Lufthansa: Contract Negotiations and Ground Handling 🌐 KBC
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Innovation | Aviation

Lufthansa Contract Negotiations: Rethinking Ground Handling

Lufthansa was set to award a new ground handling contract. The contract was worth several hundred million euros and had a term of five years. Ahead of the next request for proposals, KBC helped Lufthansa systematically break down the 300-page contract and radically rethink its structure and assumptions. New contract modules were developed as paper prototypes and validated with relevant experts. This laid the foundation for significantly improved collaboration with ground handling service providers.

The Contract Process in Numbers

Pages
: Existing contract systematically revised
Contract Value
Years of Term

The Customer

Lufthansa

The Lufthansa Group is a global aviation group and one of Europe’s leading airline groups. In the run-up to the re-award of a contract for ground handling services, Lufthansa prepared a request for proposals. The services encompass a complex chain of critical activities, ranging from baggage handling to inspections. External service providers perform these services under long-term contracts. 

Lufthansa should therefore conduct a thorough review of the contract design for the upcoming tender. Given that the contract is worth several hundred million euros and has a term of five years, the focus was particularly on the allocation of responsibilities, contract management, and oversight.

The Project

Rethinking the Contract Process for Ground Handling with The BOLD Way

During the contract development process, BOLD KBC Center for Innovation systematically dissected the existing 300-page contract and scrutinized the underlying assumptions. The focus was on the contract structures, the allocation of tasks and responsibilities, and the mechanisms for managing performance. The connection to the BOLD methodology lies in this radical approach: rather than merely supplementing existing provisions, the components of the contract were critically examined and reimagined. 

Based on this, the team developed new contract modules as paper prototypes. Relevant experts reviewed and validated the drafts. This ensured that subject-matter expertise was incorporated into the design before the concepts were incorporated into the final contract. 

The prototypes made alternative contract modules tangible at an early stage. This allowed experts to review and validate the proposed content before it was incorporated into the final contract draft. 

The review also revealed differences in understanding among the departments involved. Even concepts that were ultimately not included in the final contract helped to identify and clarify these discrepancies.

Portrait photo of John Dowling, a partner at Kemény Boehme Consultants (KBC). A man with short, graying hair and square dark glasses looks calmly and confidently into the camera. He is wearing a dark navy blue suit over a light blue shirt without a tie, with one hand in his pants pocket.
Portrait photo of John Dowling, a partner at Kemény Boehme Consultants (KBC). A man with short, graying hair and square dark glasses looks calmly and confidently into the camera. He is wearing a dark navy blue suit over a light blue shirt without a tie, with one hand in his pants pocket.

This Is How We View the Contract Process

A contract should not be viewed as a set of rules that cannot be changed. The BOLD perspective helps reorganize contract components and systematically review tasks, responsibilities, and control mechanisms. Paper prototypes make alternative contract modules tangible early on and can be validated with experts. This brings different perspectives to light and allows them to be clarified before provisions are incorporated into the final contract. This creates a solid foundation for making collaboration with service providers more transparent and for tracking performance more effectively.

John Dowling, Partner at KBC

The result

A solid foundation for cooperation

The revision improved the contract, particularly in the areas of task allocation, contract management, and KPI tracking. At the same time, it uncovered misunderstandings between departments and helped to clarify them. Concepts were also reviewed that were ultimately not included in the final contract. The benefit, therefore, lay not only in the new contract modules but also in bringing different perspectives to light and addressing them through collaborative work. The modules developed were validated as paper prototypes with relevant experts. This created a foundation upon which Lufthansa could further develop the contract design prior to the new award. 

The project laid the groundwork for more efficient and transparent collaboration with ground handling service providers. The focus was on defining the allocation of tasks, contract management, and the tracking of key performance indicators. These aspects bridge the gap between contractual arrangements and operational collaboration: tasks and responsibilities are defined more clearly, management is addressed in a more targeted manner, and the collaboration is built on a more transparent foundation. 

The reference provided does not include any specific financial savings figures or details regarding the outcome of the subsequent request for proposals. Therefore, no results will be added in this regard.

Portrait photo of John Dowling, a partner at Kemény Boehme Consultants (KBC). A man with short, gray-streaked hair and distinctive dark brown rectangular glasses looks calmly and intently into the camera. He is wearing a dark blue suit with a matching jacket and pants over a light blue shirt without a tie; one hand is casually in his pants pocket, the other loosely at his side, and he maintains an upright and confident posture.
Portrait photo of John Dowling, a partner at Kemény Boehme Consultants (KBC). A man with short, gray-streaked hair and distinctive dark brown rectangular glasses looks calmly and intently into the camera. He is wearing a dark blue suit with a matching jacket and pants over a light blue shirt without a tie; one hand is casually in his pants pocket, the other loosely at his side, and he maintains an upright and confident posture.
John Dowling
Partners

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