Despite the global capacity for air freight increasing by 14% compared to April 2022, the year 2022 gave mixed signals for the air cargo industry. Year-over-year demand fell by 9% from March 2022 to March 2023, resulting in low volumes and leaving warehouses full but shelves empty.
As YoY demand fell by 9% from March’22 to March ‘23 this demand and supply imbalance has resulted in low volumes, with levels reaching those seen during the pandemic, albeit with a YoY decline.
However, there is some positive news on the horizon with the IMF forecasting growth to fall to ~2% in 2023, before settling at ~3% in 2024. Additionally, the demand and supply imbalance has improved since March 2023, So, the honeymoon period is over and the real test for GSA/GSSAs is now.
It is evident that the market is undergoing a dramatic transformation, with the role of GSSA/ GSA significantly changing to adapt to the shifting market demands and offer airlines a suitable plan of action.
Today, GSAs/GSSAs have evolved beyond being merely a sales arm of an airline, instead becoming a vital contributor to the airline’s market share and profitability.
Despite the challenges posed by the pandemic and the Russia-Ukraine conflict, the Indian aviation industry has continued to grow, thanks to the government’s initiatives such as the Udaan scheme and favorable logistics policies that have made air travel more accessible and affordable for the masses.
This growth has translated into significant advancements and growth for GSSA/GSAs in India, which play a crucial role in handling sales, ground supervision, and operational support for airlines in a given territory.
It can be attributed to post-pandemic factors like the liberalization of the aviation sector, the rise of low-cost carriers, and technological advancements that have revolutionized the traditional landscape of GSAs/GSSAs. Furthermore, GSSAs now play a significant role in enhancing the customer experience, and as the Indian aviation industry grows, the role of these agents is set to expand even further.
Despite the uncertain nature of the industry, airlines expect better services, detailed market knowledge, and reliability from their GSA/ GSSA, particularly after recent black swan events like the pandemic, the recession, and the Russia-Ukraine conflict. As a result, GSAs/ GSSAs are focused on establishing closer relationships with key agents, offering an extensive network with the ability to maximize sales actions.
But, GSAs/GSSAs will have to evolve from sales as a function towards offering a whole suite of air cargo services to survive in this rapidly changing market.
Allied Aviation, as a GSA, has recognized the changing market demands and transformed into a company that provides a complete range of air cargo solutions. We have adapted our services to include certified ground handling supervision, reliable cargo management services, and a technological arm.
With years of experience in the industry, we understand the importance of keeping up with the latest trends and technology.
We are not only driven by market numbers but also by our values. We have adapted to black swan scenarios and have become more agile in our operations, relying on market intelligence and years of experience in disaster management scenarios.
In today’s technological landscape, digitizing operations is no longer optional but necessary for survival. However, collaboration is equally vital. As the saying goes, “Two heads are better than one,” and nowhere is this truer than in the aviation industry. So, the traditional GSA model is running on an expiry date.
In the Indian air cargo industry, GSAs and GSSAs are like McDonald’s burgers, and value solutions are like additional fries and coke that make it a complete meal and satisfy the customer. Therefore, companies that can enhance their product and solution portfolio with valuable services will stay ahead of the curve.
As the aviation industry in India continues to grow, the evolving role of GSAs and GSSAs will be instrumental in shaping its future success. Companies must be prepared to adapt to new market trends and emerging technologies, stay at the forefront of innovation, and prioritize customer service.
In the coming years, GSAs and GSSAs must be prepared to adapt to new market trends and emerging technologies. Only by staying at the forefront of innovation and customer service can companies hope to succeed in this highly competitive industry.
This article has been authored by Kritika Seth, Executive Director, Allied Aviation.