But in-flight sales are unpredictable, leading some airlines to bargain with airports to sell food on the ground.
By STEVE HUETTEL
Published October 17, 2003
[Times photo: Chris Zuppa]
Cindy Rossetti, 8, of Naperville, Ill., eats a Burger King lunch with her family while they wait for their meal-less flight home from Tampa International on Wednesday.
America West Airlines made a splash in the airline business in January by selling a new product: brand-name food for hungry coach passengers.
Now there's a virtual deli in the sky, as most of the major airlines try to turn feeding passengers in the cheap seats into a profit center. Or at least less of a financial drain.
Delta Air Lines and US Airways, two of Tampa International Airport's biggest carriers, have moved from testing food sales into full-fledged programs. American Airlines, the world's largest carrier, began selling food at airports in New York and San Juan last month.
The offerings are hardly gourmet, but they're a far cry from the generic beef and chicken that made airline food the butt of so many jokes. They include brand names, such as T.G.I. Friday's Southwestern Cobb salad and the Tuscan Trio sandwich from Atlanta Bread Co. And they fetch prices as high as $10.
But carriers are finding the restaurant business can be as rough-and-tumble as their own troubled industry.
Most airlines won't say how many customers are buying. But the "take rate" during America West's tests ranged from 8 to 80 percent, says spokeswoman Janice Monahan. The uncertainty made it difficult to stock the right amount of food on board, so flight crews risked running out or having to throw away leftovers.
Airlines have found they can better control the inventory by selling food at the gate before passengers board the plane. But that rankles airport managers and in-terminal restaurant operators who don't appreciate the competition.
Louis Miller, executive director at Tampa International, said there's nothing he can do about the food airlines sell on their planes. And he didn't object when Delta asked to sell sandwiches and salads in its members-only Crown Room.
But Miller draws the line at the terminals, where concessionaires pay premium rents - and share revenues with the airport - for the right to sell food to travelers.
"You just don't allow someone to come in and change that," he says. "If (gate sales) are a necessary customer service, I'd find a way. But it would be through us, not the airlines."
Low-fare carriers such as Southwest Airlines always reined in costs by serving only peanuts and soft drinks. Now traditional full-service airlines, struggling through the industry's worst-ever financial slump, have severely cut back on food.
Coach customers used to count on being fed at traditional meal times. Now, most airlines serve them meals only on flights lasting about 3 hours or more, and not always then.
The top nine airlines spent an average of $3.63 per passenger on food for the three months ending June 30. That's down 70 cents (or 16 percent) from the same period last year and $1.39 (28 percent) from the quarter that ended with the Sept. 11 terrorist attacks.
The change was disastrous for airline caterers such as LSG Sky Chefs. The company, a division of Lufthansa Airlines, convinced carriers to sell their sandwiches and salads - based on recipes from brand-name restaurants - to hungry coach passengers.
It's unclear how much revenue the sales generate for airlines. But savings from cutting out free meals is substantial.
Delta now sells food on 44 long-haul flights on which it eliminated complementary coach meals. By next March, the airline will expand that to all 220 domestic flights that include meal service. The savings: an estimated $70-million to $80-million in 2004.
Passengers also benefit from the choice to buy higher quality, brand-name food on flights over 31/2 hours, said Sharon Wibben, Delta's senior vice president for in-flight service.
"It will obviously be good for us and good for our customers," she said.
Not that the customers are getting a bargain. Delta, for example, charges $8 to $10 for a sandwich, compared to $6.99 for a Southwest Turkey BLT or Ham & Cheddar sandwich at Flatbreadz, a food concession at Tampa International.
Delta is the only airline so far to try selling food both on planes and at an airport, its Cincinatti hub.
The airline initially asked to sell food from caterer Gate Gourmet at its gates, said Michael Mullaney, the airport's director of commercial and business development. Airport officials pointed out that selling food wasn't allowed under the airline's lease.
Instead, the airport knocked a hole in a wall near the gates to create a new opening to a restaurant. Delta agents tell passengers about the meals-to-go available there during gate announcements. The airline and the airport get a cut of the sales.
Similar revenue-sharing takes place at Dallas-Fort Worth International, where officials had insisted that food sales near American Airline's gates be limited to existing concessionaires. But American sells its own meals at gates in New York's John F. Kennedy International and San Juan's airport.
Anton Airfood operates a T.G.I. Friday's in the same JFK International terminal where American sells food.
"It's an irritation factor," said Bill Anton, chairman of the airport company that runs more than 150 restaurants in 24 airports. "I put in a huge investment there."
But Anton doesn't feel threatened. His employees watched the American gate at JFK one day, he said, and didn't see more than a dozen meals sold on any flight. Sales have steadily improved since the launch three weeks ago, said an American spokesman.
- Researcher John Martin contributed to this report. Steve Huettel can be reached at huettel@sptimes.com or 813 226-3384.
