Leap of faith

Some 15 years ago, Thomas Widegren was stood in an Italian-based office, gambling his company's fate on nothing more than a drawing pin.

With a world map before him, Cavotec Group's executive chairman closed his eyes and decided to expand the company where ever he placed the pin. Looking back, he believes randomly selecting Dubai was a defining moment for the airport, mining and marine equipment manufacturer.

"We had a company in Italy, which I was responsible for, but myself and the co-directors could see it was a line of business we should no longer be in," Widegren says. "We sold it off leaving me with no work, so I had to find a new market and eventually came across Dubai."

Having taken a "leap of faith", Widegren researched Dubai's market and spotted huge potential for Cavotec's marine, mining and eventual airport operations. The latest financial figures suggest he was right, with the company's aviation business generating US$27.2 million in 2006 - a 10% increase compared with 2003.

Widegren says Cavotec's Middle East operation mostly focused on the marine industry until 2003. But during the past four years, the company has carved out an established aviation business. Cavotec Fladung develops mobile ‘caddy' units that are plugged into stationary aircraft to provide electricity, water and air conditioning before take off.

The caddy concept proved a big hit with Frankfurt airport operator Fraport AG. In recent years, the German company has bought several Cavotec products, encouraging other businesses like Fladung GmbH to follow suit.

Indeed, the airport equipment manufacturer established an alliance with Cavotec on January 1, 2004 following months of talks.

According to Widegren, Fladung's eponymous owner was keen to establish a partnership and secure the company's future following a serious illness. "It all started from there and we came into aviation on a banana; we slipped into it."

Despite settling quickly into aviation, Cavotec's management was surprised by the lack of progress across the industry. "We saw a world that was Stone Age because they [airline operators] have modern technology in new aircraft but on the ground they have no new development, no new ideas, nothing," Widegren says.

The Cavotec team noticed that airlines were losing revenue by keeping aircraft grounded for too long. Widegren and his co-directors subsequently devised a strategy to reduce turnaround times for refuelling and ground checks. "An aircraft is only earning money when it's flying," he says. "So we came in and looked at ideas for creating more efficient systems."

Removing unnecessary equipment and cutting staff were the obvious steps, according to Widegren. To further reduce turnaround times, Cavotec's design team developed a mobile caddy that plugs into the aircraft's belly. Widegren says providing electricity from under the plane creates more space for ground handling operators to work.

"You have less cooks making the soup, so we simplified the system while trying to increase efficiency and productivity. Normally, on a new large aircraft you can walk under it without any problems, which means you can also operate from underneath." Like Fraport AG, airport operators and civil aviation authorities in the Middle East were quick to enlist the caddy system. During the past four years, Cavotec has secured several clients, including Dubai Department of Civil Aviation, UAE carrier Emirates and chartered flights provider Royal Wings.

The company has worked on Concourse 2 at Dubai International Airport and is in talks with Qatar Airways about carrying out similar duties in Doha. Elsewhere, Cavotec supplies marine, mining and aviation services to some 40 countries across Europe, the Far East and Australia. The caddy system may be Cavotec's flagship aviation product, but Widegren and his colleagues are also keen to roll out new systems.

Its latest venture is a more energy efficient and environmentally-friendly air conditioning unit for aircraft landing in hot climates. Most planes carry an auxiliary power unit - a turbine located in the tail - which consumes some 800 litres of kerosene an hour.

It's a costly system that reduces airline profits while boosting fuelling company coffers, according to Widegren.

"If you have 120 aircraft sitting in Dubai and running on an auxiliary power unit (APU) it creates incredible pollution," he adds. "Why are they running APU? It comes down to aircraft not having technically competent air conditioning systems in place."

In most cases, pilots have no other choice than to run the APU unit while grounded. The system helps power the plane before take off, although airport operators in Zurich, Brussels and London are clamping down. Indeed, pilots flying out from these hubs can only switch the APU on two minutes before departing. "If you take Terminal 5 in London as an example, it is the first full green terminal in the world and it's forbidden to run the APU before leaving," Widegren says. Nevertheless, most airports still allow pilots to run the system for long periods on the ground. To reduce fuel consumption while the APU is active, Cavotec has developed a more energy efficient air conditioning unit.

The benefit for airlines is having a system that continues to cool the aircraft while cutting kerosene costs. Widegren says the unit is attracting interest from several authorities and airport operators, with orders expected soon.

READERS' COMMENTS

MORE FROM ARABIANBUSINESS.COM