Airline Catering Services in the US Industry Market Research Report Now Available from IBISWorld

As the recession reduced a slew of economic indicators, including disposable income, airlines felt demand from consumers and businesses slip away in 2008 and 2009. To reduce costs, many airlines cut expenditures on meal catering services, which already comprised a tiny portion of their budgets. Thus, the Airline Catering Services industry has faced lower demand and stagnant growth over the past five years, even as the economic recovery helped push the industry out of the doldrums. As air travel becomes more widespread and accessible to more consumers, the industry will experience moderate growth over the coming five years. For these reasons, industry research firm IBISWorld has added a report on the Airline Catering Services industry to its growing industry report collection.

IBISWorld Market Research

The recession exacerbated already-weak growth in airline spending on catering service

Los Angeles, CA (PRWEB) June 08, 2012

According to the International Air Transport Association, catering accounted for 2.0% to 3.0% of expenditures for airlines in 2010 (most recent data available). However, this share has been declining over the past two decades as airlines increasingly cut back on discretionary expenditures in order to aid faltering profit margins. “Cutbacks have been most prominent for economy-class passenger cabin meals and snacks,” says IBISWorld Airline Catering Services industry analyst Brian Bueno. As a result, airline networks have increasingly dropped catering for shorter domestic flights. In addition to cost reduction benefits, decreased catering results in lower average weight for aircraft, which translates to higher fuel efficiency.

With limited food options on flights, the Airline Catering Services industry has been characterized by slow growth. The recession compounded the already-weak conditions, as air passenger traffic suffered another blow in 2008 and 2009. In 2009 alone, industry revenue fell 8.0% to $4.4 billion. Conditions improved marginally in 2010 and 2011, as some economic recovery led to a rebound in air travel. Over 2012, the number of passengers boarding flights in the United States for domestic and international destinations is projected to grow an additional 3.1% to 768.6 million. This total is still below a peak of 776.0 million passengers in 2007, and according to Bueno, “It represents an average annual decline of 0.2% over the five-year period.” Similarly, revenue for the Airline Catering Services industry has declined at an average annual rate of 0.1% over the period, despite some growth from 2010 through 2012. In 2012, industry revenue is expected to grow 1.8% to $4.7 billion. Major players LSG Sky Chefs, Gate Gourmet and FlyingFood Group benefit from a wide client base of major airlines and are expected to control less than half of the industry market in 2012.

Over the five years to 2017, industry growth will be aided by a more stable economic recovery, which is expected to increase air travel. From 2012 to 2017, the number of passengers boarding flights in the United States is projected to grow at a moderate pace. As a result of increasing air traffic, demand for airport catering services will likely expand. Revenue growth will be limited by ongoing cost-cutting measures by airlines; nevertheless, rising demand for premium foods for business and first-class passengers will provide growth opportunities for caterers. Over the five years to 2017, industry revenue is projected to increase at an average annual rate, including a single-year jump in 2013 alone. For more information, visit IBISWorld’s Airline Catering Services in the US industry report page.

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IBISWorld industry Report Key Topics

This industry provides food preparation and catering services for domestic flights, international flights (originating in the United States) and nonscheduled domestic flights (e.g. charter flights). Airline caterers generate revenue through the provision of full meals, beverages, snacks and other items, such as cutlery, napkins and cups.

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