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The economy class segment dominated more than 60% of the market share in 2020 led by the growing consumer preference toward economy class for short to medium haul travel distance. APAC has reported an increase in number of disposable income and middle-class population over past few years, fueling the demand for economy class aircraft seating in the industry.
Outsourcing segment in the in-flight catering services market will account for USD 16 billion by 2027. Outsourcing in-flight catering service is expected to remain the preferred option for majority of airlines and private jets over the forecast time period due to the availability of a wide range of international cuisines and dishes. Stringent government regulations related to food safety and hygiene will further drive the need for outsourced in-flight catering services as they involve a lot of certification related to food safety. Major airlines have established strong contract agreements with in-flight catering service providers, further increasing the demand for outsourced food products during the forecast timeframe.
Meal segment captured 45% of the revenue share in 2020. In-flight meals vary according to size, quality, and cost across airlines, classes, and flight lengths. Proper menu design and preparation process are followed by incorporation of safety measures. Airline kitchens prepare meals in kitchens on land and flight attendants reheat these meals and serve them to passengers. Proper attention to cooking methods is given to maintain aroma, color, flavor, and appearance of ingredients. Additionally, airlines are offering a variety of meals and including continental dishes to attract customers.
Asia Pacific in-flight catering services market was significantly affected by COVID-19 pandemic and was valued at over USD 3 billion in 2020 impelled by the rising population, increasing disposable income levels, and supportive government policies. Countries including China and India are investing huge amounts of money on airport infrastructure projects. Apart from these two, various countries including Vietnam, Colombia, Indonesia, Malaysia, and the Philippines are poised to be fast growing countries for air passenger travel. Favorable trends associated with the airline industry will foster the regional growth.
According to the International Air Transport Association (IATA), in 2016, the number of air travelers was around 3.8 billion, and it will increase up to 7.2 billion by 2035. The growth will be spearheaded by the Asia Pacific region and it will be the fastest-growing region, in terms of air passenger traffic growth, in the future. According to the Airports Council International’s (ACI) Annual World Airport Traffic Forecasts 2017 – 2040, APAC will contribute nearly 39% of international passenger traffic growth between 2017 and 2040.
North America market is projected to witness 5% growth rate through 2027. The international passenger traffic growth in North America will be around 8.4% between 2016 and 2040. In June 2019, the U.S. government announced that the FAA (Federal Aviation Administration) awarded USD 495 million in the airport infrastructure grants; which is the second allotment of the Airport Improvement Program (AIP) of USD 3.18 billion in total. The allotment will be used for the development of 327 airports across 46 states and the Pacific Islands. These upcoming projects are carried out to meet rising passenger traffic, which will generate the need for a large number of aircraft.