Global leadership maintained in airline catering
The LSG Sky Chefs group holds the leading market position worldwide in airline catering and in all upstream and downstream in-flight service processes. According to its own calculations the company has a global market share of around 30 per cent. The group consists of 133 companies with operations at around 200 sites in 50 countries. The parent company for the group, LSG Lufthansa Service Holding AG, is based in Neu-Isenburg.
Over nearly 70 years LSG Sky Chefs has established a wide range of detailed knowledge about the management of airlines’ in-flight services. Since 1990 the company has built on the business of LSG Lufthansa Service and expanded continuously and successfully into growth markets. The breakthrough to global market leadership occurred in summer 2001 with the acquisition of Sky Chefs, a subsidiary of American Airlines, with sites in North and South America and Western Europe. After successfully restructuring the company, the focus in recent years has returned to expansion, especially in markets with high potential for the future in Asia, Eastern Europe and Africa. LSG Sky Chefs is also pursuing growth by extending its portfolio of products and services for airline customers and gradually entering adjoining markets.
Strategic steps to seize growth opportunities
Demand for airline catering has declined in the mature markets of North America and Europe over the past decade as a result of reduced in-flight services by network carriers and the growth of no-frills airlines. By contrast, most growth markets in Asia, Latin America and Africa are still characterised by greater appreciation of in-flight service. For this reason, economic crises in these regions have fewer long-term consequences for the catering
business. Altogether, however, the airlines continue to exert strong price pressure, which is exacerbated by new competitors, particularly in the less demanding segment of catering for short- and medium-haul routes.
As part of its strategy process LSG Sky Chefs reviews its positioning every year. The strategic orientation defined a few years ago still determines the company’s development today that consists of four fundamental initiatives: continuous improvement by standardising production and administrative processes, expanding existing customer relationships via additional services, initiating partnerships to extend the portfolio and enter new markets, and the pursuit of specific growth opportunities in adjoining markets, such as catering for trains, schools and healthcare facilities or sales to retailers.
The Executive Board of LSG Lufthansa Service Holding AG was added to with the appointment of Erdmann Rauer as Chief Sales Officer via a resolution passed by the Supervisory Board and with effect from 1 January 2011.
The activities in the core airline catering business were aligned with the highly diverse market conditions in the regions North America, Latin America, Europe, Germany, Emerging Markets and Asia/Pacific. They are supported by overarching centres of excellence for frozen food, in-flight sales programmes, logistics and in-flight service equipment. Over the course of 2010, centres of excellence were also set up for entry into adjoining markets.