THE apparent straightforwardness of Alpha Airports' annual results belies the complexity of its core business.
Time is everything when it comes to providing in-flight catering to more than 100 airlines. Putting together the thousands of items - up to 40,000 for one jumbo jet - to meet each airline's dedicated requirements for a specific time is a tricky affair.
'Most things in life start with uncertainty, but with more information they become less uncertain. It is the opposite in our business,' says Paul Harrison, chief executive and holder of a PhD in operations management.
For the passenger the in- flight meal simply turns up soon after take-off. But for Alpha it entered the planning stage two months previously when the company received notification of arrival and departure times from the airline.
'The logistics at this phase are quite clear,' says Mr Harrison. 'You know that demand can't exceed a certain amount. But what you don't know is the number or classification of passengers. The real trick of this business is not to manage the early stages, but to manage it in the final stages when you have the numbers.'
Notification of airline flight schedules helps Alpha to gauge demand at some fixed time in the future, but what it does not enable it to do is to fathom with any degree of certainty what the final outcome on any one day will be.
'No two days are the same,' says Mr Harrison. 'You have to have headroom to cope with the unknown . . . the margin of error has to deal with bad weather, technical problems and other unforeseen events.'
While Alpha is a stand-alone operator, it has to fit in the daily schedule of an airport.
Moreover, the complexity of the business operation has grown over the past five years as individual aircraft have been worked much harder.
Alpha's day at Heathrow starts in earnest at between 4am and 5am. This gives a lead time of about three hours to prepare for the unloading of long-haul aircraft arriving from the US, and another two to get them ready for their subsequent short-haul trip to, say, Germany. The planes then return to the UK in the afternoon and fly back to the US in the evening.
Unloading an aircraft is perhaps the easier of the day's tasks. All the catering equipment is placed on a truck and the reusable utensils and crockery go for washing-up before being stored.
Loading is a bigger problem. Alpha is only provided with approximate passenger numbers for a scheduled flight about 12 hours before take-off.
During that time the company may be told that an aircraft has filled 154 of 187 economy seats, half of the 40 available in business, and eight of the dozen first-class seats. But these numbers can change dramatically.
'If you ran this business as a caterer, then you would not be profitable,' says Mr Harrison. 'You have to run it on the basis of logistics and business management. Size is not the main area of concern. . . it is the changing passenger loads and classifications set against shrinking time zones.'
For each classification - from economy to first - there are distinct requirements.
Changes in the number of passengers in economy class are the easiest to deal with as meals are restricted in choice. Business travellers have some choice of meal, but not much, and again do not pose too big a problem if their numbers swell from 20 to, say, 35 only two hours before take-off.
'But if there is a big upgrade in first class, you really have to be inventive,' says Mr Harrison. 'This is the labour-intensive end of the business - meals are hand-crafted and you have to offer passengers far more choice.
'When there is a big upgrade, there is really only one way to deal with the problem. All the catering staff for first class are told to stop. It is like an industrial production line . . . you don't try to fix it in the run. It is about service, delivery and customers.'
This is where having capacity headroom comes into play. Upgrades to first class and external problems, such as inclement weather, mean higher costs which have to be built into the business model.
Hence, Alpha ensures its kitchens have surplus capacity of about 10 per cent, although this is only likely to be used during the busy periods in early and mid-morning for the arrival of long-haul aircraft and domestic and European flights, and late afternoon for long-haul departures.
Alpha is now looking to cash in on what Mr Harrison calls the 'full-plane, empty-plane scenario'. Why, he asks, if Alpha provides in-flight catering for planes leaving the UK should it not repeat the operation when the plane arrives at its destination.
An announcement yesterday of a joint venture with British West Indian Airways to provide catering at Picaro international airport in Trinidad is probably the first of many to come over the next few years.
Alpha touched down yesterday with a 17.8 per cent increase to pounds 19.2m in pre-tax profits for the year to 31 January. The result, as would be expected for a company that has to meet tight schedules, was as forecast when it floated on the stock market last year.
(Photograph and graphic omitted)
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