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Issue link: https://groundsupportworldwide.epubxp.com/i/654993
MARCH 2016 AviationPros.com 13 COVER STORY protecting their proft margin for the entire life of each contract. "You get contracts that require you to start fairly quickly," Bennett says. "There is no time to plan for capital expenditures. You can plan, and have a basic budget in mind for your expenditures, but in this industry, the airline industry, it's a completely moving target." Alternatively, if a ground handling company decides to purchase their equipment outright, that company will face two challenges in the current market. X First, they will need to deploy a great deal of capital from the start, which can constrain working capital and be challenging in such a tight-margin industry. "On the short term position, they have cash on hand so the general thinking is, 'let's spend it.' They're not in a cash pres- ervation mode," says Banfeld. "Historically, when airlines had cash, they were buying down debt. Now, with cash fows reaching an all-time high, some airlines are purchasing all their assets and may not be looking at the big picture for the long term which is to understand the true cost of ownership over the lifecycle of an asset." X Second, after several years, the equipment they purchase may become outdated, and often is not worth what they might have hoped. At that point, they are stuck with equipment that is obsolete, needs considerable maintenance, and is very expensive to replace. As pressure increases to be equipped with the latest equipment, leasing continues to emerge as a fexible fnancial solution. "When money is good, of course, people do tend to like to purchase outright," Bennett says. "Although that's a bit clouded because the money that they actually have in their bank account isn't necessarily theirs. It's their shareholders' money, and sharehold- ers require a lot more profts than fnance companies do." Material/ Technology Changes Prompting Increase in GSE Sales and Financing Two new aircraft types have begun to emerge, the 787-9 and A350. Both are made of more composite materials than aluminum. While the new material will support better fuel effciency and aerodynamics, the challenge is that composite materials can be damaged more easily and it's diffcult to detect if damage was done. For ground support providers, this means that safety is more of a concern than ever before. To be clear, it's understood that safety is always the priority, and all ground support providers seek to maintain a zero accident record. As aircraft material changes, many in the ground support industry will fnd that new A V I A T I O N R E F U E L I N G T R U C K S n G R O U N D S U P P O R T F U E L I N G S T A T I O N S GORMAN-RUPP PUMPS P.O. Box 1217 n Mansfeld, Ohio 44901 PH: 419.755.1011 n FX: 419.755.1251 n grsales@gormanrupp.com 502 © Copyright, The Gorman-Rupp Company, 2016 Gorman-Rupp Pumps USA is an ISO 9001:2008 and an ISO 14001:2004 Registered Company GRpumps.com Gorman-Rupp has been a part of accelerated aircraft fueling and defueling for over 50 years. We have been able to keep pace with technology and design in this ever-changing world of faster, more complex aircraft. Our original designs have set the standard around the world with thousands of units operating in the feld for virtually all major airline and fuel suppliers. We offer a complete line of ground service pumps and related equipment, consisting of standard centrifugal and self-priming pump models, directional valves, educators and a host of other piping accessories. Contact Gorman-Rupp today to see how we can fulfll all of your aviation fueling needs. AviationPros.com/10208885