July 25, 2024

Catering on the bounce

Stuart Forster reports on growth in the global inflight catering industry at a time of rising costs… 

Inflight caterers are reporting an upswing in business. That is linked to a rebound in international travel, stimulated by Covid-related restrictions being lifted worldwide.  

Yet as the 2022-23 annual report of Singapore-based SATS Ltd. points out, the “pandemic and geopolitical events in the past few years have caused massive disruptions in the global supply chain.” Those mean caterers are being hit by significant rises in the costs of fuel and ingredients.  

Notably, Russia’s invasion of Ukraine has played a role in pushing up food prices. And in July, India banned exports of non-basmati white rice. Pierre-Olivier Gourinchas, Economic Counsellor and Director of the Research Department at the International Monetary Fund, has warned that global grain prices could rise by up to 15% this year. Caterers will need to plan accordingly. 

Upward trends

During 2022-23, SATS recorded revenue growth of $581.5 million, up 49.4% to $1.76 billion, but a $26.5 million loss – partly due to one-off expenses. It produced 134.3 million meals for 508,600 flights. Present in 27 countries, SATS has more than 46,500 employees, 2,000 of whom were recruited and trained in readiness for travel’s rebound.  

DO & CO’s 2022-23 annual financial report states that the airline catering market had reached “approximately 70% of pre-crisis levels” noting “a strong upward trend”. From its 32 gourmet kitchens on three continents, it catered for 125 million passengers on 705,000 flights.  

“Summer 2023 is proving to be a time of strong rebound for the travel industry. Most of the markets Flying Food Group is servicing have opened. Both domestic and international destinations are seeing increased traffic,” affirms Nicolas Rondeau, Executive Vice President Sales and Marketing at Flying Food Group, which began handling new accounts across the US. 

Similarly, Newrest reported contract acquisitions in its most recent annual report and the takeover of an inflight catering unit in Houston, dedicated to United Airways, counted among performance highlights. Airline catering contributed 43% of the company’s consolidated 2021-22 revenue, surpassing the 42% of pre-Covid 2018-19. 

Increased production

“Over the past year, we have substantially increased production to support airlines to expand their operations in key markets, including Australia, UK and USA. In the financial year 2022-23, our teams uplifted 111 million meals to airline customers, which represents a 179% growth year over year,” comments Robin Padgett, CEO of dnata Catering and Retail, which has 10,500 professionals across 60 locations in 11 countries. 

He predicts that retail is set to grow: “Buy-on-board programmes allow better customer choice and the opportunity for airlines to drive ancillary revenue. It requires a mastery of disciplines such as product sourcing, ranging, merchandising, data analytics, technology and supply chain management. We’re seeing legacy and long-haul carriers become more interested in this area. dnata is one of the few organisations to have this full suite of skills and we have been successfully developing this part of our business.” 

“We’re also seeing high interest in healthy onboard options and a huge rise in non-meat alternatives. Vegan or vegetarian alternative offerings are being demanded by airlines, which need to be as good or better than meat-based products. We’re working closely with our customers to deliver innovative, delectable meals that passengers love,” adds Padgett.

Culinary treats

Sebastian Schäfer, Manager Culinary Excellence at the LSG Group, makes a similar observation: “At the moment, vegan food is a big trend in the worldwide airline catering market. This is not only down to people who do not consume meat or dairies at all. There are more ‘flexitarians’ and passengers who like to explore vegan options out of curiosity – as they can present a culinary treat when prepared in a creative way.”  

In the pandemic year 2022, the LSG Group counted 18,778 full-time equivalents (FTEs) at 131 locations in 40 countries worldwide and generated consolidated revenue of €1,960 million. LSG Sky Chefs produced 275 million airline catering meals, and 33 million food commerce units. 

“There is no way around sustainability in our industry. Increasingly, airlines are asking for the footprint of catering – also because it is important to their passengers and therefore for their Net Promotor Score (NPS). We can help them to become more environmentally friendly and at the same time more customer-oriented,” comments Simon Frischemeier, Head of Sustainability at the LSG Group. 

Expect more sourcing of ingredients locally, improved automation and greater use of artificial intelligence-powered technology to analyse consumption count among the trends impacting catering as we move forward.