Markets and competition


Expanding global presence through joint ventures

Despite rising passenger numbers overall, the global market volume of the airline catering market has not grown significantly over the last decade. There are two main reasons for this. One is that the network carriers in North America and Europe have cut their spending on in-flight service sharply in the face of increased competition and cost pressure. The other is that passenger numbers increased disproportionately at the low-cost carriers. The decline in mature markets has only partially been offset by the increase in passenger volumes in Asia, the Middle East and Latin America, where for cultural reasons in-flight service is still considered to be highly important. On long-haul routes too, the price pressure on catering services continues to increase.

Under these circumstances LSG Sky Chefs benefits from being present in nearly all sales markets. Gate Gourmet is its only global competitor with a presence on all continents. In addition, there is a modest number of providers with sites in one or two regions. The industry remains characterised by consolidation and expansion. In America and Europe, market share for LSG Sky Chefs is between 35 and 40 per cent, according to the company’s own calculations. The national airlines in Asia, the Middle East and Africa are increasingly interested in selling or finding partners for the catering divisions that have hitherto been wholly owned. In these markets LSG Sky Chefs is successfully developing its presence via joint venture agreements and management contracts.

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