Bond Helicopters - Commercial Pricing Review
The CEO of Bond Offshore Helicopters (BOH) asked Nyras to complete a review of existing and potential commercial pricing models that could deliver cost reductions to customers and improve profitability. At the time (towards the end of 2015), the oil and gas market continued to be extremely challenging, with continuous pressure to respond to falling oil prices. Bond’s customers were primarily oil companies who were applying pressure on BOH to review their contracts, find more cost-effective solutions and thereby help reduce their overall logistics budgets. Hence, there was significant downward pressure on financial results.
We undertook a detailed diagnostic review of the company’s financial performance to determine the relationship between fixed and variable operating cost drivers and customer pricing. We also reviewed the existing customer pricing model. By looking at the company’s profitability through different lenses, such as by contract, base and customer, we determined the main profit drivers. Having established the commercial context for our client, we looked at structures and models being used elsewhere to try and develop alternative pricing options.
Based on robust financial and commercial evaluations, we provided senior members of staff with a clear assessment of preferred options going forward. We also delivered other complementary commercial and financial strategies which, together with the preferred customer pricing model, would help improve profitability in the future. Following this initial assignment, one of our commercial leads assisted senior managers to assess the broader strategic issues facing the company. This involved facilitating strategic review sessions with the full management team and the subsequent finalisation of a profit improvement plan.