Airport Ground Handling Systems Market

Market Overview

The global airport ground handling systems market size was valued at USD 3.35 billion in 2022. It is estimated to reach USD 11.84 billion by 2031, growing at a CAGR of 15.07% during the forecast period (2023–2031). Innovations and advancements in aircraft ground handling systems create opportunities for market growth.

The word "ground handling" in aviation refers to various services that enable an aircraft flight or aircraft ground repositioning before and after a flight. It will typically comprise both ramp service and customer service tasks. Most ground services are unrelated to the aircraft's actual flight and involve other tasks. Ground handling addresses the numerous service needs of an airliner between its arrival at a terminal gate and departure on its subsequent flight.

Ground handling services (when the plane needs to be parked at the gate) should prioritize speed, efficiency, and accuracy to cut down on turnaround time. Profits are correlated with quicker turnarounds and shorter ground times. As a short-term, less expensive alternative to establishing their own ground handling or maintenance capabilities, airlines with less frequent service or fewer resources at a particular location may subcontract ground handling or on-call aircraft maintenance to another airline.

Market Dynamics

Global Airport Ground Handling Systems Market Drivers

Rebound in Passenger Traffic

The year 2021 had a gradual increase in air passenger traffic compared to the previous year, primarily attributed to the effective implementation of COVID-19 vaccine initiatives in various regions. These programs played a significant role in facilitating the relaxation of air travel prohibitions by respective governments. As per the International Air Transport Association (IATA), passenger demand (revenue passenger kilometers or RPKs) fell by 58.4% in 2021 compared to 2019. This decline represented an improvement compared to 2020 when full-year RPKs were down by 65.8% versus 2019. Passenger demand is expected to reach pre-COVID-19 levels by 2024 in several major aviation markets worldwide.

Additionally, the increasing demand for air travel forced airlines to establish new routes to improve connectivity. This resulted in airlines opting for the expansion of their fleet size. It also led to increased airport expansion plans and new airport plans to reduce the traffic in major airports. Expanding airports and the increasing frequency of daily flights are expected to increase the pressure on ground handlers. This factor is expected to drive new ground support equipment procurement worldwide, boosting market expansion.

Growing Focus on Reducing the Turnaround Time of the Aircraft

There is a set amount of time between flights during which all ground handling procedures must be completed for each aircraft. The plane remains parked at the airport while the activities to prepare it for its next journey are carried out during the turnaround time. Turnaround times have become more critical due to the growth in short-haul operations, which account for a higher percentage of flight time. Hence, efficiencies in the process have become more important.

Many airlines, especially the low-cost ones, have achieved a close-to mastery in turnaround time efficiency. The LCCs begin boarding and line people up long before the airplane touches down. Southwest Airlines, one of the globe's largest low-cost carriers, takes around 30 minutes to complete. Efforts are being made to reduce the turnaround time of the aircraft. This can be done by installing more ground handling equipment in airports, which would complete passenger movement, unloading and loading the cargo, refueling, deicing, cleaning, and maintenance checks simultaneously and faster. Such efforts to decrease the aircraft turnaround time are expected to drive the market's growth.

Global Airport Ground Handling Systems Market Restraint

Human Errors During Ground Handling Operations Causing Aircraft Damages

According to the IATA, on average, aviation accidents can happen at the gate and apron area once in 1,000 departures. Similarly, according to the Flight Safety Foundation, 27,000 ramp accidents occurred worldwide (before the pandemic). Ground damage incidents occur around an aircraft on the ground during the working of the airline personnel, either at a maintenance facility or on the ramp. Such incidents are costly for the airline, as it has to bear the repair costs and lose revenue. The IATA predicts total losses from ground damages will exceed USD 8 billion by 2030. Thus, such factors restrict the market growth.

Global Airport Ground Handling Systems Market Opportunities

Advancements in Aircraft Ground Handling

Mechatronics, robotics advancements, and electrical and mechanical innovations are crucial in propelling the aircraft ground handling industry. Modernization of ground handling systems enhances the dependability, security, and productivity of ground operations and aircraft handling. The technology is useful for optimizing the process. Well-integrated, technology-driven ground-handling processes provide a comprehensive view of all activities surrounding an aircraft, thereby reducing turnaround times and delays.

Furthermore, the demand for advanced and connected technologies like XOps is increasing. XOps is a supervisory control platform for scheduling, tracking, and optimizing mobile operations of airside ground handling equipment in airports. XOps technology has been rolled out by Ryanair since 2020 across 24 airports in Spain. This technology is newly installed in all Ground handling Equipment (GSE) at the Stansted hub in the United Kingdom. These advanced telematics devices have been installed on equipment, such as cargo tractors, ground power units, belt loaders, etc., and facilitate safety, tracking, utilization, performance, and efficiency for a fleet of companies, such as Ryanair. Thus, such advancements are expected to create opportunities for market growth.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global airport ground handling systems market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific is the most significant global airport ground handling systems market shareholder and is anticipated to exhibit a CAGR of 15.55% during the forecast period. Due to an increase in the number of airlines and passengers, air travel in the Asia-Pacific region has increased significantly. This expansion has increased the region's demand for airport ground handling. In addition, the Asia-Pacific region is investing heavily in airport infrastructure development, including constructing and expanding new airports. For example, in February 2020, the Indian government introduced the Regional Air Connectivity Scheme, which aims to facilitate regional connectivity by providing financial support and developing infrastructure.

Additionally, the government intends to construct approximately 100 airports by 2035, potentially costing 4 trillion INR. There will be 70 new airports, while the remainder will be second airports or expansions of existing airfields to accommodate commercial flights. As a result, the demand for ground handling services has increased to support the expansion of air travel. The growing aviation industry, infrastructure development, and outsourcing trends increased the demand for airport ground handling services in the Asia-Pacific region, which is anticipated to stimulate market growth for aircraft ground handling systems.

North America is expected to be the fastest-growing market during the study period. The North American growth is attributed to modern infrastructure and the rapid electrification of its numerous ground-handling equipment. The air traffic in the region is continuously surging. For instance, according to the US Bureau of Transportation Statistics, the airlines in the U.S. carried 674 million passengers in 2021, which increased by 82.5% compared to 2020 (369 million passengers). The US airports and airlines are forming alliances to offer efficient ground-handling services in response to the nation's growing aviation traffic. To reduce its carbon footprint, the ground handlers and airlines are deploying new electric fleets at the airport of operations. For instance, to meet the Environmental Protection Agency (EPA) requirements in California and Texas, United Airlines has begun to deploy ITW GSE's 7400 eGPU by replacing the fossil-fueled GPUs. The initial eGPU was deployed in 2018. Therefore, the growing focus of the airlines and ground handlers on electrification of their ground handling fleet is anticipated to accelerate the market growth during the forecast period.

Europe is expected to grow at a considerable rate. With the region's gradual recovery of passenger traffic, airlines are partnering with new and advanced capability operators, which can decrease passenger waiting time and increase operational efficiency, thereby boosting market expansion. For instance, in May 2022, Icelandair signed a three-year agreement with Menzies Aviation to provide a full suite of ground services at Heathrow (LHR), Gatwick (LGW), Glasgow (GLA), and Manchester (MAN) airports. The airports in the country are gradually integrating electric ground handling systems into their fleet to reduce greenhouse gas emissions at airports. For instance, in March 2022, Lufthansa LEOS, the ground handling subsidiary of the Lufthansa Group, announced that it had become the launch customer for the all-electric towbarless aircraft tractor Phoenix E manufactured by Goldhofer. The new battery-powered vehicle can transport up to 352 metric tons of weight. Such occurrences are anticipated to stimulate the regional market's expansion.

Brazil is expected to be the leading revenue contributor in the Latin American region. New international partnerships are expected to drive the demand for handling systems implemented in Brazilian airports. For instance, in October 2021, Lufthansa Cargo was granted a three-year contract to Worldwide Flight Services at Sao Paulo Guarulhos International Airport to handle cargo carried onboard its passenger, freighter, and freighter services. This contract brings in new equipment and increased sortation activity within the airport. Owing to such developments, this region is expected to witness a decent expansion rate during the forecast period.

Competitive Analysis of the Global Airport Ground Handling Systems Market:

Segmental Analysis

The global airport ground handling systems market is segmented by type and power source.

Based on type, the global airport ground handling systems market is segmented into aircraft handling, passenger handling, and cargo and baggage handling. 

The aircraft handling segment owns the highest market share and is estimated to exhibit a CAGR of 14.79% during the forecast period. The aircraft handling systems include refuelers, tugs and tractors, lavatory service vehicles, deicers, pre-conditioned air units, ground power units, fuel trucks, and other ground handling systems in airports. As a result of the pandemic, airports across the globe are investing heavily in improving their existing ground handling systems by introducing new equipment for their efficient operation. The US Federal Aviation Administration (FAA) has allocated a budget to various airports in the United States for the procurement of ground power units (GPUs), pre-conditioned air (PCA) units, and deicing equipment during the forecast period. For instance, Charles M. Schulz-Sonoma Airport was allocated USD 220,411 to procure two mobile GPUs. Such development of new equipment is anticipated to expedite the expansion of the market during the forecast period.

The passenger handling systems include passenger boarding staircases, bridges, buses, and other systems at the airport gate that help the passengers in boarding and de-boarding the aircraft, as well as catering trucks that are used to facilitate the unloading and reloading of food and beverages for passengers and crew. Large airports deploy passenger boarding bridges for faster and more efficient boarding/de-boarding passengers, compared to a movable staircase. The robust growth in investments of airports to increase their passenger handling capacities has led to ramping up investments by ground handling providers and airlines to invest in the procurement and deployment of aforementioned passenger handling systems in the coming years. This is expected to drive the growth of the passenger handling segment of the market in the future.

Based on power sources, the global airport ground handling systems market is segmented into non-electric and electric. 

The non-electric segment is the largest revenue contributor to the market and is projected to exhibit a CAGR of 11.08% over the forecast period. The non-electric ground handling equipment is generally gasoline or diesel-powered vehicles. According to the FAA and IATA, these fossil fuel-operated airport access and ground support vehicles like shuttle buses and vans serving passengers and ground support equipment (GSE), among others, also produce carbon and nitrogen emissions, contributing to airport emissions. Most of the on-ramp equipment, ranging from tow trucks to refrigerated lorries, is powered by diesel or other fossil fuels. Nevertheless, airport operators' ongoing fleet modernization plans to reduce their carbon footprint have led to the rapid introduction of electric vehicles in the past few years. Such investments are anticipated to lead to a decline in procurements of non-electric equipment in the coming future.

The electric segment includes fully electric and battery-powered ground support vehicles deployed in the airports. Over the past few years, aviation authorities like IATA and ICAO and airport operators have introduced various plans to decrease overall airport emissions. IATA approved a resolution to achieve net-zero carbon emissions from the global air transport industry by 2050. The plan outlines that airlines use low-emission aircraft to decrease the overall emissions. In contrast, the airport operators and ground handlers deploy electric ground support equipment and other airport operation equipment.

Recent Developments

• November 2022- The Airports Authority of India (AAI) employed two supplementary ground-handling agencies (GHAs) via a worldwide competitive bidding process to enhance the efficiency of baggage handling procedures at the Chennai airport. Celebi Airport Services India and Globe Ground India are the two new agencies that will begin operations at the airport by the end of January, according to airport officials.
• July 2023- Alstef Group, an FTE Baggage Innovation Working Group member, won the contract to design, supply, implement, test, and commission a new baggage handling system at Gwalior Airport in Madhya Pradesh, India.