On any given day, roughly 100,000 flights take off and land across the globe, carrying around 4.5 billion people annually. Hundreds of thousands of meals are prepared, beverages and packaged foods are loaded in aircrafts to meet the expectations of flyers. The in-flight catering industry is projected to grow at a rate of 6.1% annually. This growth can be attributed to rising passenger traffic, long-haul flights and an enhanced focus on offering a choice of meals to passengers.
However, in-flight catering has always been a high-volume and low-margin business. There are numerous guidelines and stringent restrictions not only related to the way food is prepared but also how it is managed and delivered. In addition, the galleys have limited storage, and the weight of trolleys carrying the food is always under scrutiny.
While airlines have been identifying ways to reduce the costs of the meals without compromising the quality and experience, in-flight catering companies have been forced to innovate and identify areas to minimize waste and leverage data analytics for forecasting and informed decision-making. Research conducted by the International Air Transport Association (IATA) in 20121 estimated that 20% of cabin waste is untouched food and beverages, resulting in significant waste for the in-flight catering industry and adding to the trash disposal cost. International catering meals require special handling and disposal guidelines, which makes reusing and recycling challenging. The cost of disposal for airline waste is generally 4X the cost of recycling regular waste and, if mishandled, can lead to significant fines.
In-flight caterers are faced with the immense challenge of catering for each passenger onboard a flight without knowing the flight’s final passenger load or the meal preferences of its passengers. These uncertainties lead to excessive waste generation because in-flight caterers tend to over-produce meals to mitigate the risk of meal shortages and dissatisfied passengers.
Airlines unbundled costs and began offering customers the option to order and pay for their meals, snack boxes and beverages up until just a few hours before a flight’s departure, creating more complexities for in-flight catering companies. Last-minute additions that had to be accommodated meant in-flight catering companies had to keep buffer stock that generally resulted in waste. With IATA emphasizing zero waste, the airlines are now reviewing their contracts with the in-flight catering organizations and focusing on reducing waste, extra weight and excess costs.
In-flight catering companies can no longer postpone the critical need for digital transformation. Using technology, data and analytics, they can optimize their business processes, reduce waste and consistently meet customer expectations. Strategies for helping them optimize operations include:
- Streamlining business processes beyond production: Managing in-flight catering operations is a complex process. From developing the menu, forecasting passenger numbers and preferences and purchasing raw ingredients to producing, packaging, assembling and distributing the food, in-flight catering organizations manage various intricate activities. The number of variables that must be accounted for and considered within a short period means that precise forecasting of catering requirements can take significant time and effort. The most important is the on-time delivery of meal orders in the quantity required for each meal type. As a result, it is of utmost importance that caterers plan an effective production schedule inclusive of all steps, from sourcing to delivery.
Trolley preparation must also be considered as part of this process since food preparation needs to cater to real-time changes and available updates while also responding and adapting to aircraft preparation changes. With downstream and upstream integration between ground staff, demand management and operations, organizations can increase efficiency in their production processes.
- Predictive analytics and real-time data: The airline industry is dynamic; the aircraft type and the passenger load will determine the kind of food trollies and cutleries needed to fulfill the food and beverage in-flight service. Any variables in this process can send the entire planning process into disarray. The digitization of airlines and changing consumer preferences has led to shorter lead times and an increased frequency of changes, so relying on the accuracy of the information received even a couple of hours ago is a considerable risk. The demand is estimated based on the number of tickets already booked, but research shows that forecasting errors accounted for 53%+ of the total adjustments made before the meals were loaded.
Predictive analytics and real-time information can help in-flight catering to anticipate customer needs. Analytics-based models use events triggered in real-time to make predictions and can help adjust and reduce inefficiencies in the system.
- Usage of IoT-based devices: IoT can play a critical role in reducing human error in the entire process, from order to delivery. IoT-based devices can track any deviation in meal or tray preparation from the standard agreement with the airline. In addition, IoT can help with accurate time tracking of trays and trollies, enabling ground staff to track these assets and optimize their usage.
- Leveraging AI and ML: Enterprises must think beyond the horizon. An AI/ML-powered platform enables airlines to optimize inventory balancing algorithms that impact their overall business and market performance. It will help organizations understand their user demand, choice and preferences and add value through the entire in-flight catering operations lifecycle.
Optimizing business processes, leveraging technology and taking on an agile-dynamic approach will enable in-flight catering organizations to respond to these challenges and build sustainable operations.
Sources:
https://www.gminsights.com/industry-analysis/in-flight-catering-services-market
https://www.flightradar24.com/data/statistics
https://www.sciencedirect.com/science/article/abs/pii/S0360835221008184
