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This is an archive article published on May 15, 2003

Driven by financial crisis, airlines try to please passengers with food sales

Susan Kraut might be willing to buy another $10 chicken sandwich on her next flight — but only if she can’t find her favourite $7 ...

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Susan Kraut might be willing to buy another $10 chicken sandwich on her next flight — but only if she can’t find her favourite $7 salad in the airport terminal before she boards the plane. ‘‘In a bind, I would do it,’’ said Kraut, a software analyst from Washington DC, who flies Midwest Airlines to Kansas City every six weeks and has bought sandwiches on board twice recently. ‘‘But I wouldn’t fly based on the food,’’ she said. ‘‘I buy a ticket-based on the best price. I fly for convenience.’’ Charging passengers for in-flight meals may sound like a way for cash-strapped US Airlines to restructure costs.

But analysts say the strategy is not likely to sell airline tickets and could bring on a case of indigestion for airlines at a time when they can least afford it. With the industry facing its worst financial crisis ever, most US carriers eliminated standard meal service for coach passengers on domestic flights months ago. Some airlines still offer snacks, but only on their longest coast-to-coast flights.

The experiments on certain routes allow passengers to buy breakfast, lunch, dinner or a snack for $3 to $10 — not much more than local delicatessen prices. Airlines have tested menu items from TGI Friday’s Inc, Einstein Bros and other sandwich shops — with choices such as roast beef with caramelised onions and horseradish spread, or turkey breast with fontina on focaccia bread.

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While carriers say passengers generally have praised the food trials, many airlines are facing logistical problems that would have to be resolved before in-flight food sales could become permanent. Managing inventory to meet demand and keeping track of cash collected on board are sticking points—and some consultants say airlines will have a difficult time overcoming them.

‘‘Unless an airline wants to do it on a complementary basis, it’s not going to work,’’ aviation consultant Michael Boyd of The Boyd Group said. ‘‘You’re opening yourself up to huge consumer problems.’’

America West Airlines, which began experimenting with charging for meals in January, said it is still trying to find the right balance between supply and demand.

‘‘One of the complications we found on the test is that there is a lot of variability around demand,’’ chief executive Douglas Parker said. ‘‘Same flight, same day of week, same load factors may have twice as much demand one week as the next.’’

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Having more perishable food on hand than passengers want to buy is costly for carriers. But the risk of not having enough meals for sale could make passengers unhappy—exactly what airlines want to avoid.

Balancing those risks — and deciding whether airlines or in-flight catering partners should bear the cost — is under review, several airlines said. But JP Morgan analyst Jamie Baker said affordable fares and convenient flight scheduling factor into airline ticket sales more than onboard food. ‘‘We are confident that the way to a business traveler’s wallet is not through his stomach,’’ Baker said. ‘‘All else being equal, we expect leg room to consistently trump food, and TV to consistently trump leg room. Food doesn’t enter the equation, nor do we expect it to.’’

Continental Airlines Inc is one of the few major carriers that still doesn’t charge for meals on most flights and says it does not intend to test food sales onboard. Delta Air Lines offers meals for sale on its new low-cost subsidiary, Song, but has not yet decided if it will do so on its mainline flights, spokeswoman Peggy Estes said.

A new online service, Carry-On Cuisine, is trying to fill the void by allowing passengers to place internet orders with airport restaurants that are ready for pick up when passengers arrive at the airport. For her part, Susan Kraut said she is crossing her fingers that her favourite $7 chicken and mozzarella salad with sun-dried tomatoes is available in the airport terminal before her next trip.

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‘‘$10 is a bit much,’’ she said, referring to the price of some onboard sandwiches. ‘‘It was a shame that they cut out their (free) meals. Midwest used to have such wonderful meals on the airline.’’

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