GSE manufacturers see slow, steady pickup in demand

 - October 8, 2007, 11:31 AM

After more than two years of declines, uncertainty and just plain hanging on, ground support equipment manufacturers are finally seeing their industry gaining strength and sales slowly increasing. Has the economic upturn they have all been waiting for quietly arrived?

Perhaps, but company leaders are not ready to celebrate just yet.

“We thought business had hit bottom during April 2003, but we were wrong,” said Yudie Fishman, president and chief executive officer of Regent Manufacturing of Downey, Calif. Regent builds aircraft jacks, cranes and lifting equipment. “By mid-fall, things had gone from bleak to bleaker. We battled through the SARS epidemic and domestic company bankruptcies. “Since then our company has seen a slow and steady pickup in business, especially during the last two quarters. We’ve even added a second shift.”

In addition to doing a lot of business with the U.S. Air Force, Fishman believes Regent is now benefiting from the pent-up need for ground support equipment that airlines can no longer put off. “We’ve seen nice activity in Asia and other parts of the developing world,” he said. “The domestic commercial scene is showing signs of life, and the regional jet aircraft market is encouraging. “We’ll all continue to dig out from under the rubble that has depressed our industry for the last two years. We’re looking forward to a brighter future.”

Other manufacturers share Fishman’s cautious optimism. Mike Doane, director of sales and marketing at Douglas Equipment, in Cheltenham, UK, sees indications of a recovery, particularly in the Far East, Middle East and Southeast Asia. Douglas builds Tugmaster towing vehicles used to move baggage, cargo and aircraft.

“New airports and runways are being built around the world,” Doane said. “And most major airlines are reporting that their passenger numbers are increasing, even though they’re not producing the desired revenues.

“If the industry stays fairly stable over the coming months, I believe the airlines will begin to generate the profits they would like, and they’ll invest more heavily in ground support equipment.

“Actually, they’d benefit from such an investment. Many airlines, handling companies and airport authorities have not renewed support equipment that, I believe, they should have replaced a long time ago.”

After surviving a general industry downturn that 9/11 and the SARS epidemic transformed into a full-scale economic meltdown, many GSE suppliers are poised to introduce new products and technologies and take advantage of evolving market opportunities.

Growing environmental concerns over airlines’ potentially excessive use of glycol to de-ice aircraft led Vestergaard of McHenry, Ill., to introduce its Freeze Point+ de-icing system to the North American market.

“With this system, an operator can de-ice an aircraft with fluid blended to the appropriate freeze point, plus a few degrees more for additional safety,” said Wade Heisler, general manager of Vestergaard’s North American operations. “The equipment applies an optimal fluid blend–as determined by weather conditions–while using the least allowable amount of glycol.”

Premier Engineering & Manufacturing of Marinette, Wis., recently added a monitoring system to its line of de-icing vehicles. “We can remotely monitor and troubleshoot 29 vehicle functions through the unit’s central processing unit,” said company president Jerry Derusha. “If a customer detects a problem or is otherwise concerned about the vehicle or its de-icing system, we’ll log into its CPU from our office. From there we can diagnose problems or otherwise determine how well the unit is performing.
“The monitoring system also sends us e-mail information when it detects certain vehicle irregularities. This helps us to eliminate problems for the customer before they cause serious damage.”

Regent’s Fishman pointed out that the introduction of a new aircraft gives GSE suppliers a great opportunity to develop and offer new, dedicated equipment. “That’s why we’re excited about the Airbus A380,” he said. “At the GSE show, we’re presenting our first piece of support equipment–a tire bead breaker–designed specifically to handle the Airbus A380’s requirements. We also plan to introduce new aircraft jacking technology designed for the A380. The aircraft weighs more than 500 tons at maximum takeoff weight and requires a whole new approach to jacking.”

According to Doane at Douglas Equipment, as airlines continue to return to profitability and invest in ground support equipment, they will also seek ways to reduce ground support costs. He sees a drive toward one-man towing operations and the use of tugs that do not require a towbar to attach to and move aircraft, and that reduce the time and labor necessary for such operations.

GSE manufacturers agree that they are under pressure to supply the market with high quality systems and equipment while also controlling manufacturing costs and other expenses.

“The volatility of steel prices is a huge problem,” Fishman said. “While the weak dollar has helped us sell our products, it has caused the price of steel to increase by between 30 and 60 percent during the past four months.”

Vestergaard, which manufactures its products outside the U.S., is also sensitive to the currency exchange rate. “Just a few percentage changes in the currency rate can mean a difference of several thousand dollars in the selling price of a piece of equipment,” said Heisler. “The currency situation is improving in the United States, but it is not happening fast enough.”

During the past year, ground support equipment manufacturers started to band together under the banner of a new trade organization called the International Aviation Ground Support Association (IAGSA) headquartered in Falls Church, Va. Under the leadership of IAGSA executive director Clay Tyeryar, the association aims to unite ground support equipment manufacturers and suppliers, influence associations that represent the industry’s customers and serve as the industry’s global voice.

“We need this trade association to properly represent our industry worldwide, and to present a powerful, coordinated international approach to industry issues,” said Doan