What place does the handling and the rest of the ground services in Iberia as a whole?
The Iberia Group has three clearly identified businesses. The best known and the main one is the airline, but there are two other pillars, such as aircraft maintenance and airport management. Our uniqueness in the last two is that apart from serving our own planes and airlines, we also serve third-party clients.
How many?
More than 150 clients, 53 in the Canary Islands. We are the smallest business in the whole, but quite strategic. We concentrate half of the total workforce of Iberia, with 1,000 workers in the Islands.
In numbers, what volume of business do they move?
Our turnover in all the airports in the network is around 500 million euros per year and we estimate reaching 100 million in the Canary Islands if our aspirations of expanding our presence in the Archipelago are fulfilled; Today, in the Islands we must be around 80 million euros.
“If our aspirations are fulfilled in the contest, we hope to reach 100 million euros in turnover in the Canary Islands”
In which airports of the Islands do you have a presence?
Gran Canaria, La Palma and both from Tenerife. Our goal is now to enter Lanzarote and Fuerteventura as well.
How do they plan to achieve it?
With a strategic bet. We requested authorization from the Iberia Board of Directors and the IAG Management Committee, because we are proposing an investment of 100 million euros, and we have their 100% support. Behind us, the Airports Department, we have more than 8,000 families when the staff of the entire group is around 17,000 or 18,000 workers.
What moves you to want to expand your presence in the Islands?
Many clients that interest us are concentrated in the Canary Islands, such as TUI or Condor. We already have them in our portfolio at other airports on the Peninsula and they cause very intense traffic on the Islands. All this makes the Archipelago absolutely strategic for us.
“Many clients that interest us are concentrated in the Archipelago, such as TUI or Condor”
Are those customers you mention already at the Canarian airports where they operate?
TUI in La Palma and in Tenerife South, where we also serve Condor.
The last contest was failed seven years ago. What has happened since then to make 100 million euros of investment necessary?
That we have to win and that we have a conviction, and not necessarily in that order. There has never been the turnout that exists on this occasion. There are eleven candidates for both Gran Canaria and Tenerife Sur, and we are talking about world-leading operators and handling agents.
This responds to “because you have to win.” And the conviction?
AENA sets minimums in different variables. For example, and simplifying a lot, the specifications require having at least 23% electrical equipment. The more you improve it, the more points you get. Of the 100 million euros to invest, 20 are for the Canary Islands, and a part of them is to place us above 83% in electrical equipment. It is something that will help us to win but, and here comes the conviction, we have been working for many years to be sustainable. We have started a process to transform more than 400 pieces of equipment with diesel engines into electric ones; I insist, out of conviction.
“Our investment forecast for the next seven years is 100 million, 20 for the Canary Islands”
Do you anticipate an increase in the workforce or will it stay the same?
If we win the airports of Lanzarote and Fuerteventura, with direct and indirect employment we intend to exceed 1,500 workers. The specifications require detailing the number of employees assigned to the planes, and we are among those with the highest values. We won’t have any problems either, especially since we are the only handling agent that has signed the agreement before presenting the offer. This has allowed us to know the labor costs to reflect and guarantee social peace. In addition, another aspect highly valued by AENA is the occupational risk prevention management system, and ours has been by far the best in the handling sector for years. And if you ask me about stability, during the past year we transformed more than 2,600 contracts into permanent ones, 270 in the Canary Islands.
Let’s talk about innovation. How has service delivery changed?
We have been the first in the world to use the pushback, which is electric, has no driver and pushes planes out of the terminal. In the offer that we have presented, innovation is one of the pillars, with more than 60 initiatives and nine different technologies. To give just two examples from the Canary Islands, at the Gran Canaria airport we are going to test a hydrogen-powered prototype and in Tenerife, we want the planters to circulate without a driver.
“At the Gran Canaria airport we are going to test a hydrogen-powered prototype”
What situation is the contest in right now?
We are waiting for AENA to say who the winners are. The first news we had is that he wanted to adjudicate or communicate the ruling this month, then it was delayed to June and all the rumors today tell us that this will happen after the summer, at the beginning of September.
Once they get the license, do they have to compete with the other awardees?
There are two in each airport, because in La Palma we are alone but now another one is coming in. One of the phrases that I transmit to the workers at the airports is that winning the contest is essential, but then you have to have clients. What arises is a pure and hard commercial work. Clients come and ask us what quality or price we are going to offer them. Some try to run a contest before they know the winners, so you make them an offer that you then have to keep if you’re chosen. The price fight is quite aggressive.
Also on your part?
We had always been less competitive in that regard, but not in recent years. When we have meetings with clients, they tell us that our image has changed substantially, a lot of modernity, innovation, operational safety and, above all, very competitive prices. In large part because the agreement we have negotiated continues to maintain the salary level above the sector level, but the distance has been shortened.
“Behind the world leaders in ‘handling’ are venture capital funds”
Is the implantation that they have in other places traction?
It is an advantage, of course. We are talking about operators who in many cases are already our clients at other airports. This is reflected very clearly in all Canarian airports, because clients are usually tour operators who fly to Gran Canaria, Tenerife, Lanzarote, Fuerteventura… and are looking for an agent that gives them security and a global service.
I must conclude that behind this effort lies a juicy profit margin.
At least for the competition, quite interesting, because behind the agents of handling leaders from around the world are basically venture capital investment funds.
