The strength of a guarantee
“There’s always going to be some airlines that want to control their own cargo buinsess, and there’s always going to be airlines that are looking for additional revenue by outsourcing to a third party,” Dawkins says. “Every airline is looking at their costs, and every airline is looking at the opportunity to outsource.”
The GSA market, he says, is certainly different than when he first started in the business, and he thinks the model will continue to adapt and thrive. In a rocky economy, outsourcing sales is a mighty tempting proposition, but even in the sunnier times, Dawkins says, GSAs will continue to evolve and blossom.
“In three years time, the GSA model may be different to what it was 10 years ago — certainly, I’ve seen since September the 11th that there’s been more understanding of the GSA, more transparency from the airline to the GSA,” he says.
“We continue to see the business model of the GSA evolving in a positive direction,” he adds,” with more investment in IT, more investment in good employees, more investment in revenue guarantees to airlines.”
A forwarder’s perspective
GSAs are a middle man between forwarders and airlines, but it seems that most GSAs view airlines as their ultimate client and forwarders as someone with which to do business. Carriers are definitely in the driver’s seat in this situation.
To quickly explain how U.S. forwarders view GSAs in the current market, Bob Imbriani of Team Worldwide took the time out of his schedule to answer a few questions.
Q: As a forwarder, how does working with a GSA differ from working with an airline? Do you prefer one over the other?
A: All things being equal, we prefer to work with the airline directly. However, if it is a small carrier, the GSA does help. The problem with GSAs, in many cases, is they have to go back to the carrier for approval.
Q: Have you seen a trend toward airlines using more GSAs? Are you dealing with GSAs more often than representatives from airlines?
A: I have seen greater use of GSAs for smaller airlines and smaller markets; in other areas, carriers are moving away from GSAs. I have seen where alliances used a single-sales entity and then have gone back to handling it directly.
Q: What do you think GSAs bring to the equation?
A: GSAs have more knowledge about cargo and the needs of forwarders than a small airline might have.
Q: How do you think GSAs need to evolve, and what do you expect to see out of the GSA market in 2012?
A: I see more GSAs coming into the market as new airlines expand their cargo markets and as carriers continue to look for ways to cut costs.