The Airline Industry and How They Use Contract Management

The Airline Industry and How They Use Contract Management

The airline industry is a complex and highly challenging industry. With a huge supply chain, the vendor management must work efficiently on every level and at every stage, from procurement of contracts to offboarding a vendor on contract termination or during the exit strategy. There must be a framework in place for governance and control of end-to-end contract lifecycles. As expected in an advanced industry such as aviation, technology and automation play a big part in the management of such a large extended enterprise. By employing contract management software, airlines can ensure all the key elements and processes involved in the lifecycle of any contract run smoothly and efficiently, which not only improves productivity and revenue, but helps with risk management, and protects the company from financial and reputational damage due to non-compliance with regulations.

Procurement phase

There are many complex elements to procurement. Establishing the requirements of the organisation and then converting those needs into finding the right supplier, whilst managing the expectations of stakeholders and negotiating the best contract for the airline, can sometimes be a lengthy process. Contract management technology, such as the CLM from Symfact, can play a large part in making the procurement phase easier.

Ascertaining the criteria that needs to be met and creating risk profiles for suppliers is done by using software that has links leading to external databases such as those from Dow Jones and Thomson Reuters. Having access to advanced security profiling of both businesses and individuals and comprehensive background checks can help procurement teams analyze and evaluate the risks and suitability of each vendor and concentrate their resources on only those proposals and bids that are most likely to succeed.

During the negotiation and contact creation phase, the standardized language and pre-approved contract templates that can be created using contract management software is a useful tool for airline procurement and/or legal teams. The contracts can be configurable to specific clauses and can be regularly updated, which improves productivity and timing during contract creation and helps ensure compliance with any legal or regulatory rules. Having a library of standardized terms and clauses set up in the software can help identify any contracts that may include particular provisions, which helps with monitoring later in the contract management process.

All the information and data collected during the procurement stage, including contracts once negotiated and signed, can be stored in a centralized repository. By keeping all the information about bids, contracts and services in the central repository offered by contract management software, organizations in the aviation industry can maintain and manage the complex information and control organizational structures with minimum complications.


Management of Contract Performance

Due to the nature of the aviation industry and airlines, supplier performance and the deliverables and obligations required are vital to the running and success of the organisation. The reliance on an organization’s extended enterprise, or supplier eco-system, is huge and therefore should have the contract management in place to support it. This means there needs to be continual monitoring and evaluation of contracts and suppliers throughout the entire lifecycle. End-to-end management is a requirement for businesses in the airline industry and where contract management software is of huge benefit. By continually managing your contracts using automated processes, organisations are less likely to miss the end of contracts and renewals, and by monitoring KPI’s and analysing operational data and workflows, there is a complete overview of a contract.

Automated reporting features track valuable information, and trigger and event notifications can be set up for any specific event or milestone during a contract lifecycle. This helps airlines to have complete control over contracts and projects and helps with end of a contract lifecycle, as unproductive contracts won’t be left to auto-renew and organizations can stay on top of timelines regarding renegotiating contracts and exit strategies. Some automated management software includes a complete revision history tool, tracking how procedures, regulations and management has changed over time.


Staying compliant

A very real issue for the airline industry when considering contracts and their extended enterprise of suppliers and vendors is the sheer number of regulations and regulatory bodies involved in the industry. The task of compliance can be helped by a software solution. Some software providers offer aviation specific management systems that can make the monitoring risk and compliance process simpler and help protect the organisation by the automation of auditing and monitoring. This allows risks that can have a detrimental effect on the organisation or relationships with suppliers to be managed and mitigated in a timely fashion.

A useful aspect of some contract management software in terms of compliance, is a configurable control access interface, which allows the management over access to information and data. Due to GDPR regulations and their equivalent across the world, having full control over access to documentation and data is beneficial in staying compliant with the appropriate legislation. This control over who has access also improves security and makes organizations less vulnerable to outside influences and attacks, something the aviation industry takes very seriously.

Using the tools provided in contract management software, airlines can ensure the proper management of risk and compliance, preventing any gaps or delays in an organisations eco-system as well as ensuring compliance with internal policies and outside regulations that may have negative and costly consequences.


By implementing a contract management software solution, the aviation industry can start taking control and improving governance from procurement to off-boarding. Using automated technology can enforce standards and processes and increases the accuracy of third-party due diligence. By taking advantage of the control and overview the software offers, organizations can better ensure governance and compliance, essential in the heavily regulated aviation industry. From a financial perspective, having datasets from the contract management processes in one place can also help by enabling organizations to plan for future agreements by predicting any third-party supplier behaviour, optimizing both financials and obligations.

The secret to success is often implementing the right solution for your business and with specific, solutions tailored to industry, Symfact can offer organizations all that and more. So, contact us today.