for airport users.
5 Timeframe for in depth analisys 3/3 Simulations were performed in order to evaluate the need of each type of GSE (trucks, cars, tractors, buses, stairs, pushbacks, GPU units) in the peak hour. Reduction directly related to the n of GH operators. As confirmation of the necessity of the limitation, a benchmark was performed to assess the liberalization level in other European airports. The following table highlights the relationship between the levels of traffic and the number of full handlers (2013 data).
6 The measure adopted by ENAC (CAA) On February 18, 2014 ADR submitted to ENAC a request for the limitation of the ground handling licenses for ramp activities. In response to the request and by approving the related studies, the General Director of Italian Civil Aviation Authority s decision of 13 rd October 2014 imposed the following limitations: Services subject to limitations: Baggage Handling (cat.3, Annex A, Legislative Decree n 18/99) Cargo and Mail Handling (physical handling of freight and mail, incoming, departing and in transit between the air terminal and the aircraft - Cat.4, Annex A, Legislative Decree n 18/99) Ramp handling (Cat.5 All.to A, Legislative Decree no. 18/99 with the exception of point 5.7 transport, loading on the plane of food and beverages, and its unloading) Service providers to third parties admitted to the market: no. 3 Self-handling carriers admitted to the market: no. 2 Duration of restrictions: 7 years
7 The public tender to award the licenses April 2015 Civil Aviation Authority published the tender for the selection of 3 providers of handling services to third parties Tender opened to all national and EU operators able to meet the specific minimum requirements Candidates eligibility requirements Economic & Financial capability : Bank references Statement of accounts Turnover (global and on specific limited services) Technical capability : Experience Business plan Service Quality Procedures Resources Cope with ENAC s certification requirements Experience (at least last 3 years) on GH operations in an airport with traffic of at least 25 Mil. WLU Awarding criteria Focus on quality and resources availability Higher score + 60 BONUS POINTS if the competitor committed to adopt the social protection clause SLAs to be signed with ADR
8 Award and implementation of the limitation Tender and results Five companies submitted offers: Alitalia Aviapartner, Aviation Services Consulta (with temporary joint venture with Marconi Handling) WFS Ground Italy. On December 23 rd 2015 ENAC awarded the licenses to operate to the following companies: Alitalia Aviation Services Aviapartner On 4 th March 2016 the licenses were declared effective and in the following period the new service contracts with SLAs have been undersigned by ADR and the handling licenses. Limitations have been fully implemented from May 18 th, With the active cooperation of the Unions, about 235 workers changed employer.
9 9 After six months: general improvement of quality Time of delivery for the last luggage Domestic Flights (waiting time in mm, ss in 90% of cases) mm,ss Time of delivery for the last luggage International Flights (waiting time in mm, ss in 90% of cases) mm,ss 45 41, % , ,32-29% 29,49 34,37-21% 27,27 32,22-33% 21, ,20-26% 19, , % , ,12-26% 37,04 45,57 45,28-18% -18% 37,45 37, ,53-16% 31, Jul Aug Sept Oct Nov 0 Jul Aug Sept Oct Nov Following the limitation of 18 May 2016, considerable reduction of the time of delivery for the last bag both for domestic flights (up to -36%) and for international ones (up to -35%)
10 10 After six months: general improvement of quality Waiting time on board for the first passenger disembarkation All Flights (waiting time in mm, ss in 90% of cases) mm,ss 5,5 5,31 5,33 5,0-23% -25% 4,5 4,0 4,14 4,10 3,5 3, % 4,41 4,04 4,18-2% 4,12 4,18-9% 3,56 2,5 2,0 1,5 1,0 0,5 0,0 Jul Aug Sept Oct Nov Following the limitation of 18 May 2016, considerable reduction of waiting time on board for the first passenger disembarkation, especially during the peak of the summer season (up to -25%)
11 11 Quality improves in unrestricted areas too Waiting time at the check-in Domestic Flights (waiting time in mm, ss in 90% of cases) mm,ss Waiting time at the check-in International Flights (waiting time in mm, ss in 90% of cases) mm,ss ,16-8% 13,07 15,03-18% 12,16 11,50-14% 13,29-23% , % ,48 8,00-30% 5,54 4,23 5,37 +13% 3,53 period negatively impacted by other events (Alitalia IT systems) 5,06 +31% 3,54 +14% 4,29 3, ,13 10,25-16% 9, Jul Aug Sept Oct Nov 0 Jul Aug Sept Oct Nov Following the limitation of 18 May 2016, considerable reduction of waiting time at the check-in for international flights (up to -23%); waiting time inferior to 6 minutes for domestic flights
12 THANK YOU! 12
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