Airline In-Flight Services News.


New York (AirGuide - Airline In-Flight Services News) Jun 16, 2013

European carriers appeal to all fliers with upscale, add-on meals The days of bland economy-class food are numbered, with EuropeOs full-service carriers dishing up gourmet menus reminiscent of the golden age of air travel as they look for ways to squeeze more revenue out of passengers. Enlarge image Air Canada Chief Executive Officer Calin Rovinescu Air Canada Chief Executive Officer Calin Rovinescu said, OIn terms of competing with new entrants, with folks who have a significantly lower cost than we do, the best way of competing was to give the exact same price on the base fare and then start incrementally adding to that.O Photographer: Nadine Hutton/Bloomberg Enlarge image Mystery Meat No More as Airlines Go Upscale to Milk Extra Profit British Airways in February started sales of cheaper hand-luggage-only tickets, a move consumer groups say amounts to charging for checked bags. As well as establishing checked luggage as a generator of revenue, the move has the advantage of reducing take-off weight, allowing for lower fuel consumption and faster turnaround times. Photographer: Chris Ratcliffe/Bloomberg Air France is tempting economy-class customers with paid-for meal upgrades featuring foie gras terrine, and Austrian Airlines has Wiener schnitzel and sushi among its 15-euro ($19.60) in-flight nourishments. TheyOre part of a growing trend of carriers charging for auxiliary services, including lounge access or individual aircraft seat choice. The move comes two decades after Ryanair Holdings Plc started a cultural revolution in Europe by making passengers pay for snacks and drinks. So-called ancillary sales ranging from food to overhead-bin space have jumped more than tenfold to $36 billion since 2007, amounting to 5 percent of the total $680 billion earned by airlines last year, International Air Transport Association Chief Executive Officer Tony Tyler said. OThe low-cost carriers have taken ancillary revenue from a normal way of doing business and turned it almost into an art form,O said John Dabkowski, managing director for airline technology company Navitaire Inc. OTheyOve set the customerOs expectation, so people now are not offended by it.O Untapped Niches Ancillary sales will rise to $50 billion in the next five years, John Thomas, a senior managing director at L.E.K. Consulting LLC said this week in Cape Town, where IATA held its annual meeting to discuss industry trends. Revenue streams that remain untapped -- in-flight entertainment, wireless access and shopping -- could be worth about $5 billion, he said. OWhen people get on board an aircraft, theyOre actually in a great retail mindset,O Thomas said. OAbout an hour into the flight, they start to relax and their mind opens.O Opening their wallets, too, has become a major ambition of airlines. Air Canada has seen ancillary revenues for services ranging from baggage fees to lounge access climb 30 percent annually since 2009, CEO Calin Rovinescu said. OIn terms of competing with new entrants, with folks who have a significantly lower cost than we do, the best way of competing was to give the exact same price on the base fare and then start incrementally adding to that,O Rovinescu said. Air France sold more than 26,000 menu upgrades priced at 12 euros and 28 euros to economy- and premium-economy fliers in the nine months to March 31. The Paris-based carrierOs duck confit with mushrooms and sauteed potatoes, followed by Opera cake for dessert, costs 18 euros. EasyJet Plc, EuropeOs No. 2 discount carrier, charges 8 euros for its Omeal dealO featuring a sandwich, tea or coffee and a Twix chocolate bar. New Model OWeOre moving away from historic all-in pricing,O said Donal OONeill, an analyst at Goodbody Stockbrokers in Dublin. OFor airlines like Air France, where the margins are so razor thin at the moment, every cost saving can be material.O Pre-booking is key to boosting quality while trimming waste, helping to make the paid-for-food model cost effective, said Caroline Hanly, head of catering at Dublin-based Aer Lingus Group Plc, which began offering three-course upgrades to economy-class passengers on trans-Atlantic trips in February. OWeOre going to know exactly how many people on board are going to want certain meals,O Hanly said in an interview. By selecting traditional Irish fare such as soda bread and black pudding, itOs also an opportunity for Aer Lingus to highlight its status as an indigenous Irish brand, she said. Design Challenges Regardless of the quality of food, catering also poses a design challenge to...

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