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The Airline Food Catering Craze for Outsourcing

AirGuide Online

A fundamental contemporary business problem is highlighted with British Airways' continuing catering difficulties &endash; the current craze for outsourcing. When one major area is a key part of a business there is a strong argument that its workings should be part of that business. After all the supplier's interest is only profit, and they may have other clients to look after too. British Airways catering at Heathrow is probably the largest single food outlet in the world supplying 80,000 meals per day.

A few US airports are actually bigger in terms of passenger traffic the eating requirements are much less due to the majority of flights domestic and requiring less catering preparation. Outsourcing is not just a British Airways problem. It is a universal one. When the numbers are big why can't it be done in-house is the argument raging in boardrooms. How good is the company's own management and its efficiency.

In the meantime the debate continues on what is required regarding in-flight service and the difference between long-haul and short-haul. It is generally held that some form of sustenance is required for long distance flights (generally regarded as over four hours) although an announcement by Song, the Delta 'low cost' subsidiary last week that it is introducing an Orlando &endash; San Francisco service, highlights that on some budget US east coast &endash; west coast flights, often up to 51?2 hours, there is no catering as such, you can purchase on board, bring your own food or go hungry. In truth the airlines still don't know whether to supply meals on short sectors or not!

Back in the early eighties British Airways introduced the British Airways Shuttle on its domestic trunk routes, no food but a guaranteed flight even without a booking. British Midland, now bmi, retorted with hot meals and all the luxuries. From August 1 bmi dropped the cooked breakfasts on its regional services except on what it called its five key routes, whilst British Airways offers hot repast in Club Europe and a warm sandwich in Euro Traveler. Except that is unless you are flying on a British Airways CitiExpress operated aircraft where in the mornings you can have scrambled eggs and all the trimmings. Swiss dropped its meal service back in March and then quickly returned it claiming passenger reaction, but by that time it did have a new master in Lufthansa.

The so-called no frills airlines offer nothing and actually make money on their refreshment sales. The cost of a hot meal is probably around $9/?5, plus a drinks estimate of $3.60/?2 on average and an aircraft cleaning charge of say $3.60/?2 per passenger (based on say $360/?200 for a 100-seat aircraft).The turnaround takes longer too. It all adds up at the bottom line.

The budget carrier has no charges as far as the cabin cleanliness is concerned, the flight staff look after that with the help of passengers, and the average 'take' per sector can be as much as $13/?7 per seat, a discrepancy of up to $36/?20 per booking. The cabin staff, whom it could be claimed work harder, are probably on less take home pay and fewer perks than their legacy airline counterparts.

One very close observer of the Gate Gourmet debacle must be American billionaire investor David Bonderman (who marked his 60th birthday in 2002 by hiring the Rolling Stones and film star Robin Williams to entertain 300 friends in Las Vegas). A founder of the catering company's owner US private equity financier, Texas Pacific Group,he is also chairman of Ryanair. Quite how you equate endowing both a flight catering company and one that has no interest in its passengers at all is questionable. They have one thing in common. Gate Gourmet is clearly not paying dividends and nor, for different reasons, is Ryanair.

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