Air Transport World

Specialized distributors save airlines time, money, headaches.

Specialized distributors save airlines time, money, headaches

The number of individual items that must be aboard an airplane in order for passengers to enjoy the services to which they have become accustomed can easily number in the thousands. The serving of the simplest meal can require, for each passenger, a tray, tray liner, napkin, cutlery, casserole dish, salad dish, dessert dish, lids for each dish, cup and condiments-- not to mention food. Then there are glasses and napkins and stirrers for beverage service, lavatory supplies, pillows and blankets, headsets--the list can stretch to a couple of hundred types of products.

The logistical problems associated with procuring all of these items and getting them to the right place at the right time in the right quantities are enormous. In the early days of air transportation, most airlines handled the task themselves, and many still try to do so. Others, however, have decided that their time and energies are better spent on their primary function of moving passengers, and have turned the job of dealing with on-board supplies over to a small group of distributors who specialize in meeting the peculiar needs of the airline industry.

The true costs

The airline customers of specialized distributors like Sage, Michael Lewis Co., Bunzl plc. and Stemwinder Corp. say that the distributors are doing a better job at less cost than they could do themselves, but specific numbers are hard to come by. The problem, the distributors say, is that airline accounting systems don't really capture the true cost of acquiring and distributing products. In addition to the cost of the goods themselves, there are such items as the time and manpower involved in specifying and purchasing and doing the associated paperwork, warehousing and inventory control, transportation, interest charges and taxes, the cost of fuel and handling if the items are moved aboard the carrier's airplanes as company material (comat), overstocking by caterers to allow for the vagaries of comat deliveries, loss via pilferage or simply because items become misplaced in the system.

"The costs are scattered all over,' says one distributor, "some in the dining service department, some in the purchasing department, some in air freight, some in accounting. We know we are reducing the airline's cost of distribution, but it's hard to say by how much because airlines have not really identified the costs involved.'

Bunzl estimates that the ten largest U.S. airlines each year consume 8.5 million cases of non-food on-board items costing $250 million and weighing 173 million pounds. It further estimates that the movement of these supplies from the manufacturer to the airplane via conventional distributor or in-house systems adds about 25% to the cost, and that specialized distributors can do the job for about half that amount. …

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