Northern Foods has won a slice of British Airways' in-flight meals business, replacing Gate Gourmet in supplying meals and sandwiches for short-haul flights from Heathrow airport.
Three years ago BA had to cancel flights when an industrial dispute at Gate Gourmet spread to BA, meaning there were no in-flight meals for passengers.
Northern, the food manufacturer, will combine with DHL, the logistics company owned by Deutsche Post, on the 10-year contract. Northern said it was delighted to have been chosen by BA "based on the quality of our food".
The move takes Northern outside its supermarket customer base for the first time. Its biggest customer is Marks and Spencer, and it also supplies other major UK food retailers with own-label products and branded products such as Fox's biscuits and Goodfella's pizzas.
Northern had hinted previously that it was looking for new "channels" aside from retailers to diversify its customer base. Analysts speculated the deal could be followed by other similar contracts. Northern's shares closed up ½p at 54¾p.
BA said it opened a tendering process 18 months ago and looked at a range of options for its in-flight catering, which supplies about 100,000 meals a day and is worth £150m a year to its suppliers. BA said it had decided on the best combination of service and logistical capability. Unlike some low-cost airlines, BA provides free catering on its flights, including the shorter ones.
DHL is already a large supplier to "airside" caterers at Heathrow and has premises at the airport. Northern plans to make the food at its existing factories and deliver it to DHL, which will assemble the trays and handle the transfer to aircraft.
Gate Gourmet has retained the long-haul portion of the contract from Heathrow, while Alpha Flight, owned by Autogrill of Italy, is keeping the business for flights from Gatwick and other UK and Irish regional airports. Gate Gourmet said it was delighted to have kept the long-haul contract, which "reinforces our position as one of the market leaders in this sector".
BA said the decision to take the short-haul business away from Gate Gourmet was not a result of the problems the airline suffered in August 2005, when an industrial dispute at the caterer led to hundreds of flights being cancelled during the holiday season. The episode was expensive for BA and upset passengers.
At the time Gate Gourmet, which had been bought by Texas Pacific Group, the private equity firm, after the collapse of its previous owner, Swissair, was facing losses from its business with BA. In the aftermath of the dispute BA extended its contract to 2010 and increased its size in order to support Gate Gourmet.
Source: Reuters
Three years ago BA had to cancel flights when an industrial dispute at Gate Gourmet spread to BA, meaning there were no in-flight meals for passengers.
Northern, the food manufacturer, will combine with DHL, the logistics company owned by Deutsche Post, on the 10-year contract. Northern said it was delighted to have been chosen by BA "based on the quality of our food".
The move takes Northern outside its supermarket customer base for the first time. Its biggest customer is Marks and Spencer, and it also supplies other major UK food retailers with own-label products and branded products such as Fox's biscuits and Goodfella's pizzas.
Northern had hinted previously that it was looking for new "channels" aside from retailers to diversify its customer base. Analysts speculated the deal could be followed by other similar contracts. Northern's shares closed up ½p at 54¾p.
BA said it opened a tendering process 18 months ago and looked at a range of options for its in-flight catering, which supplies about 100,000 meals a day and is worth £150m a year to its suppliers. BA said it had decided on the best combination of service and logistical capability. Unlike some low-cost airlines, BA provides free catering on its flights, including the shorter ones.
DHL is already a large supplier to "airside" caterers at Heathrow and has premises at the airport. Northern plans to make the food at its existing factories and deliver it to DHL, which will assemble the trays and handle the transfer to aircraft.
Gate Gourmet has retained the long-haul portion of the contract from Heathrow, while Alpha Flight, owned by Autogrill of Italy, is keeping the business for flights from Gatwick and other UK and Irish regional airports. Gate Gourmet said it was delighted to have kept the long-haul contract, which "reinforces our position as one of the market leaders in this sector".
BA said the decision to take the short-haul business away from Gate Gourmet was not a result of the problems the airline suffered in August 2005, when an industrial dispute at the caterer led to hundreds of flights being cancelled during the holiday season. The episode was expensive for BA and upset passengers.
At the time Gate Gourmet, which had been bought by Texas Pacific Group, the private equity firm, after the collapse of its previous owner, Swissair, was facing losses from its business with BA. In the aftermath of the dispute BA extended its contract to 2010 and increased its size in order to support Gate Gourmet.
Source: Reuters
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