Tianjin Airlines cancels free in-flight meals in economy class to cut cost

China’s Tianjin Airlines announced in recent days that it will no longer provide free meals to passengers in economy class starting from Sunday, a decision which an industry observer said shows small and medium-sized air carriers’ struggle to contain cost and generate new profit growth from additional supporting services facing a fiercely competitive domestic airline market.

Passengers can still order in-flight meals through the airline’s official website, WeChat or on board, according to an announcement on the company’s website, which stressed that the airline would “launch differentiated services to provide passengers with multiple choices and customized services.”

Tianjin Airlines, based in North China’s Tianjin Municipality, is fully controlled by Hainan Airlines, one of the four largest carriers in China.

Other changes the company made also include an adjustment to baggage service, as the new regulation stipulated that passengers who bought economy class tickets at more than a 40 percent discount will not be able to enjoy free checked baggage.

An industry insider, who declined to be named, told the Global Times on Wednesday that the move shows Tianjin Airlines’ shift in strategy to reduce cost and improve profitability, as it aims to move into a budget airline amid a competitive market.

“The in-flight meal actually costs a lot, including expenses from purchase, transportation, and storage,” the observer noted.

Analysts predict that the decision would help Tianjin Airlines to save at least 28 million yuan ($4.03 billion) a year after it cancelled free in-flight meals.

The saved cost would have accounted for 2.46 percent of its revenue of 11.37 billion yuan in 2017, based on the calculation of the Global Times.

Tianjin Airlines is not the first Chinese airline company to stop offering free in-flight meals. Since 2015, a number of budget airlines including Lucky Air, Spring Airlines, China United Airlines, and West Air have also made similar decisions, according to media reports.

“From a long-term perspective, Tianjin Airlines is also testing the waters – it wants to learn as to what extent could domestic passengers accept paying for airline companies’ additional supporting services,” the insider added.

Additional supporting services generally refers to services in addition to tickets sales, such as charges for overweight baggage, seat selection, in-flight meals as well as commission fees for in-flight duty-free product sales and advertising.

“But developing additional services in China still faces hurdles from consumer acceptance,” the insider noted.