British Airways is the latest full-service carrier to start charging for short-haul food. Is there anything to be gained for the passenger, asks Marisa Cannon.
Back in 1987, former American Airlines boss Robert Crandall worked out a way to save the carrier US$40,000 every year, simply by removing the olive from each salad that was served on board. At 20 cents apiece, the garnish went down in history as one of the most marginal, yet effective cuts to save an airline money.
Crandall’s cost-cutting techniques are just as relevant today. While recessions and low passenger counts plagued airlines in the 1990s, the past 20 years have presented the industry with a different set of challenges.
In Europe, many of these have come from budget carriers, the growing networks and low fares of which have seized 40 per cent of the short-haul market. To compete, full-service airlines have begun charging for “perks” once included in the cost of a ticket, such as seat allocation, checked baggage and, now, meals.
In September, British Airways announced that it would axe its short-haul meal service for economy class passengers. Instead, it will partner with Marks and Spencer on its new buy-on-board menu, set to launch in January.
The decision has disgruntled many – in our online poll, 55 per cent of readers said the airline was wrong to introduce the policy. The change is not expected to affect the price of tickets either (read our September interview with BA chairman and CEO Alex Cruz).
No more free lunches?
Full-service carriers in the US have been charging for food for years. Deregulation in the 1980s meant that airlines had to get aggressive on price, and one way of doing this was by charging for additional services. By the early 2000s, United, Delta and American Airlines had all trialled buy-on-board menus on their domestic flights.
Dan McKone, head of travel and transportation at consultancy LEK, says that buy-on-board is part of a much larger ancillary revenue movement among airlines. “Low-cost carriers were the first to embrace ancillaries but over the past decade, it has come to legacy carriers,” he says. “United was the first to launch bag fees in the US, but this was part of a much larger ‘Travel Options’ programme that it introduced over time.”
Travel Options is part of a trend for “a la carte” pricing among some airlines, which allows passengers to opt for chargeable extras on top of a basic fare. Other North American carriers have followed suit – Air Canada has a version that offers four fare options covering various sets of add-ons, such as priority boarding, additional air miles and an onboard meal voucher. In 2015, Delta rolled out five different categories of ticket, from Basic Economy to the business class Delta One fare. American Airlines had a similar bundle system but has just discontinued it in favour of a system of customisable add-ons.
Back in Europe, Irish airline Aer Lingus has charged for food and drink on its European economy flights since 2003. “The reason was simple – only some customers wished to eat on board and others didn’t wish to pay for it,” says Declan Kearney, its director of communications. “Yes, it was a cost issue but it was equally a customer preference issue in that the product offering was no longer relevant.”
Low-cost carriers have an edge in that they know what a large part of the market is and isn’t willing to pay for. Kearney says Aer Lingus had to respond to the success of budget rivals such as Ryanair, which has tried to buy the flag carrier three times since 2006.
“We radically reduced our cost base to provide attractive fares that were relevant to the market,” he says. “We differentiated ourselves from Ryanair in that we provided better service, central airports, assigned seating and other features but the blanket provision of meals on board flights of one to three hours was not something that customers said they wanted or were willing to pay a fare premium for.”
Despite this, some full-service airlines see in-flight catering as an opportunity to build brand loyalty with customers. Andreas Koster, senior director of sales at Lufthansa for the UK, Ireland and Iceland, says: “The Lufthansa product includes all food and drink within the cost of the ticket and we have no plans to change this. We see the full-service offering as a positive investment in customer satisfaction and retention.”
According to BA’s Cruz, it’s difficult to compete on choice and quality in economy without charging. “We could have spent more money and increased the amount of food on board but the logistics and cost behind it would have become prohibitive and completely uncompetitive,” he said.
Setting aside the matter of cost, you may find the variety of buy-on-board menus preferable to a free bag of nuts or pretzels. On flights over 900 miles, Delta Air Lines’ Flight Fuel menu offers a fruit and cheese plate, Starbucks coffee and wraps from health-oriented brand Luvo, which are under 500 calories and have limited salt and sugars. Air Baltic allows you to “create your own tray” by
pre-ordering from a selection of 70 small dishes, including Latvian-style chicken breast, salmon teriyaki, and a cheese and cured meats breakfast platter.
Food waste is one issue that the buy-on-board model is able to handle more effectively because airlines can forecast demand for products based on the profile of each flight. Certain flights will sell more items than others depending on the sector, the time of day and whether it is a business or leisure route, and the flight can be stocked accordingly.
As a source of revenue, buy-on-board is an example of companies developing “product edges” – ways to monetise services that already exist within the business. McKone says: “Buy-on-board allows airlines to fulfil this customer need only for the segment of customers that requires it. We have seen increases in both airline profit and passenger satisfaction resulting from opt-in enhancements like buy-on-board.”
Airlines today have their work cut out to turn a profit and, despite the initial unpopularity, buy-on-board might be one of the few ways that traditional carriers can gain a competitive edge. As more and more of them adopt the policy, it’s likely that travellers will get used to expecting it on every flight.
Who serves what
- Yatekomo chicken noodles (€3.50);
- Jerez consommé (€2.50)
Sandwiches and tapas:
- Cured pork loin with breadsticks (€6.50)
- croissant with egg, cheese and salad (€6.50)
- Spanish sausage with breadsticks (€3.50)
- cheese and turkey ham toasted sandwich (€5.50)
- Arnegui rioja (€5)
- Cava Anna Codorniu Brut (€6.50)
- Maestra beer (€4)
- Gin Mare and tonic (€11.50)
DELTA AIR LINES
- Mesquite-smoked turkey combo ($10)
- Luvo southwest grilled chicken wrap ($9.99)
- honey maple turkey breakfast ($8.49)
- Fruit and cheese platter ($8.49)
- tapas box with Calbee Harvest Snaps Snapea crisps, Pick Pocket hummus dips, Quinoa Queen with pepper dip, Madi K’s almonds and Endangered Species dark chocolate ($8.99)
- Crave snack box including Nabisco Original wheat thins,
Cheez-It crackers, Hormel hard salami, cheddar cheese spread, Skittles and Tic Tac mints ($7.99)
- Bombay Sapphire gin, Canadian Club Reserve whisky, Dewar’s Scotch ($8)
- pink martini, margarita ($8)
- Blue Moon and Samuel Adams beer (£$7)
- Wente Vineyards wines ($8)
- Yogurt with berry compôte and granola (£1.95)
- fruit salad (£3.10)
- Aberdeen Angus beef and red onion chutney bloomer (£4.75)
- bacon roll (£4.75)
- cheddar cheese ploughman’s (£3)
- Sea salt and balsamic vinegar hand-cooked crisps (£1)
- wasabi peas (£1.60)
- Oriental snack mix (£2)
- superfruit, nut and seed flapjacks (£1.45)
- Percy Pig sweets (£1.85)
- chocolate pretzels and candy popcorn (£2.45)
- Bombay Sapphire gin, Johnny Walker Red whisky, Smirnoff Red vodka (£4.50)
- mixers (£1.50)
- red or white wine (£4.50)
- Prosecco Bottega Gold (£6)
- Becks lager (£4)
- Irish breakfast with sausages, bacon, black and white pudding, hash browns, grilled tomato, McCambridge brown bread, tea or coffee (€10)
- Chicken and stuffing; croque monsieur; cheese, coleslaw and rocket (€5)
- Tex-Mex nacho rice crackers and bruschetta dip, Jacob’s crackers with soft cheese, Dairy Milk bar; gluten-free multiseed crackers, hummus, mixed seeds, dried fruit and Belgian chocolate biscuit cake (€5)
- Senorio de los Llanos tempranillo, Dudley’s Stone chenin blanc (€6)
- cava (€7)
- Cork dry gin, Smirnoff vodka, Bacardi rum (€6)
- mixers (€1.50)
- The Food Doctor couscous and lentil pot (£2.70)
- Heinz tomato soup (£2.50)
- Moma porridge (£2.50)
- Hot focaccia caprese; hummus and falafel wrap; chicken Caesar or hot bacon baguette; croque monsieur (£4.50)
- Mezze box with green olives, feta cheese and roasted red pepper dip, hummus, rosemary crackers and baklava (£4.50)
- Joe and Seph’s salted caramel popcorn (£1.80)
- Michel et Augustin cookies (£2.50)
- Absolut vodka, Jack Daniel’s, Bacardi (plus mixer, £5.60)
- Aperol spritz (£4.50)
- Magners cider (£4)
- Malbec Calvet Varietals, Paul Sapin organic sauvignon blanc (£4.50)
- half-bottle Piper-Heidsieck champagne (£16)