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Travel Trends: Airlines spending less on food in 2010, but are healthier options around the corner?
Given the harsh economic conditions in the airline industry and the hyper-competitive market, it's not surprising to find that the top US airlines have cut back the average amount of money spent on passenger meals.
According to the US Government's Department of Transportation, from a high of almost $6 per person in 1991, to an average cost of $3.58 per passenger in 2009, the costs per person for food expenses has decreased by roughly $2.60. (NOTE: the chart above shows a forecasted figure of only $3.07 per passenger in 2010 -- which would be an all-time low.)
Of course, not all airlines are created equal. Some pay a little more per passenger for food, like Alaska Air, while others invest next to nothing (we're looking at you, Southwest). However, while not all carriers are the same, they all face the same challenge – how to manage food and service costs while at the same time giving customers what they want.
In the last few years, some carriers have been actively trying to change their airline food service while others are touting a low cost, no-frills approach; this partially explains the wide divide among carriers and the periods where spending increases.
What's next for airline food?
Gregg Rapp, from Menu Technologies, has over twenty-five years of experience working with Casinos, the Cruise Ship Industry, and various restaurants. Rapp says:
How we present menus and healthy foods to kids from a marketing perspective can influence how our kids perceive healthy foods. Many of the airlines list their menus in the sky magazine. They could do much with the descriptions and placement to make this more appealing to kids and adults, including using the web to create characters and branding for the value of eating healthy.
Rapp recommends reading Mindless Eating from Cornell University's Dr. Brian Wansink as an excellent way to understand how we pick up our cues on what to eat. Wansink is a Stanford Ph.D. and the director of the Cornell University Food and Brand Lab and has spent a lifetime studying hidden cues that determine how much and why people eat.
Vanessa Horwell, the Chief Visibility Officer at TravelInk'd, a PR and communications firm for the travel industry, tells us:
There are some huge developments taking place in airline food. In traditional airline foodservice, there is what is known as 'junking'. This is the wasted food from the plane which actually costs more to dispose of than the cost of the meal itself and is a significant cost/overhead burden.
As carriers look ways to reduce costs, they are looking to technology for tighter controls on inventory, and targeting their offerings to what passengers actually want. Horwell continues:
Airlines are trying to deliver higher quality foods, and trying to shun the image of nondescript foods packaged in plastic containers. There is a lot of innovation through partnering with the restaurant industry and carriers teaming up with restaurant chains and chefs to "co-brand" their menus. This in turn has great appeal to a traveling public that is already familiar with a food or restaurant brand and can expect quality and consistency; an example is Air Canada where they serve Quiznos. It is a familiar brand and there is consistency across their network. Customers can now order their food vouchers directly in the booking path with their flight, and savvy airlines will be marketing their "celebrity chef" branded content at that time to encourage customers to book and order food ahead of time.
Airline food gets healthier, salads leading the way
Recently, Tom Douramakos, chief executive of GuestLogix, a company based in Toronto that makes the hand-held devices and software used by most North American carriers for in-flight sales, said carriers generated a net profit of only 5 or 10 cents on a $10 sale of in-flight food.
Douramakos's Executive VP of Global Sales Brett Proud, tells Gadling, "Hand-held devices and software are making a huge difference with airline costs and customer service in the airline food industry."
GuestLogix first started in 2006 by working with American Airlines. They used 3000 hand-held devices to use as a cash register on board, while also using the software behind the scenes to help the airlines provision the right products for each specific flight as a response to a changing trend. Since then, they have developed long term contracts with many of the domestic, European and Asian carriers.
Proud says, "About 8 or 9 years ago, services such as food, baggage, and even drinks were included in the price of a ticket, but in the last decade or so, the model has changed and the service package has become unbundled. Things like food, entertainment, and baggage are being billed separately."
For the carriers that offer them, the top-selling item on board, is always some type of salad.
Those carriers in the top 10th of their service group are making roughly $.70 – .90 more per passenger
Currently, the Benchmarked Food product mix is about 42% fresh food items and 58% snacks, with a trend moving towards the healthier items.
By managing wastes and improving forecasting, airlines can afford to offer better quality, which is right in line with the feedback customers are giving them -- they don't want peanuts or cookies, they want a reasonably-priced healthy salad, a fresh sandwich or cheese and cracker platter.
Of the current GXI airlines, the top 10th Percentile Product Mix is 15% fresh food and 85% snacks.
The impetus to change can be seen in the last pie chart, indicating that of the 15% of the current top 10th percentile product mix, fresh food sales make up 85% of total revenues.
Today, globally, against all on-board revenues, junking costs are running 2% to 7%, making a great case for better provisioning, better in-flight cost management (where attendants can reduce prices later in the day to keep product moving), and offering the right mix of products, preferably pre-ordered that customers want.
This airline travel trend may show an increase in cost but also an increase in quality, service and more healthy options.
Data Sources:
CNN, Michelle Obama Obesity Campaign, 2/9/2010
GuestLogix
In Flight Food Tries to be Tasty"
Menu Technologies
Bureau of Transportation Statistics, Form 41 Financials
See more Travel Trends.
Filed under: Business, Food and Drink, Airlines, Budget Travel, Travel Health
Reader Comments (Page 1 of 1)
Lydiacanaan Apr 30th 2010 3:14AM
Thanks for all your great posts. I will keep an eye on your blog as usual~~
Hotel Elaphusa Bol
Adrian Childers Apr 30th 2010 6:09PM
Airline ticket prices should not include the cost of those terrible tv dinners that nobody wants. This gives them the opportunity to sell a ticket for less. If someone wants to order a meal in flight, they can pay for it. That way the airlines can offer more meals options and not be pressured to keep costs low.
Seems like a common sense solution. I hear Virgin has been offering this since they started. Really need to go on one of those flights.
Megs May 1st 2010 2:14PM
I was delighted to see salads mentioned in the 'new' menu"s.
I fly on occasion to Amsterdam from Seattle. I do enjoy the salads (although) a little more dressing would be appreciated. The crackers and cheese they serve are delicious. If they cut all the snacks before and after the 'dinner' - they could save big $$$$. People do not or (should) not be eating all those extra's any way. I feel all this snacking is done to belay the tedium of the flight.
A really good salad, with the crackers and cheese and perhaps some fruit should hold even the most notorious eaters. Bring candy or chips on board yourself if you are junk food addict! This is for N.W. Airlines - love your flights..
sam May 1st 2010 4:56PM
"how we pick up our queues on what to eat"
Unbelieveable. Is everyone in the whole damned world illiterate or is it...like illegals...the illiterate ones will work for less?
The word is CUE...queues is a line of people waiting to get into a movie or theatre or restaurant...CUE means an indication of what is to be done.
rochemat May 1st 2010 5:19PM
LOLOLOLOL...you are so right!!! Most of the people who write these articles have no clue as to spelling or grammar, and forget about EDITING and PROOFREADING. The real problem is that if you see something misspelled enough times or the incorrect word is used, you begin to think it's right. As for airplane food, I usually refuse it because it is refuse. I'd just as soon munch on some cheez-its, or goldfish and hope that some little peckerhead whose parent(s) thinks his/her little darling is perfect, and therefore doesn't pay attention to them doesn't kick the back of my seat on a 5+ hour flight!!.
publicx May 1st 2010 5:44PM
I know. The moronic misspellings and ignorant rants abounding are enough to make one retch!!!!!
Larry Caldwell May 1st 2010 5:11PM
"Take Your Protein Pills and Put Your Helmet On----"
sam May 1st 2010 5:33PM
rochemat ...ahh a kindred spirit. Reading some of this nonsense makes me wonder why I went into debt for college loans! But you are correct that if someone sees something in print they assume it is correct. That is why we have yahoos saying "she can just call myself"....uggggg
publicx May 1st 2010 5:45PM
I've never understood how many people can't seem to survive a five hour flight without stuffing some garbage airline food in their craw. OK, maybe a few people couldn't get anything at all to eat in their transit but with today's connection times one could find some sort of airport swill to dine on between flights. Granted it's all overpriced but if you can't swing $20.00 or so for food and drink maybe you need to be on Greyhound.
L. W. Frank, P.E, May 1st 2010 5:42PM
This is a long message, but I travel a lot, and I've thought about it a lot; herewith some of my thoughts/observations.
With the notable exception of Southwest, the airlines really don't seem to want to approach their business models rationally. Continuing to stare at increasing fees and reducing costs, without looking at how to provide more attractive inducements to fly (and how their measures are doing exactly the opposite, is surely driving people to consider other alternatives. The airline industry is not necessarily a "zero-sum" game,
For myself, as obscenely expensive as it is, I would sooner eat in most airports, than pay anything extra for the sort of food that is usually served on a plane. Which reminds me; sometimes we "cattle", in the rear of the aircrafts, get atrociously poor, and sometimes downright rude, service. Who wants a beverage a half hour after you got the sandwich? And even a free "snarl" is not a bargain. Just give me the free peanuts - or don't; it's okay either way.
It is probably obvious that it takes a while to drive to anywhere, but that it is inevitably much cheaper to drive, than to fly. For myself, again; I like to drive, so I always add up the time it would take to drive to the airport, to get parked and in to the terminal; to be at the check-in counter at least 45 minutes before flight time, because I find it is not much of a delay, and a lot more convenient, to always check my bag (I want a comparison based on what I actually do - 2 or 3 hours is ridiculous, and this "45 minutes" did fail me once, because of an airline that closed the check-in activity 40 minutes before scheduled "push-back", instead of the usual 30, and my bag contained several items I could not carry into the aircraft cabin); probable delay getting into the air - though I generally trust the posted ETA, estimated time of arrival; time to de-plane and pick up luggage, and to get through the car rental, and drive to my destination and, in some cases, wait until they are open for business, or until my appointment time.
In every case, a 5-hour drive, and in some cases as much as 6-1/2 hours of driving (8 hours, from Pacific Grove to San Diego, has become a "break-even"), takes no longer, "portal-to-portal"; and always has the advantages that; I can leave "my portal" when I want to; travel in the comfort (no screaming infants with ear-aches, no adjacent passengers overflowing into my space, no loud self-important idiots arguing baseball or their latest magnificent technology or conquest) of my own car; make a more comfortable pit stop if I need to, eat and drink according to my own preferences (and at less cost), instead of airport/airline food; and arrive at the "destination portal" at a time that is practical for me; all for very much less money, and with much less stress along the way.
Another aspect is the baggage fees. I wonder how they analyze the cost per bag, or the cost per pound, of luggage; how they evaluate the time, materials and manpower costs of handling "checked-in" baggage; versus the delays and other problems that go with "hand-carried", some of which is actually "on wheels" and requires a healthy male to lift it into the overhead. There are standards for "hand-carried"; if they aggressively enforced those, it would speed loading and de-planing times, and would also better regulate the weight and its distribution in the aircraft. (SFO (San Francisco) used to have aluminum profile plates on their x-ray scanners; if the bag or package didn't pass through, you were required to return to check-in; a form of this activity can still be accomplished, as some airlines do, at the boarding ramp (this is one place where some airlines have figured out how to ease some of the pressure both passengers and overhead racks).
No question that our knee-jerk, lock-step, one-size-fits-all approach to airport security, using near-minimum wage, sometimes anti-social, personnel, creates often-unnecessary delays, and has introduced another "Joker" into the game; and that IS a valid problem for the airlines.
Europe has had this problem since 1972, and european security measures still leave people feeling like human beings; we Aamericans are closing on 10 years since the advent of Homeland Security and TSA, and are still continuing to find new ways to de-humanize passengers.
Even 10 years ago, before 9/11, I observed that, in the U. S., economy passengers are treated like cattle; in Canada, like human beings; and in Europe, like valued customers.
Instead of hiding behind "security regulations", airlines could do quite a lot to minimize the burden on the travelers, to make flying a more attractive alternative, and to better attract the passengers they need to be profitable. After all, they did manage to pass most of the cost of security back to the Federal government, and thus to us taxpayers and potential customers; the least they could do is be polite (which, in my experience, is most obviously a problem with Delta Airlines employees).
Finally; as to the comment, "Southwest, I'm looking at you"; you should look more closely. Southwest has never had to lay off people, and has made a profit every quarter, right through this recession. They must be doing quite a lot "right"; more power (and more passengers) to them!
Think about the airlines that have merged or have disappeared altogether - Eastern, PanAm, TWA, Northwestern, and more. Seems to me that the airlines could stand to sit down (together, but short of "collusion"), recognize that air travel need not be a "zero-sum" industry; and talk about independently putting together attractive flight packages, at reasonable-profit-inducing competitive rates, at what would necessarily be higher prices; that would be profitable, but which might just justify those "Thanks for Flying" banners we see in so many airports. Frankly, that banner does not generate any "warm and fuzzy" feelings in me.
What industries in this country often do, is go to the Government to get what they call "a level playing field". You may recall that the Government recently issued a limit on the amount of time that passengers of ANY airline could be forced to remain on board a plane that was not going anywhere - pretty feeble, when you think about what it took, which was several instances of folks being held on a plane for as long as 24 hours.
But such further rules or legislation might define luggage weight and size limits, regulations against deceptive pricing, that fails to include "airport taxes", "luggage fees" both checked-in and carry-on, "seat locator fees", the weight, or girth, at which it becomes appropriate to charge for two seats, maximum check-in time offsets, etc. They might even convince the Government to do something o improve security requirements, which still differ substantially from airport to airport, and are further applied differently, airline-to-airline.
Sandra May 1st 2010 6:35PM
Passenger meal? Where do you get a passenger meal ???
Marianne May 1st 2010 6:58PM
I think you meant "pick up cues" - not "pick up queues"
SAL May 1st 2010 7:20PM
You're kidding right?? I have been flying cross country 3 times a year and I have NEVER in the last 5 years gotten served food of any kind! Even the pretzels you get are skimpy. The only ones that benefit from this service are the 1st class passengers and with roughly 20 seats in 1st class how can they say they are spending an average of $3+ per passenger??
SAL May 1st 2010 7:23PM
They must take the total cost and divide that by the TOTAL number of passengers on the entire plane.
Frank May 1st 2010 7:36PM
Wow Mr. Frank....I thought for a moment that you had set out to write another one of those James Michener tomes....LOL. Actually the BEST airline food is with Lufthansa, first class. I've traveled quite a bit and so far they're the best. The food cart never stops rolling and the food is well prepared. I halfway expect them to roll out a roast suckling pig at some point for a luau with hula girls. Now I'm going to stop lest someone accuse me of rewriting "War and Peace"....LOL