Ground handling worldwide has been labour, fuel and ground service equipment (GSE) intensive both financially & operationally. Cost fluctuates wildly with the economy primarily around fuel pricing.
With Volvo announcing 2019 as the year they eliminate new fuel dependent vehicles, replacing them with electric and hybrid engines, the timeline for conversion to electric equipment (e-equipment)has moved forward quite substantially. The good news is the annual cost of fuel consumption will be vastly reduced or eliminated within the next 20 years, amounting to very significant increased operating profitability, initially, to be partially replaced by cost reduction as the end user airlines will want to share in the bounty. The high price and volatility of fuel will not be missed by the industry even by those very good at hedging these costs.
The new infrastructure needed to accommodate entire fleets of e-equipment will be both expensive and present space challenge obstacles for Airports worldwide. Operating procedures will need to be reviewed and modified. Capital cost will increase as the purchase price has traditionally been higher for electric vehicles, the cost of the transition from fuel to electric will need to be managed strategically to maximize increased revenue and reduce waste through efficient, effective management of the chaos that always creeps into such environments. The operating cost with no or reduced fuel charges as well as reduced maintenance cost to maintain electric vs fuel burning engines will at worst case scenario be revenue neutral over the life of the vehicle. Far more likely is an excellent savings over the vehicle life even when the cost of the airport infrastructure accommodations is factored in. The environmental benefits, both financial and health wise are self-evident.
Finally, we come to Labour. The cost of maintaining workforces will continue to increase as Governments will more and more accede to the pressure to mandate living wages. This is the morally the right thing to do. The challenge is making it work for everyone to keep the Industry economically viable and competitive. This will require building a great productive culture and strategic planning if you wish your Company to survive. Again, technological advances will help solve part of this problem with driver-less and/or remote-controlled GSE. Although not as advanced AI Robots are not far off. As with the transition to electric equipment capital will be essential to implement this new technology safely and efficiently. Revenue Science through Chief Revenue Officer (CRO) thinking will be essential to sort through the chaos to maximize return and reduce waste.
The most challenging aspect of all this is how do we cushion the negative impact on those workers in the fuel industry and those replaced by automation throughout this process. The Industry (and Society as a whole) needs to begin today to work out a plan to ensure a viable transition plan for these fellow colleagues if we wish to avoid serious repercussions of reducing the human requirement in the future, not too distant world.
If you wish to learn more about this future please contact us.
AVCON.WW Inc. is a consulting & training solution Company specializing in best practice, SMS & environmental change transition management solutions through quality auditing, training and corporate cultural integration throughout all levels and departments, in the Transportation Industry in the Aviation, Trucking, Transit, Rail and Shipping sectors.