In-Flight Catering Services Market - Industry Analysis, Market Size, Share, Trends, Application Analysis, Growth And Forecast 2022-2027

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In-Flight Catering Services Market - Industry Analysis, Market Size, Share, Trends, Application Analysis, Growth And Forecast 2022-2027

The In-Flight Catering Services Market size is estimated to reach $25.3 billion by 2027 and it is poised to grow at a CAGR of 3.5% over the forecast period of 2022-2027.

In-Flight Catering Services Market Overview

The In-Flight Catering Services Market size is estimated to reach $25.3 billion by 2027 and it is poised to grow at a CAGR of 3.5% over the forecast period of 2022-2027. In-flight catering, sometimes known as airline catering, is a service offered by firms to passengers during air travel. In-flight catering is a significant component of the airline business, particularly for network carriers that provide long-distance service. In-flight catering services include processes such as meal design and meal planning. Catering planning and operation are critical, according to the International Air Transportation Association (IATA). During peak periods, a large-scale aircraft catering production plant can employ over 800 people to make up to 25,000 meals every day. Every day, a large international airline company's main hub can see hundreds of takeoffs and landings. Specialist airline catering services prepare these meals and usually serve them to passengers using an airline service trolley. In-flight catering is a significant component of the airline business, particularly for network carriers that provide long-distance service. The rising competition in the aviation industry to enhance the inflight dining experience and the growing number of international and domestic air passengers are some of the factors driving the In-Flight Catering Services Industry forward in the projected period of 2022-2027.

In-Flight Catering Services Market Report Coverage

The report: “In-Flight Catering Services Market Forecast (2022-2027)", by Industry ARC covers an in-depth analysis of the following segments in the In-Flight Catering Services Market.

By Flight Type- Full-Service Carriers and Low-Service Carriers.

By Food Type- Meal, Bakery & Confectionary, Beverage and Others.

By Geography- North America (U.S., Canada, Mexico), Europe (Germany, United Kingdom (U.K.), France, Italy, Spain, Russia and Rest of Europe), Asia Pacific (China, Japan India, South Korea, Australia and New Zealand and Rest of Asia Pacific), South America (Brazil, Argentina, Chile, Colombia and Rest of South America) and Rest of the World (the Middle East and Africa).

Key Takeaways

Geographically, in 2021, North America held a dominant market share. Inflight catering has seen a surge in demand for foods including yogurt, poultry, sandwiches and fresh fruits. Apart from that, the region is a big market for chocolates, bakeries and other sweets supporting the regional market growth.
The rising competition in the aviation industry to enhance the inflight dining experience and the growing number of international and domestic air passengers are some of the factors driving the In-Flight Catering Services Industry. However, the high cost of inflight catering services is the key factor impeding the In-Flight Catering Services market size growth.
A detailed analysis of strengths, weaknesses, opportunities and threats will be provided in the In-Flight Catering Services Market Report.

In-Flight Catering Services Market Segmentation Analysis- By Type

The In-Flight Catering Services market based on type can be further segmented into Full-Service Carriers and Low-Service Carriers. Full-Service Carriers held a dominant In-Flight Catering Services market share in the year 2021. Full-service carriers (FSCs) are generally international or long-haul flights. The growing trend of international travel expanded the services of an airline meal. Airlines flying on international routes are typically long-distance flights whose basic ticket price, includes various services, such as in-flight entertainment, checked baggage and meals and beverages. The seats generally have more recline than a low-cost carrier as well as more legroom. Full-service airlines offer passengers the choice of economy or business class travel and on some flights premium economy and first-class.

However, Low Service Carriers are estimated to be the fastest-growing, with a CAGR of 4.1% over the forecast period of 2022-2027. The expansion of the travel and tourism industry, increased economic activity, urbanization and rising customer preference for low-cost and non-stop carriers are the key drivers of growth. As a result, there is a growing demand for onboard catering services in order to better satisfy the needs of customers. Since various LCCs fly international routes, there is a high demand for both local and international cuisines onboard. Low-cost carriers (budget, no-frills, or discount airlines) represent a business model that lowers ticket prices by cutting costs on customer service, distribution and optimizing fleet utilization.

In-Flight Catering Services Market Segmentation Analysis- By Food Type

In-Flight Catering Services market based on the food type can be further segmented into Meal, Bakery & Confectionary, Beverage and Others. Meal held a dominant In-Flight Catering Services market share in the year 2021. Across airlines, classes and trip lengths, in-flight meals vary in quantity, quality and expense. Following proper menu design and preparation, safety precautions are implemented. Airline chefs produce meals in land-based kitchens, which are then reheated and served to passengers by flight attendants. To keep the aroma, color, flavor and look of the components, careful attention to cooking procedures is paid. In order to entice consumers, commercial airliners are also offering a variety of meals, including continental dishes. Increased adoption of ready-to-eat meals for travelers, as well as rising demand for catering services on long-haul nonstop flights, are two key factors driving growth. The major in-flight catering companies are making great efforts to serve passengers ethnically varied meals. The rising passenger demand for healthy and nutritious meals, as well as customer willingness to pay a higher premium for such meals are some factors further enhance the In-Flight Catering Services market size growth.

However, beverages are estimated to be the fastest-growing, with a CAGR of 5.9% over the forecast period of 2022-2027. Rising passenger demand for tea, coffee and healthy juices, particularly on short-haul flights, is one of the main drivers for market development. Additionally, benefits for passengers such as a diverse range of beverage alternatives ranging from juices to various forms of alcohol are fueling category expansion. In an effort to improve customer happiness, some airlines have started offering customized drinks to flight attendants. Owing to the rising number of passengers on flights, the demand for beverages surges rapidly as people need proper services in flights which gives rise to the demand for in-flight catering services industry.

In-Flight Catering Services Market Segmentation Analysis- By Geography

The In-Flight Catering Services market based on Geography can be further segmented into North America, Europe, Asia-Pacific, South America and the Rest of the World. In 2021, North America held a dominant In-Flight Catering Services market share of 39% as compared to its other counterparts. In North America, the diet of people in each state differs significantly. The dietary habits of the two largest North American countries, the United States and Canada are vastly different. The Quebec region of Canada consumes food differently than the rest of the country. Smaller African countries differ much more. As a result, carriers must plan and stock food in accordance with their routes and the region in which they operate. However, there is a growing trend toward consuming nutritious foods across the continent, particularly in the United States. More than a quarter of Americans eat fast food every day, but the figure is steadily declining. Healthy eating has gained a lot of traction. The demand for low-calorie meals has resulted in a substantial shift in the food options available on planes. The FAA (Federal Aviation Administration) awarded USD 495 million in airport infrastructure grants in June 2019, the second tranche of the total USD 3.18 billion Airport Improvement Program (AIP). These forthcoming developments should help satisfy increased passenger demand and therefore enhance the regional market growth.

In-Flight Catering Services Market Drivers

The Rising Competition in the Aviation Industry to Enhance the Inflight Dining Experience has Readily Aided the Market Growth.

As airline competition heats up, several strategies are being implemented to improve the in-flight meal experience. These strategies cover everything from ordering to providing food. Additionally, to comply with hybrid operational scenarios while delivering service to consumers, airlines are utilizing distinct service strategies for different classes on the same aircraft. For example, while delivering high-level amenities at a premium price to high-value clients (in business class and first-class), airlines are simultaneously providing lower-cost alternatives to economy-class passengers, resulting in tier-based complimentary onboard services. Airlines are offering passengers meal pre-selection, meal pre-order and hybrid buy-on-board/complimentary catering choices to make buying food easier for them. Consumer confidence in inflight food services has also risen as a result of the availability of pre-ordering meals. Pre-orders are on the rise, owing to the availability of 'free' pre-order programs for business class and premium economy passengers. According to the International Air Transport Association, the air industry growing at a rate of 40% in 2021. These factors are rising the demand for catering services in flights which further roses the market growth.

The Growing Number of International and Domestic Air Travelling Gives Rise to the Demand for In-Flight Catering Services Market.

According to the International Flight Transport Association (IATA), the global aviation industry's international and domestic air traffic has expanded significantly in recent years, resulting in increased operational earnings and overall net profits for carriers. The growing number of people opting for air travel is likely to increase demand for in-flight catering services, resulting in the in-flight catering market growth during the forecast period. According to the International Air Transport Association (IATA), more than 7 billion passengers would choose air travel by the end of 2036, an increase of 3.6 percent year over year. In order to attract more passengers and grow their business, airline catering service companies are focusing on improving the customer service quality. This aspect is predicted to drive demand for various in-flight culinary services, resulting in the market growth over the assessment period. Leading airlines throughout the world are employing innovative technologies to improve their in-flight catering services while also introducing new food options that respond to client tastes further driving service demand.

In-Flight Catering Services Market Challenges

The High Cost of Airline Meals is impeding the market growth.

Airline meals are expensive owing to the factors like running an airport store is an expensive affair. Retailers have to pay higher rent and added costs for their operations. To cover this cost and make their business profitable, store owners have to resort to increments in the prices of the products. Airports are located at some distance from the center of the city. So, to get the workforce to the airport, businesses have to cover part of their daily travel and offer more pay than the usual stores. Additionally, the workforce has to undergo special training programs to be ready to service the demand efficiently. The airport employees have to go through daily pass background checks and be trained in security measures as well. All this adds up to the operational cost of the business and results in the product price surge. According to various surveys, an economy-class meal costs an airline about $4 and a business-class meal ranges from $25 to $30. First-class meals can cost upward of $100 which is costly. Owing to such factors, many people are not able to afford meals in the airline which hampers the market growth.

In-Flight Catering Services Industry Outlook

Product launches, mergers and acquisitions, joint ventures and geographical expansions are key strategies adopted by players in the In-Flight Catering Services Market. The top 10- In-Flight Catering Services Market companies are-

Gategroup
LSG Sky Chefs
Sats Ltd.
Cathay Pacific Catering Services Ltd.
The Emirates Group
Newrest Group Services SAS
InterGlobe Aviation Ltd.
ANA Catering Services Co. Ltd.
Royal Holdings
LSG Group

Recent Developments

In March 2022, Newrest announced that the company began providing hot meal services on two-class flights of Air Transat from various countries across Europe like Belgium, England, France, the Netherlands, Portugal and Spain.

In November 2021, the Indian low-cost carrier IndiGo announced that it was resuming its meal services that had been suspended since the COVID-19 pandemic. The airline's announcement came after the Indian Civil Aviation Ministry allowed airlines to resume in-flight meal services on all domestic flights.

In July 2021, Gategroup signed a partnership renewal agreement with LATAM Airlines to provide inflight catering services for an additional five years. According to the agreement, gategroup will serve LATAM Airlines at 16 locations, which include two new strategic domestic locations: Bogotá, Colombia and Santiago, Chile.

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