How do you negotiate airline and service provider contracts?

1 Understand your market position

Before you start negotiating, you need to assess your market position and your bargaining power. How attractive is your airport for airlines and service providers? How much competition do you face from other airports or modes of transportation? How loyal are your customers and partners? How flexible are your terms and conditions? These factors will influence your ability to demand or offer incentives, discounts, guarantees, or penalties.

2 Define your objectives and priorities

Next, you need to define your objectives and priorities for each contract. What are your goals in terms of revenue, cost, quality, safety, and customer satisfaction? What are the minimum and maximum levels of service or performance that you expect or can provide? What are the risks and opportunities that you need to consider? How do you measure and monitor the results? Having a clear and realistic vision of what you want and what you can offer will help you negotiate more effectively and efficiently.

3 Research and benchmark

Another important step is to research and benchmark the market conditions and the best practices in the industry. What are the current and projected trends and challenges in the aviation sector? What are the rates, fees, charges, and standards that other airports or service providers apply or accept? How do they compare to yours? What are the strengths and weaknesses of your competitors or alternatives? How can you differentiate yourself or add value to your partners? Gathering and analyzing relevant and reliable data will help you justify your proposals and counteroffers.

4 Build relationships and trust

Negotiating is not only about numbers and clauses, but also about relationships and trust. You need to establish and maintain a positive and respectful rapport with your counterparts, and communicate clearly and transparently. You need to understand their needs, interests, and concerns, and show empathy and flexibility. You need to avoid conflicts and disputes, and seek win-win solutions. You need to follow up and deliver on your promises, and acknowledge and appreciate their contributions. Building relationships and trust will help you create long-term and mutually beneficial partnerships.

5 Prepare and plan

Finally, you need to prepare and plan your negotiation strategy and tactics. You need to identify your best alternative to a negotiated agreement (BATNA), your reservation price, and your target price. You need to decide when, where, how, and with whom you will negotiate, and what resources and tools you will use. You need to anticipate the possible scenarios, objections, and outcomes, and prepare your responses and contingencies. You need to set your agenda, priorities, and deadlines, and define your roles and responsibilities. Preparing and planning will help you negotiate more confidently and professionally.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?