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Wednesday, 27 June 2012 08:22

European airlines may sell catering businesses

Lufthansa, Air France-KLM, Finnair could sell food units

Some airlines may soon sell off their catering units as they focus on achieving higher margins. Buyers are likely to be attracted by such businesses’ steady cash flow, while airlines would like independent food suppliers to produce inflight meals more cheaply. Lufthansa, Air France-KLM and Finnair are among those carriers reported to be exploring selloffs of their food units, most likely to large catering companies or private equity firms. Lufthansa’s LSG Sky Chefs could go on sale as soon as September or October, one investment banker close to the airline thinks.
“Private equity has already talked to Lufthansa about the deal,” he says.
Air France’s Servair, which served ten tons of lobster and 40 tons of foie gras during 2011, may also go on sale, even though the airline made €25 million from catering during the year. Finnair's catering unit was due to be bought by LSG Sky Chefs this year, but Lufthansa's board pulled out at the end of June.
[photo courtesy LSG Sky Chefs]

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