When everyone saw the problem but no one changed the price

When I became CEO of Nordic MRO, I inherited a customer relationship that everyone in the organization knew was broken. Yet, no one had fixed it. The customer operated the only aircraft of its model still flying commercially in Europe. We were their sole maintenance supplier. On paper that sounded like a strong position. In practice it was a slow, steady drain: below-zero margins on a specific niche, all the operational risk sitting on our side, and a customer who had spent years dictating conditions while we let them.

The relationship had been kept alive out of loyalty, legacy, and a belief that the volume it generated elsewhere was too important to risk. I looked at the same situation and saw something different.

The facts were not hidden from me. They were not hidden from anyone. We all knew them.

The aircraft model was being phased out. The customer was gradually transitioning to newer models, a process that had been underway for years. Spare parts were nearly impossible to source. The customer never held inventory, always acted too late, and aircraft regularly sat grounded in our hangar for weeks waiting on parts. We absorbed the cost. Every time.

What I observed, coming in from the outside, was that everyone had been looking at this situation for so long that they had stopped seeing it clearly. The losses had been normalized. The relationship had been framed as a liability we had to manage, rather than a dynamic we could change.

I saw it differently from the first time I looked at it.

The assumed power dynamic was inverted. The organization had long operated as though the customer held all the leverage. My read was the opposite: they had no alternative supplier in Europe for this aircraft type. We were their only option. Whatever the customer had spent years believing about who held the power, the structural reality was clear. We held it. We had simply never acted like it.

The second misread was about the future value of the relationship. Previous management had justified the loss-making niche by pointing to the broader commercial relationship, i.e. the volume the customer gave us in other areas. But I could see where that logic was going. As the old fleet phased out, the customer's dependency on us would disappear. Once they no longer desperately needed us for the legacy aircraft, any loyalty would evaporate. They would treat us as a commodity. The volume argument was built on a foundation that was actively shrinking.

We are not a charity. Continuing out of loyalty to a relationship that is losing us money today, on the assumption of loyalty that will not survive tomorrow, is not a strategy. It is a choice to keep losing.

I made the call to reprice the niche at 4x the existing rate. Not as a negotiating position, but as a structural correction. The new price reflected the actual reality: an extremely specialized, increasingly rare service, from the only available supplier, for a customer with no alternatives.

Internally, it was contested. People who had been inside this relationship for years found it genuinely difficult to imagine walking away from the volume. I held the line. The total relationship was loss-making when accounted for fully. The leverage we had would not exist in two years. And the customer would either accept the new terms or leave. To me, either outcome was better than the status quo.

The customer accepted the new terms (but I did have an angry Spaniard calling me, telling me exactly what he thought of the way I did business). The repriced niche generated the cash flow that funded a full year of the company's reconstruction process. It bought us the time and financial stability to rebuild the business on a sustainable foundation during one of the most turbulent periods in aviation history. While we, at the end, filed for bankruptcy after nearly two years of struggle, this decision is what allowed us to try to win.

The leverage had been sitting there the whole time. I was the one who decided to use it.

Compounding friction hides behind familiarity. The most costly situations are rarely the ones that feel obviously broken. They are the ones everyone has normalized. When something has been tolerated long enough, it stops looking like a problem and starts looking like a condition. I have learned to treat that feeling of "this is just how it is" as a signal worth examining.

Misreading power dynamics is expensive. I have seen organizations consistently underestimate their own leverage. Especially in long-standing relationships where the other party has historically set the terms. The structural reality of who needs whom is worth examining directly, without the emotional weight of history distorting the picture.

Volume is not the same as value. The instinct to protect revenue-generating relationships regardless of profitability is one of the most common forms of slow value destruction I encounter. The right question is never just "how much do they buy from us." It is "what does this relationship actually cost us and where is it going."