European airline catering consolidation sends ripples through global market


The European airline catering industry has witnessed one of the biggest acquisitions in its history after the Lufthansa Group sold off its European catering operations and kitchen equipment procurement business to Gategroup.

The LSG Group, which is headquartered in Frankfurt, runs a portfolio of brands that specialise in airline and travel catering, inflight sales and onboard equipment design. Last year it was responsible for serving 719 million meals.

In addition to the LSG Group’s European catering arm, the purchase agreement extends to its lounge business, retail convenience food specialist Evertaste, the Spiriant catering equipment business and the retail outlets and operations of the Ringeltaube brand.

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The businesses concerned currently employ some 7,100 personnel and generated revenues of around EUR 1.1 billion (£$1.22 billion) last year – about a third of the LSG Group’s total revenue volume.

Spiriant is a particularly interesting operation, specialising in the design, development and sourcing of in-flight equipment such as meal service, galley equipment and foodservice commodities. It previously operated under the LSG Sky Chefs brand, but was turned into its own brand to harness its potential.

The division is focused on investing in the equipment segment and using its buying power to secure deals with suppliers.

“In Gategroup we have found a new owner for LSG’s European business which has catering as its core activity,” declared Carsten Spohr, chairman of the executive board and CEO of Deutsche Lufthansa AG. “This gives the European part of LSG far better future investment prospects and further development opportunities.”

One part of the purchase agreement consists of a long-term contract for Gategroup to cater flights at the Lufthansa Group’s Frankfurt, Munich and Zurich hubs.

For the Frankfurt and Munich operations which provide catering for Lufthansa flights, Lufthansa will retain a minority shareholding in a new joint venture company.

Mr Spohr said: This ensures a high level of job security at these locations and our customers can continue to expect the highest quality of gastronomic experience on board.”

Switzerland-based Gategroup serves more than 700 million passengers a year from over 200 operating units in over 60 countries and territories throughout every continent.

Last year it made a turnover of almost $5 billion and employed 43,000 staff.

Tags : acquisitionsairline catering
Andrew Seymour

The author Andrew Seymour

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