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Airline services group dnata looking for more catering acquisitions
April 5, 2017 / 10:42 AM / 8 months ago

Airline services group dnata looking for more catering acquisitions

HAMBURG, April 5 (Reuters) - Dubai-based airline and shipping services group dnata is looking at acquisition opportunities in the Americas, Africa and Asia to make its flight catering business truly global as the industry consolidates, its divisional chief said.

“Our airline customers operate on a global basis and they’re seeking consistency,” dnata Catering Chief Executive Robin Padgett told Reuters at a trade fair in Hamburg.

“But as a service industry we’ve tended to operate almost as mom and pop operations and very few are able to give a global offering.”

He said dnata, which is part of Emirates Group and competes in flight catering with Lufthansa’s LSG and Austria’s Do&Co, had already played a part in consolidation with acquisitions such as Alpha Flight Group in 2010. The sector is now once again consolidating, driven especially by China’s HNA Group, which recently took over European firms Gate Group and Servair.

“We want to beef up and give a wider spread to our customer base,” Padgett said.

The catering industry is also grappling with more and more carriers shifting to buy-on-board options for food, forcing them to rethink strategies and invest in retail options.

Padgett said buy-on-board was now the norm for short-haul and predicted it could soon take hold on long-haul flights, especially with the increasing number of low-cost long-haul carriers.

“I think long-haul retail, if executed properly, will go down very well,” he said.

He also expects pre-order meal services will become more popular among airlines, highlighting how they give airlines more certainty in terms of revenue and lead to less waste.

In Europe, such services are already common on charter carriers but they are becoming more popular elsewhere. Ryanair has started offering a hot cooked breakfast as a pre-order option on early flights from Dublin, while Air Berlin also has a pre-order menu for economy passengers on long-haul flights on top of their standard meals.

“What we haven’t done is give a reason for pre-ordering - are you, as the customer, going to get a better deal from pre-ordering?” Padgett said. (Reporting by Victoria Bryan; Editing by Greg Mahlich)

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