Riding the roller coaster of tariffs & trade wars

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Tariffs are creating ripple effects across the airline and travel industries, with inflight catering emerging as a particularly vulnerable sector. As more duties are being slapped on imported goods — ranging from food ingredients to packaging materials —airlines are seeing a spike in catering costs. These added expenses come at a time when carriers are already under pressure to enhance passenger experience while keeping fares competitive. Nobody knows where this trade war will take us, but it’s safe to say you can expect more turbulence ahead.

Let’s dive in.

Brace for turbulence: The emerging tariff risk for airline catering

Within the inflight catering industry, we’re no strangers to disruption. 

Just in the past few years we’ve weathered a pandemic, navigated volatile supply chains, and started to embrace digital transformation. Now, a new threat is here: tariffs on key imported goods.

Much of what makes modern airline catering work — from specialized packaging to high-grade equipment to imported food ingredients like wine and cheese — comes from a complex web of international suppliers. 

According to recent estimates, imported goods make up more than 40% of a typical catering operation’s budget. The imposition of 10–25% tariffs on items like aluminum trays, meal containers, and certain food products could push industry-wide supply costs up by close to $200 million in the first year alone. This could have a significant impact on providers in a business where margins are often counted in fractions of a percent. And it comes on top of weakening ticket sales, which have already prompted several U.S. major airlines to reduce their flight schedules and withdraw earnings guidance for the year.

Tariff-related cost pressures could surface in several ways. Menu planning may need to become more conservative. Fewer meal variants, longer rotation cycles, and a greater reliance on standardization may be among them. Procurement teams could face difficult trade-offs between cost and quality, or between supply reliability and ingredient origin.

INDUSTRY INSIDER

Economy passengers getting a taste of first class

More airlines are upgrading economy class dining by offering passengers the ability to preorder premium meals typically found only in first class, aiming to enhance the passenger experience and build brand loyalty. Though the logistics are complex, carriers see growing demand from economy travelers willing to pay extra for better food. [CNN]

How one food company is transforming inflight catering

Santan, the inflight catering arm of AirAsia, is changing what’s possible in airline dining by introducing flavorful, affordable meals and innovations like freeze-dried coffee capsules. Utilizing AI-driven kitchens and compostable packaging, Santan emphasizes sustainability and efficiency, reducing food waste, and enhancing operational consistency. The brand's expansion into ground-based restaurants and commitment to authentic regional dishes reflect a broader strategy to redefine airline food and build customer loyalty. [Asia Food Journal]

United Airlines experiences catering snafu in SFO

The carrier’s recent switch from Gate Gourmet to LSG Sky Chefs at its San Francisco hub turned into a logistical nightmare. The rough transition led to numerous flights departing without meals, beverages, or even ice. Many passengers, including those in first class, reported receiving only prepackaged snack boxes and bottled water. [SF Chronicle]

The race to bring fast food to the skies

Delta’s partnership with Shake Shack set the bar. American followed with a pilot program offering mini burgers and fries earlier this year. Expect to see more brand partnerships and menu offerings of this sort as fast food becomes a high-profile way for airlines to differentiate. One major challenge: Delivering hot, crispy fries at 35,000 feet. [Quartz]

A word from our partner

Airlines face major challenges in coordinating in-flight catering, as miscommunication between teams can lead to loading errors, delays, and wasted resources. Many still rely on outdated systems like printed documents or emails, which make real-time collaboration difficult.

Modern in-flight catering software streamlines operations by improving communication, reducing errors, and ensuring that meal provisioning runs smoothly—saving both time and money.

IFCS Aviation Galley Planner is the easiest way to monitor and control the operational functions related to inflight catering, menu planning, and galley loading.

TECH CHECK

Lufthansa taps AI tech to cut waste, optimize meal planning

The Lufthansa Group has introduced an AI-driven tool, known internally as Tray Tracker, to reduce inflight meal waste and lower expenses. It works by scanning returned trays to assess how much food was consumed versus discarded. By drilling down into variables like flight routes, meal types, and cabin classes, the system will eventually enable smarter meal planning on a route-by-route basis, cutting waste and lowering carbon emissions. [AeroTime]

United’s AI strategy: The airline that makes decisions fastest wins

United Airlines has been leaning into AI to move faster and make smarter decisions across its operations. With tools like “United GPT,” the airline is using generative AI to improve everything from how it communicates with passengers during delays to how managers give feedback. It’s all part of a bigger push to use tech to work more efficiently and deliver a better experience for both employees and travelers. [CIO]

The One Chart You Need to Know

President Donald Trump’s rhetoric and policy moves in the first few months of his second term continue to rattle the travel industry. In particular, travel bookings from Canada to the United States have collapsed, following Trump’s remarks about turning the sovereign country into the “51st state.” According to data from OAG, airline ticket purchases for flights between Canada and the U.S. have plummeted nearly 76% compared to last year. [DataShows]

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