Partnerships fly in face of recession

7 December 2009
7 December 2009 | Allie Anderson

Collaborative relationships between airline buyers and vendors have flourished at Monarch despite a tumultuous year, a senior buyer has said.

Craig Cherry, head of group procurement at Monarch Airlines, told SM the “rich and varied” problems experienced across the industry since the recession took hold have, in some cases, led to strained relationships with suppliers as organisations strove to make cutbacks.

However, partnership-based relationships between Monarch and its key suppliers have grown, Cherry argued.

He said: “We have seen the need to return to old-fashioned, adversarial ‘blood out of a stone’-type pressure on suppliers at a time when we are selling fewer units – in our instance, seats – at incredibly low prices.

“But true partner relationships have not only survived, but flourished. With the more enlightened partners, we have seen value in the form of savings and other initiatives being passed down the chain, but [other vendors] have shown their true colours.”

Cherry added that Monarch has had to ask suppliers for some degree of flexibility on payment terms. “We have worked with them and asked for the occasional payment deferral or holiday. We find an open, honest and transparent approach has been extremely appreciated and successful,” he said.

Cherry’s comments come after a number of high-profile airline bosses criticised suppliers for not passing on savings. In September, Tony Tyler, CEO of Cathay Pacific, lambasted vendors for “making good profits in these dark, recessionary days” while airlines continued to suffer “chronic underperformance”.

And last month, Ryanair CEO Michael O'Leary threatened to ditch supplier Boeing if it failed to pass on cost savings by the end of the year.
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