Fast food chains all set to fly with you
By Vishakha Talreja, TNN |
Highlights
NEW DELHI: In-flight catering, till now dominated by five-star players, has been thrown open to fast food chains and FMCG players. Cafe Coffee Day, which has a tie-up with Air Deccan and GoAir, is looking at 25% growth per annum for its in-flight catering business. It is also in talks with various other low-cost carriers (LCC) to provide products on-board. According to industry estimates, 65% of passengers buy snacks or beverages onboard in LCC.
Low-cost carriers are also raking in the moolah by providing in-flight food and beverages. Air Deccan���s turnover pertaining to in-flight catering was only Rs 37 lakh in December 2005 as compared to Rs 1.2 crore in December 2006. ���We are looking at 100% growth. In-flight catering is an added source of revenue for LCCs,��� Air Deccan���s head, in-flight sales, Manikantan told ET. About 55% of the people on board Air Deccan���s flights buy F&B (food and beverage) items. It has a revenue-sharing arrangement with Cafe Coffee Day.
Indigo, a low-cost no-frill airline, provides Pepsi and some other products like juices and cookies on-board. It���s conversion rate is around 60-70%. ���With increased competition even full service carriers might have to revisit their in-flight catering model,��� says Indigo���s COO Steve Harfst. About 4% of Indigo���s revenue comes from in-flight catering.
Fast food chains are making best use of the opportunity to expand operations in the air. ���As airlines expand their operations and add new aircraft to their fleet, our in-flight sales also increase. We are looking at volumes and want more and more passengers to buy food on-board. In fact, airlines also order special food products for their crew members, adding to our business,��� says Cafe Coffee Day CEO Naresh Malhotra.
The products are sold at a marginally higher price on-board, as compared to the price offered at its retail outlets, owing to the incentives given to the airline and logistics cost. The chain has a separate in-flight catering division.
However, some low-cost airlines would still like to stick to water and cookies. ���In-flight catering does not fit into low-cost model as loading food products could add to the costs,��� said a SpiceJet official. Frills or no frills, the market for in-flight catering is surely booming.
vishakha.talreja@timesgroup.com
Low-cost carriers are also raking in the moolah by providing in-flight food and beverages. Air Deccan���s turnover pertaining to in-flight catering was only Rs 37 lakh in December 2005 as compared to Rs 1.2 crore in December 2006. ���We are looking at 100% growth. In-flight catering is an added source of revenue for LCCs,��� Air Deccan���s head, in-flight sales, Manikantan told ET. About 55% of the people on board Air Deccan���s flights buy F&B (food and beverage) items. It has a revenue-sharing arrangement with Cafe Coffee Day.
Indigo, a low-cost no-frill airline, provides Pepsi and some other products like juices and cookies on-board. It���s conversion rate is around 60-70%. ���With increased competition even full service carriers might have to revisit their in-flight catering model,��� says Indigo���s COO Steve Harfst. About 4% of Indigo���s revenue comes from in-flight catering.
Fast food chains are making best use of the opportunity to expand operations in the air. ���As airlines expand their operations and add new aircraft to their fleet, our in-flight sales also increase. We are looking at volumes and want more and more passengers to buy food on-board. In fact, airlines also order special food products for their crew members, adding to our business,��� says Cafe Coffee Day CEO Naresh Malhotra.
The products are sold at a marginally higher price on-board, as compared to the price offered at its retail outlets, owing to the incentives given to the airline and logistics cost. The chain has a separate in-flight catering division.
However, some low-cost airlines would still like to stick to water and cookies. ���In-flight catering does not fit into low-cost model as loading food products could add to the costs,��� said a SpiceJet official. Frills or no frills, the market for in-flight catering is surely booming.
vishakha.talreja@timesgroup.com
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