WE BRING YOU SAFELY TO TAKE-OFF. - TCR Group

FEATURE | EQUIPMENT LEASING
Bucking
the trend
Operational leasing of ground support equipment (GSE) aims at reducing the
high financial risk associated with GSE purchase. However, geographical and
operational differences still play a critical role in determining the decision to buy
or rent, reports Keith Mwanalushi
JBT has a GSE pooling programme based on a cost per turn
credit: JBT Aerotech
A
frequent, and fairly straightforward question often posed by
users of GSEs is ‘why own, when you only want to use?’ Owning
GSE ties up capital and, if the wrong purchasing or maintenance
decisions are made, there is an inevitable negative
impact on the bottom line. However, airport operators and ground handlers
will usually frequently turn to a variety of options, from short-term
rentals to longer term operating leases of GSE.
“The last few years have seen an acceleration of the equipment rental
business concept,” outlines Marc Delvaux, CEO at TCR Group, which provides
turnkey solutions for aviation GSE.
“On the one hand, the airlines and ground handlers are continuously
searching for higher efficiencies and flexibility to counter the fast pace
and higher globalisation of the market.” On the other, Delvaux observes
that in a volatile environment, companies now generally prefer to use
their available financial resources to fund growth strategies rather than
finance capital expenditure and infrastructure like workshops, “especially
when it is now commonly known that these assets are easily made
available through operating lease arrangements. Accordingly, there has
been an increase in demand for rented GSE and for fleet conversion of
existing fleets,” he adds.
In terms of trends and the general market response towards leasing
GSEs, Alan Stearn – executive vice president at Fortbrand Services – says
it’s tough to make a blanket statement regarding the topic. “We see GSE
rentals prevalent in relation to seasonal equipment, such as de-icers and
air conditioners.
“Also, higher priced equipment, such as pushback tractors, de-icers
and air-starts tend to lend themselves to longer term leases, as the
end=user often prefers to spread the cost of the equipment over the term
of its useful life.
“In addition, we’ve found that ground handling providers often like
to match the term of an equipment lease with the term of their handling
contract, thus providing them with the opportunity to return the equipment
if the contract were to not be renewed,” Stearn explains.
The rental model was introduced quite late in the air transportation
industry, about 15 years ago, compared to other asset-intensive industries
like logistics, construction, road transport, rail or information technology,
where equipment rental had long since become a widely used
method of sourcing equipment.
14 AIRSIDE INTERNATIONAL | OCTOBER 2012 WWW.AIRSIDEINT.COM