CargoNewsletter

Newsletter No. 01.2011

Priorities and Challenges for 2011

Security Harmonisation

Training

C2K / e-freight adoption

Expansion of the Network

Centralised Planning

Swissport Formula

WelcomeI am pleased to introduce this fi rst edition of our quarterly Newsletter to you. I hope you will fi nd it interesting reading, and it will give you a deeper in-sight into Swissport Cargo Services’ current priorities and progress.

You will probably have read that Swissport recently changed ownership from Ferrovial to PAI Partners, and some of you undoubtedly have speculated what impact this change will have on our customers and business relationship. To this, I can say that the new owners have invested in Swissport due to its broad market coverage and excellent operational network. As such, the new owners do not want to change strategic direction, but rather focus on growing and expanding our scope even further. Operationally, however, this me-ans “Business as Usual”.

On the topic of “Business as Usual”, we do not perceive this just to be stability - we have this year commenced some important initiatives to increase our customer satisfaction levels and measure our internal and external performance this year. In this Newsletter, we will cover our “Customer Relationship Management Programme” including the fi rst ever customer survey in Swissport Cargo Services.

We will also focus on our performance measurement programme, Swissport Formula and we are going to bring you a few updates from our world including our outlook for 2011 and the opening of our new warehouse in Nairobi.

In later issues, I will introduce our initiatives on Active Leadership training, our pursuit of establishing Swissport Cargo Services as front-runner within Cargo Security and focus on important areas where we can increase the value of our products even further i.e. Cargo 2000 and e-freight.

I wish you happy reading, and would be delighted to receive any feed-back you might have on the contents of this newsletter, so we can ensure a steady improvement.

With best regards,

John BattenEVP Global Cargo

Index

Outlook for 2011

Focus onSwissport – Nairobi, Kenya

Swissport Formula

CRM - Customer Relationship Management

Customer Survey – Result

Outlook for 2011Tonnage may not be as buoyant as 2010. We continue to emerge from the worst fi nan-cial crisis seen in recent times. This forced our entire industry to look in detail at their organisation, processes and structure. At Swissport we learnt a lot, and many of the initiatives started in 2009 continue to be developed today. As a consequence, Swissport is much stronger as an organisation, our quality continues to improve and we are closer than ever before to our customers. The work never stops, and 2011 will be a year spent improving what we do even further. We are never complacent, but much more confi dent in our ability to deliver service through adverse circumstances, whether it is fi nancial chaos, political instability, health epidemic, ash clouds or extreme weather. In fact, all of those things beyond our direct control, that have affected us in recent years and months.

Key to success of this year will be the ability to plan staffi ng centrally for each location,with shift rosters prepared locally. The Centralised Planning Project is underway using

Newsletter No. 01.2011

the raw data from our IT Cargo Handling System. This allows us to see exactly when thepeaks and troughs in volume exist. We can also factor in demand profiles using historicdata from public holidays or periods of low demand during religious festivals. In short,this planning will make us more efficient, reactive and allow intelligent decisions to bemade regarding staffing.

The Swissport Formula will continue to be a cornerstone of our process improvement in 2011. The scope will be expanded to the USA and Africa where preparatory work isbeing undertaken today. Customer Relationship Management (CRM) uses a dedicatedteam to manage the information between Swissport and our Customers. A Manage-ment Information System (MIS) allows us to use KPI results as the backbone of theprocess. We deal in facts and work openly with our customers to improve our serviceto them.

Cargo 2000 and e-freight remain a priority for Swissport, just as they do for IATA. Wewill continue to dedicate Swissport time and resources to support IATA with both in-itiatives.

They will ultimately benefit our customers, and that is our No. 1 goal. Another focus for 2011 will be training. Not just ‘technical and mandatory training’ but developmental training for the individual. If we want to attract and retain the best people, we as an organisation must support them to be the best.

So far, I have addressed initiatives that Swissport can influence directly. There is how-ever one more priority for Swissport, and in fact our whole industry - Security. This is without doubt the greatest priority for us all as without a secure supply chain, we place lives in danger. Swissport is engaging externally with all stakeholders to further enhan-ce and improve the critical components of process in our industry. Internally, we also continue to roll out our Cargo Corporate Security Programme. This addresses not only the safety of the cargo and customers we handle, but also our employees as well.

Focus onSwissport – Nairobi, KenyaSwissport has been operating in Kenya since 1997. Beginning of 2008 the logistic con-cept was re-evaluated together with our customers and a new facility was inaugurated in November 2010 considering the following needs:

· Creating an optimal operational environment to process perishable export goods with a special focus on maintaining the cool chain

· Providing the highest standards in aviation security

· Introducing the latest developments in terms of facilities, mechanisation and automation, geared towards the specific needs of the Kenyan air cargo market, to support airline-specific air cargo products.

· Enabling efficient and customer friendly processes to allow for the fastest possible throughput of Import & Export cargo through the Swissport facility.

· Providing the best possible facilities for Governmental authorities to conduct their activities in the most efficient manner

· Introducing environmentally friendly and sustainable solutions within the possibilities of the local environment.

International Cargo Handler of the Year in Africa 2011

Swissport were delighted to accept the STAT Times “International Cargo Handler of the Year in Africa” award from the Hon. Amos Kimunya, Minister of Transport for Kenya.

Newsletter No. 01.2011

Swissport Formula

So what is ‘Swissport Formula’?Swissport Formula is a ‘toolkit’ for management to run our business more effectively.

Active Leadership & Supervision is a simple concept that is realising real benefits within Swissport. We no longer rely upon guesswork regarding the management of our Stations. Management are equipped with the training and the tools to do their job correctly. And are supported throughout the journey. This starts with an accurate job description that places decision making and accountability in the hands of the indivi-dual. Escalation points are clearly defined and everybody in the organisation knows their role. Active Supervision takes this deeper into the heart of the operation and ensures supervision is in place ‘on the floor’. Engagement with staff, customers and other stakeholders has the highest priority. It is not a concept. It is the backbone of our organisation.

5S is an operational concept developed in Japan and now embedded within many Wes-tern organisations, some with household names such as Boeing, Nokia and DHL to name just a few. The system has also been adopted by Swissport and will be further developed throughout the year. In short it matches work area layout and staff respon-sibilities to the task at hand. It then manages continuous improvement and refinement in a simple but effective manner.

Management by KPI’s. Here it is simple. “If you can measure it you can see it. If you can see it, you can manage it”. We have recently created a Management Information System (MIS) that is populated automatically from various IT platforms to give our Managers full visibility on what their Station is achieving. This encompasses Safety, Quality, Cargo, HR and Financial information.

For the first time, our Managers have true visibility on their area of control and can react much earlier to trends, both positive and negative. Examples might be reduced quality leading to root cause analysis, engagement with the Customer and swift recti-fication. Through Centralised Planning we will be able to re-plan a measurable move-ment in tonnages in response to fleet or flight increases that can be reacted to ensuring no degradation of service. This will become embedded in 2011. Managers will be trained to interpret the results and to steer the business based upon facts without guesswork. The end result is process improvement, a better managed workforce, more efficient planning, closer engagement with our customers, and more knowledgeable staff taking care of our business.

And the winner is ...

We will continue to focus on you, as our customer, and further invest in optimi-sing our services to you. A more com-prehensive document on the Customer Survey will be produced once fully analysed.

The winner of the i-pad which was drawn from the Customer Satisfaction Survey was Denise Carter, Qantas Airways, London. Congratulations to Denise from all and Swissport and thank you all for your honest answers.

Facts & Figures Swissport Nairobi, Kenya

Project / complex

Floor area of the plot of land 19’800 m2

Floor area of buildings 12’000 m2

Floor area of warehouse 10’500 m2

Total warehouse throughput capacity 150’000 tons per annum

Racking capacity for general cargo storage 1’380 Euro pallet positions

Cold room area for perishable cargo 1’200 m2

Storage area for vulnerable / valuable cargo 156 m2

Storage area for dangerous goods 150 m2

Airside interface capacity 29 ULD’s(9 lanes of 3 units each)

Total office space in office block 2’500 m2

Total operational office space 400 m2

Customers

Air Arabia, Air Cargo Germany, Air Madagascar, Air Mala-wi, Air Mauritius, Air Uganda, British Airways World Cargo, Brussels Airlines Cargo, Etihad Crystal Cargo, Qatar Airways Cargo, South African Airways, Swiss World Cargo, Turkish Airlines Cargo, Virgin Atlantic Cargo and Yemenia – Yeman Airways

Customer Comments

“A fantastic, modern facility”!“A clear sign of professionalism is evident in the handling of cargo, courier and mail.“ “New structure promises proper staffing levels in the “lean areas” thus ensuring further profes-sionalism in service delivery.“

Newsletter No. 01.2011

In February/March we conducted a worldwide Cargo Customer Survey, and we are very happy with a return rate of almost 30%! Thank you to all, who contributed to achieve this great result.Invaluable are not only the ratings, but all the comments which were left.

We are currently in the process of evaluating the outcome, based on the rating and the comments, to form task groups and attack the main fields of dissatisfaction.

There are some fields, which clearly need attention, and these are:

· Staffing Issues

· Quality Issues

· Customer Interaction

However, we are also very proud about some very positive com-ments. But not only the comments, also the ratings are at the first glance positive. We are very proud, that we are able to deliver the best ‘Value for Money’, when compared with other Handling Agents.

Thinking of other companies offering the same types of service, how would you compare our pricing to them?

5

10

15

20

25

30

35

40

45

50

muchbetter

somewhatbetter

neither betternor worse

somewhatworse

muchworse

don‘tknow

4,8%

27,7%

48,0%

8,1%

1,4%

10,1%

Thinking of other companies offering the same service as we do, how would you compare our quality to them?

5

10

15

20

25

30

35

40

45

50

muchbetter

somewhatbetter

neither betternor worse

somewhatworse

muchworse

don‘tknow

8,2%

37,4%34,0%

10,9%

4,1% 5,4%

How do you perceive the „value for money“ relationshipfrom the different service providers?

Mercury

CAS-World/Cargo Alliance Services

Celebi

Alliance Ground International

Globe Ground

Local

Flightcare

other Provider

Aviapartner

Dnata

Servisair

Menzies Aviation

WFS

Swissport

5 10 15 20

2,5%

3,0%

3,1%

3,8%

4,2%

4,6%

5,1%

6,3%

6,7%

6,9%

8,7%

12,8%

13,4%

18,9%

Customer Survey – Result

Over the last two years, we have realised that we need to be closer to you, our customers. We decided to start a structured CRM approach to establish transparent and regular information exchange with our customers.

Our aim is clearly to understand your needs to be able to satisfy them better, to be more proactive in our information flow to-wards you and to agree jointly on corrective measures.

We appointed a team of 6 people to take care of our CRM ap-proach and with the implementation programme. They will work closely with our respective Station Management to support this approach.

We also started to implement the C2K measures in our systems in order to verify our performance compared to what has been agreed with you in the SLA’s. The C2K figures will be a basis to detect our strong or weak areas. We will further develop this tool to be able to measure even more milestones and in the near future.

Standard reporting will be common practice; as a result the transparency within our organisations is increased. You want to offer the best service to you and your customers; we want to facilitate it and to improve it. Together we can reach our goals. Count on us!

CRM (Customer Relationship Management)