Air Transport World

The burgeoning service industry: airlines are delegating many responsibilities to outside agencies that at one time would have been unthinkable. (part 1)

When Eastern Airlines employees walked off the job at Kennedy international Airport in March, 1989, they left behind a self-contained and fully operational terminal capable of serving several widebody aircraft simultaneously. At an airport where the turf war for counter and gate space is fought on a daily basis, a prime piece of real estate was thrust on to the market.

Although the building belongs to the Port Authority of New York and New Jersey, the question of which carrier ultimately would manage the terminal fueled rumors for months. American, SAS, Pan Am and America West were mentioned. But in January, when the authority's verdict was announced, none of these was entrusted with maintaining Building 55. Instead, the contract was awarded to Ogden Allied Aviation Services, one of the oldest and largest service companies in the business.

For the half dozen carriers that occupy the building, Ogden Allied can offer nearly every service short of flying the aircraft: Check-in and passenger handling, skycapping, wheelchairs and special assistance, baggage-room and interline forwarding, all ramp functions, operations and gate control, aircraft line maintenance and de-icing, security and screening, building maintenance and even restaurant and first-class-lounge staffing. Combine all these with its catering division and its monopoly on the JFK into-plane fueling contract and it is conceivable that for some carriers, a solitary station representative can oversee a daily operation through one contracted company.

The situation at JFK is not unique. Deregulation and a changing economy have ushered in several realities that have changed the face of the service industry and altered U.S. and international work practices in other fields as well. The fast pace at which new and merging airlines initiate service to small or untried markets has led many carriers to delegate to outside agencies many responsibilities that at one time, would never have been entrusted to anyone other than a company employee.

As supplementary payroll costs increase and as fare structures and routings ebb and flow constantly, even larger established carriers are turning to outside work forces that can be expanded, decreased or removed on as little as 30 days' notice with no contentious employee dismissals or transfer of heavy ground equipment.

The reasons for the burgeoning service market are many. "Deregulation was a big shot in the arm for us," says one ground-handling manager. …

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