Competition shapes up in Kenya’s in-flight catering services

Nas Servair general manager Eric Rouvillois last week. He said the expected stiffer competition gives them room to prove themselves. DIANA NGILA
Nas Servair general manager Eric Rouvillois last week. He said the expected stiffer competition gives them room to prove themselves. DIANA NGILA  

They may be a joyless culinary experience to some but the small food rations served in plastic tubs and cutlery still come handy to many airline passengers.

Most air travellers have tight schedules on transit routes and having a bite while airborne is a huge convenience and relief from the hustle and bustle in restaurants with little time to spare.

Always at hand to ensure this convenience, are in-flight catering firms which strive to provide the best menu and taste to customers of contracted airlines.

For airlines operating from Nairobi, there is only one main in-flight caterer to turn to — Nairobi Airport Service (NAS) Servair, which has dominated the market for more than six decades.

This dominance could however be shaken soon following the expected entry of a player being scouted by the Kenya Airports Authority (KAA).

The KAA put up a repeat international tender on Tuesday for the development and management of an in-flight catering kitchen at the main Jomo Kenyatta International Airport (JKIA).

An initial call for bids in March flopped.

“It (the March tender) wasn’t responsive,” said Allan Muturi, KAA’s general manager for procurement and logistics. Sources say many companies tendered, including international firms with local partners, but did not meet all the requirements.

KAA is, however, optimistic of finding a qualified caterer in the next round of bids but NAS Servair will not let competition catch it flat-footed. The firm is eyeing aggressive modernisation and expansion to boost its chances in a more competitive environment.

As the main airline caterer it provides in-flight meals for airlines operating at JKIA and Moi International Airport, Mombasa, which accounts for 80 per cent of its revenues. It’s also looking at setting up operations at the Kisumu International Airport.

As a new player is expected, NAS Servair is investing in improving the quality of food, plans to cut costs and broaden its business offering from in-flight catering to other opportunities.

“Soon there will be another player; this could see us lose some of our customers. But the competition will enable us to prove to the market that we are good and competitive,” said Eric Rouvillois, NAS Servair’s general manager, in an interview at his JKIA office.

“I haven’t heard anything from KAA on who will come in.”

In March, the company invested Sh60 million in new equipment which allows the facility, based at JKIA, to use the Sous-vide method of cooking. A French method of cooking in vacuum sealed plastic pouches at controlled temperatures.

“We get returns on quality and save on yield. It also allows us to organise on projects because of the quality,” Mr Rouvillois said, adding that since the introduction of this method of cooking there are less complaints on meat quality. “The meat is juicy.”

Airlines are positive about the entry of a new player, saying it could make the cost of in-flight catering more competitive, and could lead to lower costs. “The industry would welcome another player because prices will be competitive.

We moved out of NAS because it was expensive,” said Captain Elly Aluvale, managing director of Jetlink Express.

Initially the regional airline used the caterer for its in-flight catering but now works with a local restaurant.

George Mawadri, a British Airways regional commercial manager, said they carry out audits to ensure that NAS Servair meets BA’s specifications and so far “the choice has been good.”

“They meet our specifications, which they have to follow. Maybe if we get another player in the market the prices will change,” he said during an interview during BA’s celebration of 80 years in this market, last month.

The growth of Nairobi as a regional hub attracting new airlines and the expansion of Kenya Airways have seen increased demand with 10,000 to 11,000 meals being prepared daily. In June, it increased meals by a couple of hundreds with the arrival of Korean Air.

“Our success and future is strongly linked to Kenya Airways’ expansion,” Mr Rouvillois said, adding the projection of ‘Project Mawingu’, KQ’s strategic plan to add 60 new destinations in the next 10 years, as well as new airlines coming into the market, NAS Servair is “likely to reach its full capacity” of 18,000 meals a day, in the next three to four years.

The company could either build a whole new unit or find another facility that only caters for short-haul services, which are mainly drinks and dry goods. Increased demand for NAS Servair’s services has also meant more business for local suppliers.

About 85 per cent of its purchases are made locally from companies including Farmer’s Choice, Delmonte, Brookside Dairy, Coca-Cola and EABL.

John Gethi, Brookside Dairy’s general manager, said the catering firm is an important line of their business as they supply a lot of fermented products and fresh milk.

Early this year, soft drinks maker Coca-cola opened its first canning facility in Mombasa to tap the demand for canned drinks.

In-flight catering is one of the areas the company is looking at with its 150ml cans.

The caterer’s strategy is to buy local produce that meet international standards from the parent company Servair and the airlines. A couple of months ago, the company has been working with suppliers to buy value-added produce to save on time and cost.

This has seen it buy cut fruits and vegetables for different meals as opposed to whole produce.

Despite the growth of aviation, NAS Servair is facing major challenges as airlines review their catering budgets in the search for higher yields.

In December 2011, the catering firm was caught off-guard when KQ announced it would no longer serve in-flight meals on domestic flights.

Mr Chris Karanja, KQ’s communications manage, declined to disclose how much the airline was able to save by the withdrawal but said in-flight catering accounted for about six per cent of its costs.

“Meal costs have escalated globally , and while most airlines have decided to totally ignore short sector routes of 1-2 hours, KQ still serves meals where the flight time is more than an hour,” he said. Business passengers on domestic flights enjoy meals and alcoholic drinks at the lounge, which is catered for by NAS Servair.

In its 2010/2011 financial report, the airline reiterated the subject of passenger meals, “especially out of Nairobi that has reduced from 3.6 per cent to 3.4 per cent” in a bid to reduce the average catering cost per passenger.

Though the airline and NAS did not share the costs, the caterer pointed out that the cost per meal depends on the type of meal and service. It costs more to cater for the high-yield cabins — first and business classes.

Elaborate menu

It costs anything from Sh4,000 to 5,000 per meal, said Mr Rouvillois, adding that Swiss Airlines has the most elaborate menu. Other than KQ, Emirates is one of its bigger clients with more than one flight out of Nairobi daily as well as KLM and British Airways.

The caterer is now working to be pro-active and anticipate market changes that could impact its business. This includes working with the airlines to offer affordable menu’s that meet their requirements and budget.

The journey from recipe to passenger’s mid-flight, through the industrial kitchen, is not just a culinary feat, it’s also a logistical nightmare.

It’s a process that must maintain supply chains, standards and quality under a variety of local conditions and to an airline’s specifications.

A lot of effort in in-flight catering is put on the logistics of getting the correct meal on the correct flight and cabin, at the right time without compromising safety.

The NAS Servair’s workers package, inspect, grill, bake and mix.

Food safety standards require all meals to be prepared on the ground, blast-chilled and refrigerated until they can be stacked on carts and loaded.

Once aboard, attendants are required to cope with convection ovens that blow hot, dry air over the food. Newer planes have steam ovens, which are better because they help keep food moist.

The piece of chicken, sauce and steamed vegetables served have to meet a specific weight. Increased weight means spending more on fuel, which operators are fighting to keep within check in cost-cutting.

More opportunities

Started in 1949 in a wooden shack, NAS Servair today sits on Mankuli Avenue at JKIA in a building that was opened by President Jomo Kenyatta in March 1977.

Equipped with the latest technology and new equipment, it is where meals are prepared every day and sealed. The company has a staffing of 960 in Nairobi and 130 in Mombasa working in three shifts daily.

In October 2010, Servair acquired 59 per cent of NAS from the Kenyan investors led by the family of former Central Bank governor Philip Ndegwa, in a deal estimated to be worth Sh2.2 billion.

The Kenyan investors now own 26 per cent while NSE-listed investment firm Centum increased its stake from nine per cent to 15 per cent last year.

Serviar is the third largest catering company in the world and a subsidiary of Air France-KLM, which owns 26.73 per cent of Kenya Airways, with a turnover of €797 million.

Air France is said to be exploring to sell a stake in Servair.

Servair is the biggest in-flight caterers in Africa, with a strong foothold in West Africa and is looking for more opportunities in East Africa.