Ground Handling Social Dialogue Support The limitation of ramp handling licenses at Rome Fiumicino Airport Final conference Copenhagen 27-2 April 2017
2 A quick look at history at Rome Fiumicino 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- 1 1 1 1 1 handling Merger between two handlers 2000 2011 2013 2015 6 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 00 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 2011-2013 Time to build new scenarios In the period ADR and ENAC carried out an in-depth technical analysis of FCO handling operations. Dynamic simulation models of ramp operations and airside vehicle traffic was used. This allowed a thorough assessment of all the variables related to safety and service performance. The main objectives were the following: 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 2011-2013 Time to build new scenarios 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 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. A limitation was proposed in accordance to the article 6 of the EU Directive 96/97 (article 4 of the Legislative Decree 1/99 implementing the directive in the national legislation).
5 2011-2013 Time to build new scenarios 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 number 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 2014 The limitation measure is adopted by ENAC (CAA) On February 1, 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 1/99) 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 1/99) Ramp handling (Cat.5 All.to A, Legislative Decree no. 1/99 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 2015 The public tender to award the licenses In April 2015 the 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: 15 70 395 440 0 Experience Business plan Service Quality Procedures Resources In line 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
2015-2016 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 1 th, 2016. With the active cooperation of the Unions, about 235 workers changed employer.
Almost a year later: general improvement of quality 45 41,07 Time to redeliver the last bag Domestic and Schengen Flights (waiting time in mm, ss in 90% of cases) 41,32 Previous year 40 Current year Last bag DOMESTIC 35 30 25 20 15-15 min 26,09-12 min 29,49 34,37-7 min 27,27 32,22 - min 21,55 26,20-7 min 19,40 25,46-3 min 22,51 24,04-3 min 20,35 23,02-3 min 20,01 22,14 21,56 jul aug sep oct nov dec jan feb mar 60 56,42 Last bag SCHENGEN 55 50 45 40 35 30 25-23 min 33,52 49,32-16 min 33,53 44,12-11 min 33,07 43,09 - min 33, 36,14-9 min 27,34 32,41-5 min 2,02 29,27-2 min 27,42 29,46-2 min 27,54 31,35 31,29 20 jul aug sep oct nov dec jan feb mar Data updated at 31/03/2017 9
Almost a year later: general improvement of quality Last bag NON SCHENGEN NB 55 50 45 40 35 30 25 52,05-15 min 37,1 Time to redeliver the last bag Domestic and Schengen Flights (waiting time in mm, ss in 90% of cases) 49,20-12 min 37,21 45,20-9 min 36,39 45,57-11 min 34,47 35,45-7 min 29,05-1 min 31,15 30,39-3 min 32,36 29,19-4 min 32,01 2,07 Previous year Current year 33,55-2 min 31,2 20 15 jul aug sep oct nov dec jan feb mar Last bag NON SCHENGEN WB 60 55 50 45 40 35 30 56,09-14 min 42,24 54,09 52,3-4 min -14 min 4,1 40,16 52,05-6 min 45,39-2 min 44,36 42,56 +2 min 45,00 43,00 49,03 +5 min 43,40 49,32 +7 min 42,40 50,05 45,46 +4 min Instability of one handling company related to group issues 25 20 jul aug sep oct nov dec jan feb mar Data updated at 31/03/2017
Almost a year later: general improvement of quality Handler 1 Ok Not compliant 2 5 4 7 9 7 9 9 5 6 3 2 1 3 1 1 jul aug sep oct nov dec jan feb mar Targets not reached in Mar17 Disembarkation time 3 3 2 Handler 2 5 5 6 6 7 7 7 7 6 Last bag nonschengen NB 2 2 1 1 1 1 Disembarkation time jul aug sep oct nov dec jan feb mar Handler 3 3 7 2 2 4 6 7 7 7 3 3 3 2 7 3 Last bag Schengen Last bag non Schengen WB Disembarkation time Data updated at 31/03/2017 jul aug sep oct nov dec jan feb mar 11
12 Quality improved in areas not subject to limitation Perceived quality at the check-in All terminals % Customer s satisfaction Check-in waiting times (90% of cases) down y-to-y both for domestic and international traffic and well below the quality targets set in the airport service charter (2017 performance: domestic 4m21s, international m45s).
13 Customers perception at Fiumicino at the highest level ever ACI quarterly Airport Quality Survey FCO 4,40 4,34 4,20 4,07 4,00 3,0 3,74 3,60 3,40 3,40 3,49 3,42 3,40 3,43 3,73 3,20 3,31 2017 1QTR 2016 2015 2014 2013 2012 2011 20 2009 200 Source: ACI Airports Council International: Airport Service Quality - Survey Report. Service marks from 1 «poor» to 5 «excellent»
THANK YOU! 14