Gate Gourmet will become the “sole service provider” for Virgin Australia’s 450 daily domestic and international flights from June under a new six-year deal.
The catering company, owned by gategroup, already provides meals and handling for Virgin Australia at a number of ports and the new long-term contract would expand the portfolio of work by about 40 per cent, the two companies said in a joint statement.
It would also result in 100 jobs being created at gategroup around Australia.
Virgin Australia group executive for airlines Rob Sharp said the partnership would “enable us to take our inflight dining experience to new heights”.
“We are in the process of transforming the Virgin Australia food and beverage offering and today’s announcement will enable us to bring benefits to our guests more quickly,” Sharp said in a statement.
“gategroup has been an excellent partner of ours for a number of years and we look forward to working with them more closely to provide the world’s most rewarding travel experience.”
Virgin Australia head chef Luke Mangan would continue to work closely with Gate Gourmet.
gategroup chief executive Xavier Rossinyol said it was an exciting evolution of the partnership with Australia’s second largest carrier.
“gategroup’s ongoing relationship with Virgin Australia further strengthens its position as a leading airline caterer in Oceania region, leveraging our commercial and retail innovations,” Rossinyol said.
“It’s an exciting time for the industry and for pushing boundaries on what inflight meals and services can be.”
Virgin Australia is due to publish its 2017/18 first half results on February 28 2018.
HNA Group purchased the Switzerland-headquartered gategroup for 1.5 billion Swiss francs (A$2 billion) in 2016, part of a $50 billion worth of acquisitions over a two-year period.
As a consequence, the Chinese conglomerate has built up strategic investments in airlines, aircraft leasing, cargo, financial services, ground handling, hotels and travel businesses. It is a major shareholder in Virgin Australia and has a seat on the board.
Media reports in December 2017 indicated HNA was looking to float gategroup some time in 2018 through an initial public offering.
The move to sell off some assets comes amid speculation the company was facing liquidity concerns and a lack of willingness among some banks to support its recent debt-fuelled buying spree.
(The January/February 2017 edition of Australian Aviation included an in-depth look at Gate Gourmet’s Sydney operations. Back issues are available here.)