In 2015 Procurement & Supply Management team at Etihad Airways was asked to find $17m savings in ground handling, a task the team considered “an impossible target”. Procurement’s attention turned to India, a key market, where Etihad commands a 21% share of international traffic.The team launched a Pan-India tender for ground-handling services at the 11 Indian airports where Etihad operates, something no airline had attempted before. It brought on board India-based Jet Airways, an airline in which it has a minority stake, to create economies of scale. While dealing with different company cultures was a challenge, Jet Airways’ expertise in local conditions helped negotiate even better value. Ground handling agents were encouraged to think of Etihad as a group rather than an airline and as a source of more potential custom. The new arrangement achieved $15m in savings, volume discounts and improved procurement’s reputation.
Judges said: “Savings were achieved. But the reputation of group procurement was the clear winner.”