Passengers sitting in the back of the airplane hate it when an airline runs out of food for sale. But airlines also hate waste, and they usually must throw out uneaten fresh food the same day. How do airlines decide how much food and drink to board? It's a delicate dance.
When passengers reach their seats on EasyJet, they may find a multi-page menu, with several food options, including a sweet chili chicken wrap, a mezze snack box, and a mini-calzone.
At £4.50 per item, or almost $6 per dish, they should be money-makers. But until recently, EasyJet had a problem: It couldn’t predict what passengers would want. And because fresh food generally has a shelf life of one day or less — after that, carriers toss it for safety reasons— this was expensive.
So EasyJet, among the only airlines with a chief data scientist, asked one of its number-crunchers to examine what items sold on what routes. Within four days, the airline learned demand for many items was far different on a 6 a.m. flight to Edinburgh than on a Friday night flight to Ibiza. But because it was stocking the wrong items on many routes, it calculated it was throwing away three fresh food items after each flight.
Multiply that by every EasyJet departure, and the airline calculates it has been wasting about 800,000 fresh food items annually, at a cost of “millions of pounds” CEO Johan Lundgren said earlier this year. But, after analyzing its sales, and creating a new algorithm to determine what to sell when, the airline is stocking fewer items that would have gone unsold, leaving more room for sure-sellers.
“Apart from the obvious cost savings in there, that also means that we can stock the trolley with things that are actually in demand,” Lundgren said in May, while tailoring “offerings aboard so we know what you want to buy from us before you knew what you wanted to buy.”
EasyJet is not the only airline taking a second look at catering. As fuel and labor costs rise, many want to throw out fewer fresh meals, and carry as few cans of soda and beer as they can, while still satisfying passenger demand. Some worry most about the added weight from extra items, which can increase fuel burn, while others fear waste.
It’s a delicate dance. Board too much, and they carry product no one wants. But board too little — or the wrong stuff — and passengers could revolt. Just ask United Airlines, which made global news earlier this year after it removed tomato juice from its flights, saying its data showed passengers had not been ordering it. It returned several months later.
“You can never get it exactly right,” said Skúli Mogensen, CEO of Wow Air, the Icelandic long-haul discount airline. “It is always going to be an averaging game based on historical data.”
For many airlines, the game is still more art than science, particularly with food for sale.
Stephen Jones, deputy CEO of Wizz Air, an EasyJet competitor, said his airline relies more on ”trial and error” than data science. That produces waste, he acknowledged, but he added it’s probably no different than what other retailers face.
“It is mostly done with high-level understanding of what demand is on different routes,” he said. “Some of our markets are much more likely to buy a sandwich than others. Some are much more likely to start the day with an alcoholic drink than others.”
Another European low-cost airline, Latvia’s Air Baltic, also uses rudimentary math to make predictions, CEO Martin Gauss said. Nothing is free for economy class passengers, so buy-on-board could be a major money-maker, its CEO said.
“There is nobody yet who has gotten that right,” Gauss said. “We are loading the wrong stuff. They wanted a sandwich. And you say, the sandwich is out, but we still have earrings and suntan cream.”
JetBlue Airways, which recently expanded fresh food sales from about two dozen routes to more than 70, records everything it sells so it can predict future provisioning, said Christopher McCloskey, director of customer experience and catering operations. But because it tosses unsold fresh food after each flight, the airline doesn’t want to board more than necessary.
“We want to decrease waste because that’s money that we have to throw out, but we have to be very careful to make sure we have enough to satisfy the majority of what customers want,” McCloskey said.
To better gauge demand, some airlines ask customers to commit before they board. In the United States, American Airlines has a pre-order system, though customers pay on the aircraft.
At Air Baltic, customers departing the airline’s hub in Riga can commit to many entrees up to an hour before departure, including Bretagne-style lamb, Greek-style fish souvlaki and Bavarian-style pork filet. Many of the meals, which come with a free glass of wine and are served first onboard, range from about 15 euros to 25 ($17-$28.50).
But not all customers plan in advance, and Gauss said he expects Air Baltic will keep trolleys. He just wants to improve how it decides what to put on each one.
“There is so much stuff being sold on board which nobody wants to buy,” Gauss said. “I do not understand why we can’t do that better. We have a project now working on optimizing. Why don’t we just sell what passengers want to buy and let them shop that whole trolley empty, and not try to sell something nobody wants to buy?”
Drinks Easier to Predict
Drink consumption can be easier to predict, especially at full-service carriers where they’re free. Most passengers will take one (or two on a longer flight), and airlines can make decent guesses about what they prefer.
At United, employees count drink cans that go on, and the drink cans that go off after each flight, so the airline can make educated guesses about what to carry, spokeswoman Rachael Rivas said.
United puts more drinks on longer flights, Rivas said, and generally works with an “ounces per passenger ratio.” It boards more orange juice, coffee and milk in the morning and more soda and alcohol in the afternoon and evening.
There can be wrinkles. United knows passengers flying to some destinations consume more of some drinks — carriers sell a lot of booze on Thursday and Friday afternoon flights to Las Vegas, for example — and varies provisioning accordingly.
To create efficiency, JetBlue prefers to standardize drink drawers, so while big airplanes carry more cans, every flight gets the same provisioning ratio based on consumption data, including four Cokes, three Diet Cokes, three Sprites, and a smattering of other beverages.
But for booze, at least, one city gets special dispensation.
“We had to add liquor to the Vegas flights,” McCloskey said. “It adds complexity but allows us to meet demand.”
JetBlue knows other markets have idiosyncrasies, too. For example, Los Angeles-bound customers drink less Coke than on other routes. But rather than mix up offerings by route, JetBlue caters enough drinks on every flight to satisfy any regional demand.
“We will get to a point with automation that will allow us to to have more route specificity but right now it is pretty constant,” McCloskey said.
Sometimes, as United learned, advanced analysis can get an airline in trouble, even the numbers suggest otherwise.
“We have a lot of data,” Linda Jojo, United’s chief digital officer, said in June at the Skift Tech Forum in Silicon Valley. “It’s a ridiculously small number of people that actually drink tomato juice on our flights.”
Weight Can Be An Issue
All retailers worry about limited shelf space and wasted product, but airlines also fear weight.
Food and drink probably doesn’t seem heavy, but it adds up. A Coke can in the United States weighs 12 ounces, or three-quarters of a pound. If an airline boards three extra cans per flight, that means it carries 2.25 pounds extra per flight.
“It matters,” Gauss said. “if you wouldn’t carry the weight, there would be fuel savings.”
In September, Wow Air’s Mogensen estimated that if his airline carries one unused can of Coke per year on every flight flown by one jet, the added cost to his fuel bill is $150. And while United has not made the calculations — or at least it is not sharing them — it recently said it could save $300,000 per year by reducing the weight of each inflight magazine by one ounce.
“I am sometimes embarrassed,” Mogensen said. “We have been so focused on growing. Now for the first time we are taking a step back and saying, how can we optimize these smaller things?”
For full-service airlines, though, it’s important not to become too fanatical about a few pounds, said Anne De Hauw, a former vice president at Gate Group, a global caterer, and now a customer experience consultant.
“I doubt six cans will make the difference against satisfying the need of the passengers,” she said.
Plus, weight isn’t the only potential big cost. Catering contracts are expensive, and sometimes airlines prefer not to do business with a facility in every city.
On some cross-country trips, JetBlue caters flights in New York for the outbound and return segments. That means the airline’s daily Airbus A321 from JFK to Denver and back usually carries 1,000 drink cans, enough for all 200 passengers on each flight to have two, with 200 cans left over.
Likewise, United, boards liquor, wine, champagne, beer, soda and juice in San Francisco for both directions of its new service to Papeete, Tahiti, so it can save money.
“Catering can be an expensive service, as well as complex,” McCloskey said. “We want to have as few catering locations as we can. I have a team that analyzes, is it cheaper to open a catering location or roundtrip product?”
Air Baltic’s Gauss also said he’s also not concerned about fuel burn. Passengers filing the 136 economy class seats on Air Baltic’s on Airbus A220-300s are a captive audience, he notes, and they should be profitable.
“You’re still making more money on the profitability for selling something on board than what your fuel burn disadvantage is,” he said. “But if you are selling the wrong stuff on board, you’re just carrying the weight and now you have no revenues from it.”
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Tags: air baltic, airline innovation, airline passenger experience, airline retail, easyjet, united airlines, wow air
Photo credit: JetBlue Airways may carry about to 1,000 drinks on its A321 aircraft so it can satisfy passengers in both directions on a transcontinental flight. JetBlue