Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 11 pages
Data source: Published sources
Share a link:
https://casecent.re/p/19873
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Abstract
In 2003, LSG Sky Chefs, a wholly-owned subsidiary of the German carrier Deutsche Lufthansa (AG), was the world leader in the airline catering industry. LSG derived its revenues from the US and international airlines that have no flight kitchens of their own. However, after the September 11 terrorist attacks, the airline industry witnessed a severe financial crisis due to the decrease in the number of passengers. This severely affected LSG Sky Chefs and other airline catering companies as many airlines cancelled complimentary meal services as part of their cost cutting strategies. Adding to the company''s woes, the severe anti-inflammatory respiratory syndrome (SARS) disease in Asia and the wars on Afghanistan and Iraq further worsened the situation. However, to come out of the slump, LSG Sky Chefs came up with new initiatives. The case details LSG''s efforts to recover from the slump in the business post 11 September, and offers scope for discussion on whether the new initiatives ''buy-on-board'' and ''in-flight cafe'' that were considered as a shift from the old paradigm where the foodservice was dictated by what airlines could afford, would yield results.
About
Abstract
In 2003, LSG Sky Chefs, a wholly-owned subsidiary of the German carrier Deutsche Lufthansa (AG), was the world leader in the airline catering industry. LSG derived its revenues from the US and international airlines that have no flight kitchens of their own. However, after the September 11 terrorist attacks, the airline industry witnessed a severe financial crisis due to the decrease in the number of passengers. This severely affected LSG Sky Chefs and other airline catering companies as many airlines cancelled complimentary meal services as part of their cost cutting strategies. Adding to the company''s woes, the severe anti-inflammatory respiratory syndrome (SARS) disease in Asia and the wars on Afghanistan and Iraq further worsened the situation. However, to come out of the slump, LSG Sky Chefs came up with new initiatives. The case details LSG''s efforts to recover from the slump in the business post 11 September, and offers scope for discussion on whether the new initiatives ''buy-on-board'' and ''in-flight cafe'' that were considered as a shift from the old paradigm where the foodservice was dictated by what airlines could afford, would yield results.