Analysis of Lufthansa Service Holding Sky Chefs

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2002 was a very hard year for airlines, and this trend will continue for a long time. It is true that since September 2002, we have seen double digit passenger growth rates again, but these figures are deceiving as they only compare current rates with figures taken after September 11th. Neither do we expect a substantial growth in the market in 2003. Attacks in Iraq add to the skepticism. This also entails the food industry for airline industry, which is also known as the airline catering. Sky Chefs was initially firmly incorporated in 1942 as a wholly owned subsidiary of American Airlines. The Company’s principal functions were, and carry through to be, the provision of in-flight food and beverage catering services to the airlines. In 1986, the Parent Corporation of American Airlines AMR Corporation sold Sky Chefs to Onex Capitol Corporation (Onex). In 1993, LSG, a wholly owned subsidiary of Lufthansa German Airlines, acquired twenty-three percent of Sky Chefs, and brought into a worldwide marketing alliance pinning down Sky Chefs as “LSG Sky Chefs.” In 1999, LSG extended its ownership to more or less forty-eight percent with the option to purchase the leftover shares by the end of 2003. Sky Chefs a short while ago employs almost 14,000 employees in the United States, and services more or less 109 airline customers at very nearly eighty stations. These airline-catering accounts are ninety-eight percent of Sky Chefs domestic business, and the hourly employees carrying out this work consist of around 90% of its U.S. workforce. Roughly ninety-eight percent of Sky Chefs domestic business is airline-catering accounts. Similarly, around ninety-eight percent of its U.S.-based hourly employees work for the airline contracts. Wherever...

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...specially in the area of cost savings and giving importance to fact the “Customer is the King” they have been able to increase in passenger satisfaction as a result of forecasting and tracking orders, which reduces the chance of supplying the incorrect meal or not having enough meals for a particular flight. References LSG Sky Chefs Signs Exclusive Agreement With Chef Wolfgang Puck for 'In-flight Cafe(SM)' Program, Thursday April 10, 7:01 am ET, http://biz.yahoo.com/prnews/030410/dath020_1.html Student Fact Sheet, In-flight Catering - Student Fact Sheet, Dated: 28-Nov-2001, http://www.ifcanet.com/teams/education/student.asp eLSG.SkyChefs Signs Agreement With American Airlines to Provide eACE Web-Based, Technology to Improve Inflight Operations, Tuesday September 03, 2002, http://www.foodservice.com/news/company_news_detail.cfm?id=4335&company_name=Sky%20Chefs

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