Even as the last major airline — Continental Airlines — is ending free economy-class meals on domestic flights this fall, carriers are changing their whole approach to food.
Air Canada has introduced healthy food options, like vegetarian sandwiches and yogurt parfaits, and Alaska Airlines has a new healthy snack pack. American Airlines is working with Boston Market. JetBlue is about to start selling food on select long-haul flights. Some carriers are expected to offer combination meals and other promotions similar to those available at fast-food restaurants.
And United Airlines is testing the sale of some food items sold on domestic flights, and a variety of sandwiches, in its Red Carpet lounges at Chicago O’Hare International Airport and Los Angeles International Airport. It will also let passengers preorder in-flight food by the end of the year.
The new offerings are in large part the result of the new economics of in-flight food. Kevin Jackson, managing director of consumer marketing for US Airways, said that when airlines gave away food, “the motivation was to minimize cost.” Now that most airlines are selling food, they have an incentive, he said, to “provide better choice and quality for passengers.”
In addition, the airlines are competing with new restaurants and take-out food businesses in the airports. Executives of HMSHost and OTG Management, which operate airport food businesses, said sales were thriving, and to-go options — Wolfgang Puck Gourmet Express, California Pizza Kitchen’s stand-alone airport kiosks and Cibo Express, among them — were proliferating, particularly since the demise of free food on most domestic flights.
With many more options on the ground, most hungry travelers seem to be bringing food on board. A survey conducted by Forrester Research in the fourth quarter of 2009 found that 19 percent of leisure travelers and 21 percent of business travelers bought a meal or snack on a plane in the previous year. If a free in-flight meal was not offered, only 6 percent of travelers polled in Zagat Survey’s 2009 airlines poll said they typically purchased food on-board, but 56 percent said they bought it in the airport.
Indeed, in-flight food sales are not huge money-makers for the airlines. 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. But, he said, gross profit on sales of in-flight liquor generally can go as high as 50 to 80 percent on a $10 drink.
That may explain the growing offerings of elaborate specialty drinks on flights. These include Virgin America’s absinthe and Sprite cocktail, United Airlines’ Trader Vic’s mai tai cocktails on Hawaiian flights and a pomegranate martini served by Delta Air Lines and US Airways. Carriers continue to serve free nonalcoholic drinks on most flights.
For the most part, American airlines stopped serving free meals in economy class on domestic flights after the Sept. 11 terrorist attacks cut deeply into their profits. As airlines sought new ways to generate revenue and cut costs, food was one of the first places they looked.
Jim Compton, Continental’s executive vice president of marketing, said in an e-mail message that the airline expected that introducing in-flight food sales this fall would “add about $35 million per year to our bottom line.” According to Henry H. Harteveldt, travel analyst for Forrester Research, most of this profit will come from eliminating the cost of serving free food.
The airlines’ adoption of GuestLogix’s equipment, used by flight attendants for what are usually credit card sales of food and drinks, and to keep track of inventory, makes the sales process easier for both carriers and passengers: Airlines can monitor the popularity of items and use the information to provision flights, while travelers do not have to fumble for change and can get expense receipts for purchases.
Mr. Douramakos predicted that GuestLogix’s technology would allow airlines to offer more combination meals, including a drink, snack and sandwich or salad, an option now available on Air Canada. He said he expected carriers to distribute coupons with food or drinks bought in-flight, good for discounts on future purchases, and also to deeply discount items that remained unsold as a flight progressed. The technology, he added, will allow airlines to operate more like restaurateurs.
The question is whether all the changes in on-board food will actually influence travelers’ behavior. Richard Wong, a transportation lawyer in Washington, said he refused to buy food in-flight “because there’s nothing attractive about it” and prefers to dine on hamburgers and French fries sold by Five Guys at Ronald Reagan Washington National Airport.
On the other hand, Rob Volpe, a market researcher in San Francisco who is an elite-level participant in United Airlines’ frequent-flier program, said he was a devotee of United’s on-board food items, like a yogurt parfait and snack boxes with small portions of a variety of items. And he has purchased the parfait and a mozzarella and tomato sandwich at Red Carpet lounges.
“I’ve been buying snack boxes since they were first rolled out, and I’m always delighted to be offered something healthy,” he said. “It’s kind of a picnic in the air. It’s one less thing I have to carry on board when I have bags, and it’s something I don’t have to think about while I’m trying to get to my flight.”
However in-flight food sales change in the future, one thing will probably remain constant: Snacks like Pringles and candy will undoubtedly remain best sellers.
When there are “healthy and less healthy options,” the less healthy are always more popular, said Paul Platamone, who supplies food to airlines for LSG Sky Chefs, an in-flight catering company.
“It has to do with the travel mentality,” he said. “When you’re on the road, you become a bit more indulgent.”
By JANE L. LEVERE Published: April 12, 2010