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Snacks spin money for budget airlines

By Radhieka Pandeya in New Delhi
May 09, 2007 12:41 IST
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No-frill carriers have found a way into their customers' pockets - through their stomach. They are making profits from selling food on board.

One of the first things to get struck out in a low cost carrier model is the provision of food and beverages in the flight, which in turn reduces storage cost, cabin-crew cost and the obvious cost of the catering itself.

However, increasingly LCCs and even full-service carriers are laying emphasis on the food being offered on their flights. With world leading flight caterer, Gate Gourmet, set to enter the Indian market and recently launched regional airline MDLR Airlines flaunting its vegetarian menu, the market for in-flight caterers is set to increase.

This month, Gate Gourmet signed an MoU with Advani Hotels & Resorts India for the transfer and sale of its flight catering unit, Airport Plaza Flight Services, the only in-flight caterer at Goa's international airport.

Mark Wall, president of the Asia Pacific/Middle East region, explained that India's growing importance is clearly defining a new leadership role in all aspects of the aviation industry, making it a natural area for expansion.

Airline business in India is growing at a rate of 50 per cent in the domestic sector and with the expected number of air travellers to go up by 20 per cent in the next five years, the in-flight catering industry is not complaining over the increasing LCCs jumping into the market.

Take IndiGo for instance. At the outset, the no-frills airline sold only juices, chocolates and cookies to passengers. Recently, the menu was updated and expanded to include vegetarian and non-vegetarian sandwiches as well.

"Our passenger surveys revealed that people wanted something substantial to eat on a two-hour flight. Plus, sale of snacks is extra revenue for us. On an average, almost 50 per cent of our passengers buy snacks," reveals a company insider.

MDLR has roped in Sky Gourmet to cook up a menu of heavy snacks instead of a full meal. This, discloses Koustav Dhar, president commercial and special projects, MDLR, "will make our prices lower than full service carriers as the menu won't be as exhaustive but equally filling".

Most LCCs continuously experiment with their menus. Air Deccan, for instance, recently introduced combo meals, comprising sandwich, fruit cake, samosa, kachori and croissant.

"Passengers are more than willing to purchase food on board since they have a variety of good snacks to choose from," says a spokesperson for the airline. 

GoAir and Air Deccan are two air carriers that have tied up with coffee chain Cafe Coffee Day for its in-flight catering. Murli Krishnan, general manager, Ambassador Flight Catering, says that they sell in bulk to airlines like IndiGo and Spice Jet.

In fact, they are also dealing with GoAir and Air Deccan through Cafe Coffee Day. "I get very good response from the airlines. Our bulk orders have increased over time, which means that more and more people are buying on the flight," he says.

Agrees Sanjiv Gujral, general manager, TajSATS, "No-frills airlines are now converting into meal offering ones, even though they are selling their snacks. Since demand is growing, and though there may be little change for caterers like us who supply to the full service carriers, for other caterers business is looking up."

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Radhieka Pandeya in New Delhi
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