With most airlines still operating far below capacity due to Covid-19, inflight caterers have started to sell their foods to restaurants, schools and hotels.
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Hanoi-based Noi Bai Catering Services Joint Stock Company (NCS), Vietnam’s leading air catering company, served merely 4.6 million inflight meals in 2020, 42.5 percent down from 2019.
Its revenues fell nearly 60 percent to VND275.2 billion ($12 million), and so, after years of growing profits, the company racked up losses of more than VND38 billion.
Most airline caterers faced a similar plight last year.
To survive, NCS has started to develop new sales channels targeting customers other than just airlines. It is recruiting distributors and agents to sell breads, cakes and convenience foods to retail stores and restaurants.
It has begun to distribute milk tea to some retail stores in Hanoi. It is also selling fried pies, fried rice, sticky rice with chicken, spaghetti, and other dishes on its website called “Bep tren may” (Kitchen on the cloud).
NCS said its non-aviation revenues have soared since last September with moon cakes contributing VND3.2 billion.
In the fourth quarter of last year, it won a bid to supply meals to a chain of primary schools, which fetched it revenues of VND4.7 billion during the three months.
Its non-aviation revenues rose by more than 66 percent to VND15 billion to account for 5 percent of total revenues. The company wants to increase it this year to some 20 percent.
It plans to sell more food on the ground, and expand both direct and indirect distribution channels in the next five years.
A leading inflight catering service provider in HCMC, Vietnam Airlines Caterers, is launching new products aimed at non-aviation customers with the slogan ‘Both Cloud and Ground.’
Another inflight catering service provider, VINACS Cam Ranh in the central province of Khanh Hoa, recently decided to supply meals to hotels used for quarantine.
It also plans to supply schools, hospitals, companies, and travel agencies in future.
But despite their efforts, inflight catering service providers face a big challenge because their distribution channels are limited and there is little room for growth in the retail market, insiders said.