Turning Service Level Agreements
into
Operational Reality

A recent paper presented by John Bustard to an aviation conference in London

During the past few years I have seen every kind of Service Level Agreement imaginable. Service Level Agreements come in many different formats. They range from one page to more than fifty pages long. Many SLAs contain a number of good measurable standards, whilst others are corporate "wish lists". Some SLAs have obviously been designed by operationally experienced people, whilst others appear to have been produced by a PR company and would not look out of place accompanying the Annual Report!

Most of the SLA's reflected a Corporate view on service delivery, which took little or no account of local conditions. Virtually all the SLAs were presented in different formats. Once a Handling Company has been presented with more than two or three Service Level Agreements by Carriers it becomes in between difficult and impossible for the Handling Company to communicate the contents of each SLA to the operational staff. It is these staff who are responsible to the Carrier for providing good service to the passengers/shippers and good operational performance.

Having being somewhat critical of some Service Level Agreements, it must be said that the basic concept is not only good but essential. If we look beyond the current SLA, we are looking for a document which is simple, relevant to a particular location, separates measurable standards from other service delivery requirements and presents this in an easily recognisable/understandable format.

It is generally accepted that a Service Level Agreement, or something similar to it, is required between a Carrier and a Handling Company. If a Handling Company does not know what standards are required, it is unlikely that they will ever achieve them. If operational constraints cannot be identified, it would be very difficult to make improvements. If it is accepted that we do need some statement concerning service level requirements, then what are we looking for in the future which will improve on the current rather confused and confusing situation? We are looking for some form of standardisation which will convey the same information in a more easily understood and acceptable format. In order to achieve this objective, IATA has produced a "Memorandum of Understanding" (AHM 803).

The Memorandum of Understanding accompanies the IATA Standard Ground Handling Agreement (AHM 810). There are no restrictions on the length or scope of activities in the M of U. The majority of Service Level Agreements issued by Carriers are not binding and the same can apply to the Memorandum of Understanding. One of the main advantages of this document is that it provides a standardised and therefore more easily understood approach to setting and implementing service delivery requirements.

Where no Agreements or Understandings exist between Carriers and Handling Companies, the "blame culture" flourishes, with each side blaming the other for problems, whether these problems are real or simply imagined. We have all seen this situation, it is usually accompanied by a considerable amount of letter writing!

So - how do we develop more productive partnerships between Handling Companies and Carriers? How do we translate service level requirements into operational reality? How do we focus the attention of staff on the core activities which lead to, amongst other things, improved operational performance? The answer to all of these questions may lie in the use of Airport Handling Standards 1000 (AHS 1000), which not only is now the most widely used quality measurement and control system worldwide involving handlers and carriers but is also IATA AHM 804 compliant.

AHS 1000 fits perfectly with any Service Level Agreement. AHS 1000 is not an alternative to a Service Level Agreement but works with it. It is a tool through which SLA requirements can be communicated to the operational staff of the Handling Company. It is unrealistic to expect the operational staff to be fully aware of all the contents of the average Service Level Agreement. It takes all the core activities and presents them to the staff in a simple format that they can use to deliver the required results.

The system for implementing AHS 1000 requires the Handling Company and the Carrier to agree which activities are to be monitored and the standards which are to be achieved. The process inevitably leads to both parties working together in order to achieve the required results. The system enables both parties jointly to be able to identify problem areas which may be putting operational performance at risk.

The partnership through AHS 1000 reduces the impact of future problems through the use of open and honest negotiations/discussions, creating short, medium and long term objectives and providing a framework for future problem solving. The effects of a Handling Company working with a Carrier rather than for a Carrier are very considerable. It enables both parties to combine their energy to solve current problems and plan for the future. Most Carriers and Handling Companies have some form of system for data capture, but they often do not have good evaluation systems or share the information with the other party. On the other hand, AHS 1000 works on a partnership basis throughout the process. The system has been designed by the airline industry for the airline industry. It requires Carriers and Handling Companies to work together. It enables attention to be focused on any particular area, such as turnaround times. It converts a service level requirement into operational reality through a productive partnership.

SERVICE LEVEL AGREEMENTS (SLA's)