Airline companies operating amid stiff competition travail towards ameliorating the delight of travelers by differentiating their in-flight experience from their competitors. On similar lines, airlines are expending great efforts towards upgrading their in-flight catering services to match the evolving food preferences of passengers, particularly given their increasing intelligence apropos of health and nutrition.
The millennial population can be deemed as the key demography of the in-flight catering services market, on account of their discretionary spending and increasing domestic and overseas travelling activities. Shifting paradigms of passengers from complimentary to à la carte meals have surfaced an opportunity for low-cost airlines to create a predilection of passengers for paid meals with exhaustive menus.
With the drumbeat of digitalization, airline create synergies with software firms for developing pre-ordering systems for the added value of ‘convenience’ in their features list for passengers. Sensing the growth potential of the in-flight catering services market, Transparency Market Research (TMR), in its recent report, offers precise demand forecasting for the period of 2019-2027, which incites the strategic thinking of stakeholders and navigates them towards business expansion.
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Assessing the Evolution of the In-flight Catering Services Market
The in-flight catering services market has been spectating continuous transmutation, given the influence of macro trends – growing spread of urban sprawl and globalization – as well as micro trends – increasing expectations of passengers for high-quality food on-board. As per the findings of our seasoned analysts, the in-flight catering services market registered a value of ~ US$ 18 billion in 2018, and is likely to record a CAGR of ~ 5% during the forecast period.
With the increase in air traffic, airline companies are likely to witness incremental growth opportunities in the coming years. As a result of increasing rates of rail and road transportation, coupled with demanding lifestyles, ‘time’ becomes a crucial factor for passengers who opt for air travel, which has expanded the current scope of operation for in-flight catering service providers.
Currently witnessing a phase of dawn, the on-demand business model has been advancing towards a phase of disruption, and has taken in-flight catering services by storm by offering utmost convenience to passengers for pre-ordering a meal of their choice from the options available. However, lack of diversity of food choices remains a key challenge for airlines and catering companies to tackle, in order to attract high volume sales.
Europe to Propel the Lucrative Movement of the In-flight Catering Services Market
As airlines are under constant cost-cutting pressure, the quality of catering service and food remains of paramount importance, since it directly narrows down to an enhanced flight experience. This has incited a rise in the number of hotel-airline partnerships, on account of which, outsourced catering services have been finding huge appreciation in the airline industry. Currently, outsourced catering services occupy ~ 48% of the in-flight catering services market. However, small caterers have been spectating exponential improvements in their employment rates, as they align with the cost-cutting ideology of airline companies.
Since the quality of food makes or breaks a catering company’s brand image, the large demography of health-driven individuals and a drastic shift towards balanced diets are likely to catapult the drive of the European in-flight catering services market into lucrative lanes. However, the impressive scramble of the market in Asia Pacific can be attributed to high growth achieved by the aviation industry in the region, coupled with the widening air traveler base in the region.
Given the surge in tourism activities, business events, and global connectivity, long-haul flights are likely to remain the key revenue-generating pocket for the in-flight catering services market. In addition, increasing number of non-stop flights – as a robust strategy for airline business expansion – is likely to bring an epochal scale of transformation in the in-flight catering services market, with increased competition intensity.
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Winning Strategies to Record New Business Highs in the In-flight Catering Services Market
Limited availability of food options and high costs are the key challenges that hold passengers back from spending on food during air travel. However, as diversity drives consumer attention and retention, service providers can focus on diversified and well-balanced menus to attract a large passenger base.
A majority of airline companies serve only fast food items such as sandwiches, toast, noodles, etc., which could fail to meet the expectations of health-conscious passengers. Besides, consumers all across the world are fast responding to the emerging trends of veganism, which surfaces an opportunity for service providers to differentiate their offerings with vegan food options to be able to cater to a wide pool of passengers.
Though the main course remains a preferred meal for long-haul air travelers, breakfast food caters to both, short-haul and long-haul airlines, thereby contributing exponentially to the in-flight catering services market. Service providers can capitalize on passengers’ predilection for breakfast by bringing some variation in taste, offering food and beverage combos, and cutting down the price of these meals.
In-flight Catering Services Market Operating Under a Degree of Fragmentation
Global and regional players have loyal client bases, which fuels up the intensity level of the competition prevailing in the in-flight catering landscape. These players encounter a low threat of new entrants, as entry into the market calls for high capital investments.
Leading players concentrate on inorganic growth through M&A activities to sustain themselves amidst fierce competition. For instance, Dnata recently averred that it had acquired 121 Inflight Catering, which is intended at strengthening its foothold in North America. Besides, these key players expend their efforts and investments in the direction of increasing their per-day meal production capacity. For instance, LGS Sky Chefs announced the opening of a new catering facility at Murtala Mohammed International Airport in Lagos, Nigeria, which is designed to produce up to 10,000 meals a day.
Strategies of regional players are focused more on meeting the evolving needs of passengers. For instance, Flying Food Group, LLC caters to the snack products requirement of economy, business, and first class passengers, and also produces meals with customized seals of the airline company.
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