In a bid to cut costs, United Airlines will outsource its remaining flight kitchens, handing over catering to a trio of contractors.
United Airlines Closing Flight Kitchens This Fall
Earlier this year, United Airlines warned that it was reviewing the status of its flight kitchens and studying the feasibility of outsourcing them after federal payroll support ends this autumn.
Unsurprisingly, United informed employees yesterday that it is moving ahead with plans to close its flight kitchens and will proceed with three different contractors to supply in-flight catering starting in October.
In a note to impacted employees, Mandeep Grewal, United’s Vice President of Customer Strategy & Innovation and Catering said:
“You should know that this was a decision that we put a lot of thought and consideration into – at the end of the day, we wanted to proceed in a way that allowed us to protect the vast majority of jobs for our United catering team members, and invest in solutions that significantly improve our customers’ onboard experience.”
All employees “in good standing” will be offered a job with one of the new contractors and 70% will remain under union representation. Flight and other benefits will also be maintained during the transition period.
United is the last U.S. legacy airline to operate its own flight kitchens, with ex-Continental catering facilities in Cleveland, Denver, Houston, Honolulu, and Newark.
Those will now transition to a three contractors:
- Gate Gourmet
- Denver (DEN)
- Honolulu (HNL)
- Newark (EWR)
- Sky Café
- Cleveland (CLE)
- Houston (IAH)
Passengers will be unlikely to notice a difference in catering, though Grewal’s statement that United is closing its kitchens in order to “invest in solutions that significantly improve our customers’ onboard experience” strikes me as curious.
It is no surprise that every employee was offered a job with one of the new contractors. Throughout the airline industry, contractors are struggling to fill roles left vacant during the pandemic as travel bounces back. In most cases, employees will find their position pays less and includes fewer benefits than before.
On the one hand, United Airlines cannot be blamed for trying to pay less for the same goods. This move will allow United to cut costs as it tries to return to profit. On the other hand, what a slap in the face to U.S. taxpayers, who bailed out the entire airline, including (and especially) management only to have the favor returned by laying off staff that are vital to the functioning of the airline to save a few bucks.
> Read More: United Airlines Considers Outsourcing Catering Workers While Lavishing Bonuses On Executives
Look forward to dollars invested in the food and beverage itself – it matters for premium travelers
I tend to think that is a false-trade off.
I suppose this maybe accounts for me gets a BA World traveller packaged bread roll as part of my meal on my United LHr->SFO flight last week in Polaris … very poor.
More likely due to ongoing global supply chain issues among the airline suppliers vs. the LHR caterer. Especially given BA and UA use different caterers at LHR.
That has nothing to do with catering. That is the airline’s choice.
Because these vendors are going to have a much easier time hiring staff at even lower wages and benefits than before, how could this not be a win-win for all involved…
The headline and content here are a bit misleading, as United is not closing all it’s kitchens. 4 of the 5 (perhaps not HNL) are being transitioned to vendors. The same facility and largely the same employees will still produce products for UA. Also, UA will continue to have creative control over the product.
Of course UA will have creative control, but it is outsourcing and I’m very skeptical the motives and the implication that employees will be paid less so UA can improve its food.
The rates paid by these same contractors in their US locations are in-line or better with what UA paid in the markets being transitioned. UA had a very small network of kitchens that were very likely not benefiting from the same kind of ERP and operational planning systems larger catering businesses have. These systems help efficiently manage transportation needs and materials, reducing the waste created during food production and delivery to aircraft. There are plenty of ways this makes sense financially without even looking at labor.
If pay is the same or better, why wouldn’t that be the headline in the employee memo instead of how UA is going to save money through this move?
Again, there are many different types of costs involved with this type of business, food and material costs are often greater than employee costs. If a outside supplier has superior tools than United has internally, (which is likely as these are caterers who do this as their primary function) a reduction in waste would be expected. That is to say nothing of the efficiencies that come from a system IT group managing system tools for 100+ kitchens vs. 5.
It’s fair to call out the risk of wage impact, sure. But unless Gate Gourmet and Newrest have shared with you what they intend to pay, why assume these savings are all at the expense of the employees?
What about other factors, like upward mobility? There was a time in this industry where you could work your way up from almost anywhere, but outsourcing kneecaps that path.
There are some very interesting social mobility issues there, too. Folks working those jobs are less likely to have college degrees and more likely to be minorities than other parts of an airline staff. What are the long-term implications?
Matt, a couple of questions, you say that all employees will be offered jobs with the new caterers then go on to say that it’s a slap in the face to taxpayers because they’re laying off staff. Who exactly is getting laid off, your comment doesn’t make sense. Additionally, as a US taxpayer we should all applaud this move since the Govt holds an equity stake in United now. By moving this part of their business to a 3rd that party that specializes in flight kitchens it puts them in the same position as DL, AA, B6, and AS. So it will help their costs and possibly bring about better food options all of which will benefit their bottom line, which will then make the govt stake more valuable.
They are getting laid off from United, because United is closing its kitchens. With that, they lose seniority, generous pass travel, and other benefits. They will be doing the same job for less while UA executives enjoy lucrative pay raises. Taxpayers did not bail out United to make money, but to save jobs. Maybe UA should fire half its managing directors and other bloated executive staff before it says to lower wage employees to keep doing the same work for less money…
Bob not only do I work for you United airlines I once worked in United airlines flight kitchen make no mistake anytime the airline and I mean anytime the airline can save money and stuff the profits back into upper management which by the way never ever ever takes pay cuts it’s a slap in the face to taxpayers United will circumvent any situation repeat United will circumvent any situation that will help their bottom line do you remember 9/11 we’re going bankrupt do you know the year before United was making so much money it was ridiculous we had 125,000 employees one year later 9/11 in a year later we’re bankrupt they circumvented a national tragedy to take away my pension vacation holidays work rules pay I could go on and on and on
This paragraph could use a few periods.
Matthew, the three big catering contractors in Newark (for instance) are Flying Food, Gate Gourmet, and LSG Sky Chefs. Given that at every major station that UA serves that doesn’t use Chelsea Food Services (the Continental internal caterer you mentioned) used Gate Gourmet (except MCO which uses Flying Food, and JFK which uses LSG), I reckon they’ll outsource it to Gate Gourmet. But I also know that in Europe UA almost exclusively use Newrest (certainly in MAN, LHR, CDG, MAD, BCN, LIS, NAP among others), and that Newrest opened up a flight kitchen in MSP for Delta. Could United ask Newrest to open up a brand new facility exclusively for them in Newark, given their frequent use of their services in Europe, as Delta did in MSP? I think from experience (pre-pandemic) that the best caterer is probably Flying Food, however. What do you reckon?
Your info is a bit outdated. Gate Gourmet is UA’s largest catering partner in Europe (after their recent purchase of LH’s LSG operation). Newrest would be the next largest.
In the US, LSG has more locations supporting UA than GateGourmet… at least before this announcement. Newrest also has a few, as does Flying Foods.
Newrest isn’t in MSP, they are in RDU and SLC (for Delta). They also support a portion of Delta’s ATL operation… with Sky Cafe having another part. MSP is still LSG, and DTW just transitioned to Do & Co (in the same Delta-owned space as the former LSG operation).
Just treat your united airport prople like ##.that is what will happen.when then ues the contracters..like gate gorment.does at ord for American airline catering
We can only hope the food gets better. Your attempt to restart the feeding of flyers has been a disaster.
Airline catering is a pretty low margin business, which is why Lufthansa is divesting LSG. If using a third-party caterer was a significant cost advantage, UA could have done 2-way catering out of its flight stations (SFO, ORD) where it did not have a legacy Continental catering operation. There could also be catering customers (i.e. airlines) in IAH, DEN and EWR that didn’t want to use the United-owned kitchen because it would be supporting a competitor’s business. Lets face it — catering is not a competitive advantage for United, unlike Emirates and Turkish, and so it makes sense for United to exit the catering business.
In the comments you say, “the implication that employees will be paid less so UA can improve its food” and “how UA is going to save money through this move”, but I’m not sure that is the only reading of the memo.
UA may want to invest its capital in new planes, and not in a low margin business that none of their domestic competitors are in. Investing in new planes would consistent with the memo’s line that UA wants to “invest in solutions that significantly improve our customers’ onboard experience”.
What a selfish move by UA. The least they could have done is keep those flight kitchen staff on the payroll as you have succinctly pointed out. The pilots and flight attendants are not as important as the below wing/on the ground staff – they’re ALL EQUAL!
It’s hilarious that some think (or proclaim) this will somehow lead to improved catering/quality…might have a NJ Turnpike rest stop I’m willing to sell to you too
It would have been nice if those employees hadn’t found out about it in a press release. Perhaps United could have given them a few minutes’ warning about their loss of/change in employment status before announcing it to the whole world.
Your quote is revealing: “United is the last U.S. legacy airline to operate its own flight kitchens”.
So, UA should have done this years ago, like all the other airlines.
United Clubs are also outsourced, with Sodexo employees preparing the food there.
Furthermore United did divest its flight kitchens, but acquired Continental m’s flight kitchens in the acquisition. When United changed its catering vendor in Chicago a few years ago, it didn’t change to its in-house operation — it switched from Gate Gourmet to LSG Sky Chefs.
No airline wants to be in the catering business. It’s a low margin business and there is no competitive advantage to owning it unless high end catering is part of your value proposition (ie Singapore, Emirates, Turkish).
Airlines should use proven fast food vendors with a limited menu for intl or Dom Mets. Ppl can still bring their own food also as a supplement. The days of gourmet chef meals is passe. Today’s traveller’s want to work, sleep, or be entertained on flts. You won’t get your money’s worth on flts because mgmt thinking has always been invester driven, no matter what ad agencies say.
It is no surprise that the higher ups have already guaranteed themselves jobs still within United Airlines while the Frontline and supervisors are left scrambling, unsure of their future.
and after working very hard for this company for 16 years i get slapped in the face too with a ONE year flt benefit if and only if I remain with the company through out this transition.. ouch!