The Challenge 

Procure4 challenged the existing supply chain to ensure it delivers value and sustainable savings. The aim was for LCA to achieve contractual and operational stability for 2018 and beyond, with a focus on the capital programme and the needs of an increasing passenger numbers.

Whilst the capital programme will allow LCA to cater for an increasing number of passengers, there will also be challenges, ensuring high quality service levels whilst undergoing an extensive and often disruptive construction programme. Transportation of passengers from/to peer and airplane was a key service that required a guaranteed high-quality passenger proposition to limit waiting times embarking and disembarking the aircraft.

The Approach

The incumbent supplier of the airside passenger service secured the contract through acquisitions. The supplier was in place for a number of years without being formally challenged to improve the service levels and be held to account for delivering it at all times.

As the service had gone unreviewed, Procure4 recommended a soft market test to establish the appropriate levels, and to match the current and future demand. Four suppliers, including the incumbent, were required to assess the demand and propose an indicative proposal; including the required number of staff, buses and associated costs to provide a sustainable service to LCA.

All suppliers who submitted indicative proposals suggested similar scale of service in order to satisfy demand thus providing reassurance around the appropriate size of the service to support a quality proposal to the airport’s passengers.

Following consultation with the client and in line with their short and mid-term strategy, the decision was made to enter negotiations with the incumbent supplier. The objectives of the negotiations were to:

  1. Future proof the service
  2. Establish a robust SLA and KPIs
  3. Mitigate increase in cost of service

Following rounds of negotiations between May and August 2017, the terms of a long-term contract were agreed in principle between LCA and the incumbent supplier.

The Results

The final contract proposal from the incumbent supplier offered a number of advantages to LCA including:

  1. Robust SLA and KPI’s to measure and control the supplier performance on a regular basis
  2. Flexibility to scale the service up or down as the passengers’ numbers and capital programme dictate
  3. Commercial diligence tools to ensure cost of service remain competitive throughout the contract
  4. Mitigate cost of service

Key Facts

4.5 Million passengers +
40 Destinations served across UK, Europe & USA
10% Cost Base Reduction

Testimonial from London City Airport

Procure4 brought expertise and pace to strategic contract negotiations. They understood the impact third party services have on our operations. In a limited period of time, they delivered substantial savings without compromise to delivery”

Donnie Braddick, Aviation Fuel Manager - London City Airport

Similar Case Studies

Transport for London

Category management strategy development for CCTV for London Underground.

> Read Article

You will be surprised at how quickly we can create real value for your organisation through People Powered Procurement. Click here to contact us today.