To recoup billions in revenue the global aviation sector has lost during the pandemic, some airlines have turned to pop-up restaurants on the tarmac, selling merchandise, snack trolleys and even in-flight meals to stay afloat.
- Photos of Virgin Australia offering two-minute noodles to business class customers hit social media in October
- Experts say the bungle is indicative of how expensive it is for an airline to offer free food and drink
- Some airlines may strip back what a ticket includes and begin charging for luggage, a seat, wifi, and food and drink
Since March, airlines around the world have halted the vast majority of their international and domestic flights.
The International Air Transport Association (IATA) in late October said total industry revenues in 2021 are expected to be down 46 per cent compared to the 2019 figure of $US838 billion ($1154 billion).
Its previous analysis was for 2021 revenues to be down about 29 per cent compared to 2019, based on expectations for a demand recovery commencing in the fourth quarter of 2020.
But recovery has been delayed due to new COVID-19 outbreaks, and government mandated travel restrictions including border closings and quarantine measures.
IATA says airlines will need to significantly cut down costs.
One way airlines have been doing this is by selling merchandise and even in-flight meals.
Snap Fresh, which supplies meals to Qantas, sold 30,000 in-flight meals direct to nostalgic travellers in just a few weeks.
Singapore Airlines launched pop-up restaurants on grounded A380 airbuses.
It has been offering seats in economy and business class where diners pay a few hundred dollars to pass through security at the airport then sit on a grounded plane for a few hours eating traditional in-flight meals and watching movies on the back of their seat.
Airline caterers hit hard, travellers get two-minute noodles
Transport Workers Union national secretary Michael Kaine said airline caterers had “been hit hard since the pandemic with thousands of experienced workers stood down since March”.
Mr Kaine said Dnata, which supplies inflight catering to Qantas and is one of the biggest airline caterers in Australia, had already stood down 1,000 staff because the company is not eligible for JobKeeper.
“The loss of thousands of airline caterers will have a devastating impact on the ability of the aviation industry to bounce back when restrictions are lifted,” he said.
Troy Sarina, a senior lecturer at Macquarie Business School, said the airlines were taking an “novel approach” to try and keep people employed.
“The latest thing I’ve seen is Qantas auctioned off their food trolleys from retired 747 planes with all the snacks and small bottles of alcohol in them,” Dr Sarina said.
“There was an online auction and they sold within minutes.”
But the flip-side of the fun hit social media in mid-October when photos were posted of Virgin Australia serving two-minute noodles to its business class customers.
While embarrassing for an airline that is struggling to remain viable, Dr Sarina says, it was a sign of the “incredibly challenging times” for the airline industry.
And when domestic flights resume in Australia, airlines will still be bleeding money, he says.
Neil Hansford, the chair of airline consultancy Strategic Aviation Solutions, described noodle-gate as “stupid” but was confident it was something that wouldn’t be repeated.
Virgin’s new business class menu is tipped to be released in a few weeks and Mr Hansford said noodles are very unlikely to be on it.
“The only part of the plane that’s worth having internationally is business. First class takes up too much space and costs too much,” he said.
‘If you can fill the bellies, it’s profitable’
Your bread roll, packet of butter and oily curry might not look expensive, and it’s not.
But it is costly to employ human resources to get that meal from a kitchen, to an airport, to the plane, to your seat.
“Economy catering usually costs between $10.50 and $11 per person,” Mr Hansford said.
Mr Hansford said because it was so costly to offer free food and drink, “the temptation is always there to do away with it”.
While the aviation expert does not see Qantas changing its product, other airlines might.
Regulation is the main factor keeping Australian airlines from going down the low cost road. Australian airlines offer generous conditions such as a minimum number of crew on board for safety.
And while that’s a good thing for workers, it does mean airlines will look to cut costs in other areas, Mr Hansford said.
These included limiting the amount of luggage customers can check in.
“The space underneath the plane for cargo is becoming more valuable,” Mr Hansford said.
“So there will be more emphasis on freight.
Hopping from Brisbane to Melbourne? Be prepared to pay for everything
Another area of change is a broadening of “ancillary charges”.
Mr Hansford said this was already happening in the United States with airlines such as JetBlue charging travellers to simply get on the plane and then charging separately for a seat, any luggage, wifi, food and drink.
“So if you want to sit in the first two rows on the aisle you will pay more than the middle seat, two-thirds of the way down the aircraft,” he said.
“Jetstar already has zones with different prices; emergency exits and the first seven to eight rows have a premium on them.
“So I see Jetstar further enhancing their premium for the better seats.
“I see changes in ancillary revenue but the bare-bum ticket to ride fares, no insurance, no carbon levy contribution, that will still exist.”
Mr Hansford said Virgin Australia might adopt a similar strategy where it allows economy customers pay a lower ticket price to board but then charges extra for add-ons.
Another option taken from the US that could enter Australia’s airspace is dinner boxes.
“In the US you get a dinner box and a drink at the gate and you carry it to your seat,” Mr Hansford said.
“There’s a suggestion this could happen here. Qantas Link to do this on their regional routes.
David Flynn, editor of Executive Traveller, said with Bain Capital on board he would not be surprised to see Virgin “offer a basic economy which is just a seat”.
“I would not be surprised to see Virgin drop meals completely in economy,” he said.
On the idea of dinner boxes though, he’s torn.
“It’s interesting. Aussies often look down their nose at dinner boxes,” Mr Flynn said.
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