Around the world, the expansion of airline fleets with larger and more technologically advanced aircraft requires ground handling equipment compatible with these newer models. This drives demand for more specialized equipment, such as loaders and high-capacity tractors. In addition, many countries are promoting the adoption of environmentally friendly ground handling equipment, enforcing strict emission standards and offering incentives for green equipment. This movement is natural, but in Brazil it encounters a barrier called predictability.
“The issue of predictability is crucial for both airlines and Ground Service Providers (ESATAs). Predictability, in this sense, refers to the ability of both parties to rely on each other’s commitment to fulfill their obligations consistently and on time, thereby reducing the risk of disruptions that could affect operations,” explains Joseph Suidan, an expert in airport ground operations and former Director of Ground Operations at IATA (International Air Transport Association) from 2008 to 2021.
Late last year, Abesata publicly announced the start of a bidding process for an active contract that included a clause allowing termination at any time, even without just cause – raising important questions about the nature of the agreement and its potential implications for the parties involved.
In the view of expert Joseph Suidan, trust and operational efficiency between airlines and ESATAs are essential, as both are highly interdependent. Furthermore, delays or service disruptions can result in significant costs and operational chaos. “The predictability of the actions, expectations and obligations of the parties is therefore essential to ensure the smooth functioning of airports, as errors or delays can cause cascading effects that can eventually affect the entire airport network.”
Suidan goes even further and states that the importance of predictability in the context of motivated contract breaches does not only refer to compliance with legal obligations: “It is also about maintaining the operational integrity and stability of the relationship between the airline and the ground handling service, which benefits both parties and the traveling public”.
In the view of the president of Abesata, Suidan's analysis is accurate, because in Brazil the contractual insecurity that ESATAs face, with contracts that can be terminated before the deadline and without any technical motivation, not only inhibits investments in better and more modern equipment, but also puts operational security at constant risk.
Suggestions to resolve the issue
Among Suidan's suggestions for resolving the issue is observing the 60-day notice period, as per clause 11.5 of the AHM (Airport Handling Manual) and the SGHA (Standard Ground Handling Agreement) 810. In this case, a rule is also provided for the partial termination of services: “An adjustment in tariffs should be considered, which should be negotiated contractually and should include provisions for cost recovery, including investments, commitments with human resources and expenses related to cases of force majeure”.
At another point, Joseph Suidan clarifies: “Standardization between ESATAs and airlines, widely published and illustrated in the IGOM and especially with regard to the model contract contained in the IATA AHM Manual, plays a significant role in ensuring efficiency, safety and consistency in ground handling operations at airports worldwide.”
Documented Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) linked to contract continuation, renewal or termination – with performance levels – are a valuable suggestion and should also be negotiated.
As a final suggestion, Suidan adds that mandatory mediation or arbitration should be implemented as a prerequisite to any termination, ensuring that all interested parties are heard and allowing room for resolution before any unilateral action is taken. Provision for arbitration is contained in the IATA standard model of the SGHA.
Furthermore, in Suidan’s opinion, Abesata’s initiative to implement CRES – ESATA’s Certificate of Regularity – plays a vital role in this relationship due to its fundamental principle that confirm their compliance with quality, legal certainty, environmental, social and governance (ESG) and market requirements, and can be ed by the ISAGO Audit Program – IATA’s Safety Audit for Ground Operations. “My final recommendation is to keep the focus on the three Cs (Communicate, Collaborate and Commit) for clear communication and shared objectives,” he concludes.
More information www.abesata.org.br
Joseph Suidan, airport ground operations specialist and former Director of Ground Operations at IATA (International Air Transport Association) from 2008 to 2021.
