BOB disappearing act at US Airways sees LSG lose big

US Airways dropped a proverbial buy-on-board (BOB) bomb this week, after revealing that nearly half of all the food that LSG Sky Chefs provides for BOB is never accounted for – it’s lost, dropped in the trash before it gets back to the kitchen or eaten by people that didn’t pay for it.

In its latest employee newsletter, the Star Alliance member steers well clear of accusing employees of steeling the meals but it makes very clear – in a three-page article – that the shrinkage is untenable.

“It’s happened more often than we’d like to admit,” says US Airways. “You settle in for a transcontinental flight as the flight attendant announces they will begin the food and beverage service. You make your buy-on-board decision, eagerly awaiting the scrumptious InFlight CafĂ© treat, cash in hand. The flight attendant is just a few rows ahead when another announcement is made: ‘Our apologies, ladies and gentlemen, we’ve sold out of all Buy On Board meals’. It’s frustrating for customers and employees alike and it’s happening more often than any of us would like.”

 

BOB at US AIR.JPG

US Airways VP inflight services Sherri Shamblin says the carrier has “dug into this problem” and found that even after increasing the quantities of BOB, it now knows that ordering more isn’t the sole solution.

Here’s why:

BOB partner LSG assumes 100% of the risk for all of the BOB meals and snackboxes put on the airplanes. To protect its revenues, says US Airways, LSG monitors the sales history from each flight. Over a five-week period, if sales on a particular flight trend down, they’ll board fewer meals. Likewise, if sales trend upwards, then there will be an increase in the number of meals onboard. This works well when all sales are accounted for, but not so well when food goes missing.

For example, if 10 sandwiches are boarded on a flight, but only two are paid for and two return to LSG, LSG has no way of knowing what happened to the other six sandwiches. Whether they are given away free during a long onboard delay or, tossed out due to spoilage, LSG needs to account for every piece of merchandise that is put on a US aircraft.

“LSG has been a great partner and they assume all of the revenue risk for the product, essentially footing the bill for US Airways,” said US Airways senior VP, flight operations Ed Bular. “However, LSG is losing approximately $360,000 each month for unaccounted or spoiled items. This kind of unaccounted for loss means they also can’t get an accurate count for our customers’ needs. Ultimately, tracking each item is doing right by our customers, our partner LSG, and ourselves.”

I’m sorry. Did I read this correctly? LSG is losing well over $4 million per year on this? Pardon my French but Holy Crap!!!

Before you start pointing fingers at flight attendants, US Airways says “this is not a flight attendant issue by any stretch as they are only one group that touches the inventory”. Indeed, other workgroups who potentially handle the product along the lines include maintenance, ramp and other airport personnel.

“But let’s be clear here, this isn’t about calling out any one group or making an accusation that any group is doing anything wrong; rather we wanted to help everyone understand how this program works and what our responsibility as employees is to ensure its success,” says the carrier.

Okay, US Airways. We get it. No one group is to blame but you’re sure as heck going to find out why BOB is half his usual weight these days.

(BOB graphic from US Airways’ 21 November employee newsletter)

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3 Responses to BOB disappearing act at US Airways sees LSG lose big

  1. sparky November 23, 2008 at 2:55 pm #

    Don’t follow the food…follow the MONEY!

  2. BOB November 24, 2008 at 11:32 am #

    I must say, I am a bit hungry and I hate when I don’t get my meal… ha ha.

    If LSG is losing that kind of money, they need to change their ways of accountability and get someone in their head office that knows how to run a business. In this day and age with the ability to bar code and electronically mark a product, their loss should be minimal. Even if it goes through a Commissary. Just like Fedex or UPS, they know where a package is most of the time. The same principles can be applied here.

  3. Tom Smith December 16, 2009 at 3:33 pm #

    I discovered I could lose a vast amount more weight by consuming less food however more frequently. I lost fat very easy doing it this way.