Airline moves hit Alpha sales
The growing trend for low-cost and short-haul airlines to swap in-flight meals for paid-for snacks has hit sales within the UK flight catering business of Alpha Airports.
The airline catering group, announcing its financial results for the 12 months to 31 January, said that sales in its UK on-board catering division had fallen by 15.8% because of the popularity of meal-free, low-cost airlines and short-haul airlines scrapping in-flight meals in a bid to cut costs.
The Middlesex-based group said that UK chartered and scheduled flight meal volumes had fallen by 13.5% during the year, with average meal spend declining by 1.4%.
The transfer of many British Airways long- and short-haul flights from Gatwick to Heathrow had also hit sales, causing an £11m decline in business at its Gatwick flight kitchen.
Although budget airlines do not include meals with their flights, most offer a trolley service for passengers to buy food, drinks and other goods. This has enabled Alpha to boost sales in its UK in-flight retail and UK retail businesses by 14.9%. In-flight retail now makes up almost 29% of all Alpha's UK flight-services business.
Total group turnover fell by 2.7% to £419.3m in the year to 31 January, compared with £430.8m for the same period a year earlier. Pre-tax profit was £20.7m, up from a loss of £6.9m in 2002. The move into the black was aided by the sale of Alpha's 25% stake in its Asian in-flight sales group.
Chairman Graham Frost said: "We finish the year as we started, with major uncertainty as regards travellers' confidence, and hence may face a short-term disruption in airline activity."
He added: "Under normal circumstances, Alpha would be well positioned to deliver growth in sales and profits in the coming year. However, given the recent start of military action in Iraq and continued concerns about terrorism, it is possible that traveller confidence and hence aviation activity could be negatively affected over the peak summer months, with a consequent impact on Alpha's business during this critical period in our financial year."
