INFLIGHT: ALPHA LSG


Monarch demise does little to dampen growth at Alpha LSG


The loss of the Monarch Airlines contract last year was a difficult blow for Alpha LSG, but far from proving a setback the UK-based inflight services firm has set about strengthening and diversifying its portfolio to great effect. Luke Barras-Hill reports.


W


ithout labouring the point about inflight retail’s challenge over


the years, it is plain to see that the market seems to be turning a corner, as Generation Research figures supplied by TFWA have attested to in recent years. Riding the crest of this resurgence


is Alpha LSG, which recorded strong organic sales growth year-to-date (August) off the back of a healthy uplift in passenger numbers. The inflight catering, onboard


retail and logistics services firm jointly owned by dnata and LSG Sky Chefs generates combined revenues of more than £300m ($387m) per year. It also possesses an enviable airline


portfolio including Tui Airways, Japan Airlines, Lufthansa, Malaysian Airlines, SAS, Thomas Cook and United Airlines. Speaking to TRBusiness, Alpha LSG


Inflight Retail & Managed Services Director Alan Hayes says: “Retail sales are up over 10% so far this year across the boutique and duty free categories, with further growth being enjoyed in the food & beverage categories.”


OCTOBER 2018


Hayes attributes the strong sales performance to core categories such as liquor and tobacco. Additionally,


inflight sales. “In some categories the success


innovative


merchandising tactics such as changing loading levels for key brands on different routes and at departure locations to reflect customer demand has proved fruitful. “Sales of boutique products are


encouraging after a couple of tough seasons,” he comments. “Jewellery has recovered well with an 80% growth year-on-year after losing some key brands a couple of years ago. Cosmetics are trading 4% up year-on-year and gifts & accessories are up 14%. However, fragrance growth is more moderate.”


The rise of niche brands With some brands turning their backs on the inflight channel over the years [Chanel in 2012 being just one example-Ed], airlines and their concessionaires have had to diversify merchandising assortments and selling approaches. For Alpha – like many others –


introducing new and exciting brands by bringing suppliers back into the fold has been core to reigniting


has been phenomenal,” explains Hayes. “It’s great for some of these newer, smaller and niche product suppliers that they get good exposure onboard our flight, launching their products to a captive audience.” One example has been the launch


of ‘magalogue’ concepts: magazine- style brochures that showcase skus with storytelling, usage guidance, and tips to get the most from the product to lure impulse buyers. But success has not been


without its challenges, with inflight retail’s success at the mercy of a volatile airline market shaped by variables such as load factors, fuel costs and continued pressures on ancillaries. The well-publicised crisis and


subsequent collapse of Monarch Airlines in October 2017 resulted


For Alpha – like many others – introducing new and exciting brands by bringing suppliers back into the fold has been core to reigniting inflight sales.


TRBusiness TRBUSINESS 45


Above: Alpha LSG Airshoppen retail warehouse facility in Birmingham.


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