LSG Sky Chefs, the world’s largest provider of in-flight services, and Finnair have signed a Memorandum of Understanding on LSG Sky Chefs acquiring Finnair’s catering operations. The acquisition would comprise the entire share capital of Finnair Catering Ltd. and Finncatering Ltd. Finnair would continue to buy its flight catering services from Finnair Catering Ltd., which transfers under LSG Sky Chefs ownership. The acquisition is subject to the approval of Lufthansa Board and the competition authority of Finland and it is expected to be closed by the end of first half of 2012.
"LSG Sky Chefs is one of the leading players in the in-flight service industry. Its international product development, global operations and profound know-how of in-flight services are an excellent basis for producing high-quality in-flight service for Finnair customers. We have positive experiences with LSG Sky Chefs from other airports outside Finland and this is a natural continuation of our partnership", says Anssi Komulainen, Senior Vice President of Customer Service at Finnair.
“Together with other measures taken to improve efficiency in catering operations of our airline business, we expect this transaction to result in substantial permanent annual cost savings contributing to our overall savings targets.”
"LSG Sky Chefs is extremely pleased to be able to widen its operations to the strategically important Finnish market. Finnair’s catering operations are well run, the personnel is very professional and the production facilities are state-of-the art. Finnair is an important client for us and we are convinced that we can further develop the operations, thus producing additional value for Finnair and its passengers", states Jochen Müller, Executive Board Member Operations of LSG Sky Chefs.
In 2010, the catering business included in the Memorandum of Understanding had net sales of 80 million euro. Subject to the final agreement, approximately 650 employees of Finnair Catering Ltd and Finncatering Ltd will be employed by LSG Sky Chefs. The transaction does not include Finnair Travel Retail, which as of January 1, 2012 has been a part of Finnair’s other operations.
Developing its partnership network is a part of Finnair’s strategy and the planned structural changes of the company, which aim at cost savings and facilitating growth through quality improvements. Finnair had announced earlier that it was looking for a cooperation partner for its catering services.
LSG Sky Chefs is the world’s largest provider of in-flight services. These include catering, in-flight equipment and logistics, in-flight retail as well as the management of onboard service and related airport services. LSG Sky Chefs partners with more than 300 airlines worldwide and operates some 200 customer service centers in 50 countries, producing around 460 million airline meals a year. In 2010, the companies belonging to LSG Sky Chefs Group achieved consolidated revenues of € 2.2 billion. For further information also visit www.lsgskychefs.com
Finnair announced on August 5, 2011 that it targeted decreases in its annual costs of 140 million euros by 2014. Finnair has already announced that it:
- has chosen Swissport as its partner for baggage and apron services
- is optimizing the size of its fleet in European air traffic, has discontinued the leases of four Airbus 320 series aircraft, and subleased four Embraer 170 aircraft
- is exploring different alternatives to improve cost-efficiency of its engine and component maintenance services
- is streamlining its support functions as well as marketing and distribution activities
- seeks a partner to accelerate its Nordic Champion strategy and aims to significantly lower costs in European traffic
- has initiated numerous other savings measures throughout the company.
Source Nasdaqomx
