Learning Objectives

• Explain what is meant by innovation

• Compare and contrast new product and new service development

• Understand how suppliers, caterers and airlines go about innovation

• Identify the factors affecting in-flight innovation

• Understand the role of the Mercury Awards in promoting industry innovation

Introduction

This chapter reviews the nature of innovation in the flight catering industry. Innovation is explained and new product/service development is explored, before going on to describe the processes followed by airlines, flight caterers, and suppliers when they develop new products and services. It also examines how ideas are disseminated and discussed between these three parties. What emerges is a complex picture. Airlines adopt a process for innovation based largely around new service development, whereas caterers and suppliers adopt a new product development approach. In addition, suppliers in particular have to work largely in the dark as to what the airlines may be planning, as the lead time for developing new products can be longer than the time horizons of the airlines.

New Products and Services

New products and services have always been an important element of competitive strategy in the airline industry. In continental North America, strong competition and deregulation have resulted in a process of almost continual innovation. This has also become more significant for European and Asian carriers, particularly in the 1990s and early 2000s. After half a century of continuous growth, passenger volumes fell significantly in 1990, and over half of the 50 largest international airlines recorded losses. The immediate cause of these...