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Trends: Airlines Cutting Catering CostsMarch 25, 2010 By: George Dooley
Cost pressures are forcing airlines to review inflight catering strategies with wines and dining, giving way to the fine line between profit and loss, reports the International Air Transport Association (IATA) in its current International Airlines journal. IATA is also urging airlines to join IATA’s Catering Quality Assurance (ICQA) program.
"Should airlines continue spending money on catering— is it an essential part of branding?" IATA asks, noting that each year airlines spend about 2-3 percent of total expenditure on catering. "However, this cost center is declining as airlines divest non-core activities in an effort to save money."
“Following the steep drop in traffic after 9/11, many airlines were forced to cut costs, and meal service was one place to do it,” says John Bronson, spokesman for Gategroup, parent company of caterer Gate Gourmet.
IATA says the cuts have been most visible in the economy cabin and were made deeper by the current global recession. The growth of low-cost carriers has also influenced passenger expectations regarding catering, says Bronson. Many network airlines have subsequently dropped inflight catering on short and mid-range flights.And cost reduction is only one of the advantages, IATA says. Less catering means less weight and hence better fuel consumption. Turnaround times also benefit.
“But consigning catering to the waste disposal is not an easy decision. Countless surveys have shown that passengers consistently place catering and onboard service high on the list of determining factors when choosing an airline,” IATA says.
Arguably, catering is becoming even more important. Benoit Pilon, manager of airport and inflight services for IATA, says the rise of self-service technology means that onboard services have become the face of the airline. “Passengers may not get a real feel for the airline brand until they step on the aircraft,” he notes. “That means catering becomes an even bigger window to the brand.”
The key point is that catering can have a significant impact on cost, branding and even the environment. It should be a main course on any airline agenda, IATA says, noting that individual airlines will make independent decisions.
IATA notes that international standards in quality are being developed by IATA as part of the Catering Quality Assurance program. “Over the last five years IATA has played an increasingly active role in catering,” says Pilon.
Launched in 2006, IATA’s ICQA program is the only pooled, third party global catering quality assurance program based on food safety and quality standards. It was established by airlines using a proved and effective audit methodology. According to Pilon, the program’s goal is to protect and improve the safety and quality of inflight food.
ICQA helps airlines meet their due diligence obligations and promote industry best practices through an effective compliance monitoring system. It has already saved member airlines $0.5 million in audit costs and $4 million in reduced claim settlements related to food safety incidents, IATA says.