In what is yet another measure to trim its catering costs, Air India has started ferrying in-flight meals for return legs of certain international routes from Indian hubs, the airline’s Chairman and Managing Director Pradeep Singh Kharola said Wednesday. So far, Kharola said, the airline has started stocking food items for return legs on routes to Stockholm, Birmingham, Copenhagen and Madrid instead of purchasing it from local caterers at these destinations.
“The food is taken from here in India in chillers and then it is heated whenever it has to be used … Catering costs for us are around Rs 600 crore to Rs 800 crore annually. Catering in India is 3-4 times cheaper as compared to catering at these centres,” Kharola said. Over the next a few months, Air India will start serving food from India on its flights returning from the Gulf region, he added.
Certain Gulf-based carriers follow the same practice of carrying meals from their home stations even for return journeys from India. “There are some flights like the ones going to Gulf, Singapore and even some parts of Europe, where it is possible to uplift the meals here (in India). Some work is going on in that direction,” he said. “More important thing is the taste. Whatever you can do, the European caterer’s taste can’t match with the Indian caterer, especially when it comes to Indian food. That is the additional benefit we get. The main thing is that the costs come down drastically,” Kharola pointed out. The portion of the food given to passengers would remain exactly the same, he clarified. However, the Air India CMD did not disclose the amount of money saved through this step.
Further, Air India has also introduced a new system to fill up its business class seats on international sectors. The airline has also introduced a new bidding system through which a passengers booked for economy travel can upgrade their seats to the business class by paying an additional fare. “You have to bid for only the incremental amount. Whatever you have paid for the economy class ticket, you have paid … There is a cap we have put on the minimum bid one can make,” Kharola said.
Focus of AI also on increase in passenger revenue
The measure to rationalise its catering costs follows its October 2018 decision to halve the quantity of cheese carried on-board for its premium passengers on international flights resulting in savings of Rs 2.5 crore annually. Prior to that, in July 2017, Air India decided to halt serving non-vegetarian food to economy passengers on domestic flights, which it said could result in savings of Rs 10-12 crore a year. Apart from cost-cutting, the airline is also focussing on increasing its passenger revenue, which have seen a steady rise over the last one year.
The bidding system, which is being facilitated by US-based firm Optiontown, has started on flights operating to the US, Europe, Australia, Japan and Hong Kong. “People who have already booked tickets in economy class, we are giving them a chance to pay a little extra fare and come to the business class,” he explained. A person who made the bid but did not get the upgrade will get the money back, Kharola said. For different sectors, there will be different price caps on the lowest amount one can bid, he added. He said that while the bidding system may not result in seats being sold at the best possible fare, but it at least reduces the number of empty seats that fly on long-haul routes.