Originally Posted by B767
Ah....the fine print! One wonders why it took 6 months to figure out that Cara was "overcharging" AC? Isn't that equal to $10M in savings or $20M since they have been in CCAA?
"Overcharging", strong language wouldn't you agree? On what basis do you make this statement? Are you saying that because one company might have lower operating costs that the company with higher cost is automatically "overcharging" it's customers? If that is the case than AC must have been overcharging it's customers on routes where it competes against WJ & SG? Maybe, just maybe Cara had to charge another $ 14M to make up for the money AC screwed them out of when they went into CCAA?
Who said Sky Chef's was more efficient? Not sure about your business but in ours it is quite common for our competitors to undercut our bids at first to win the business from our customers than slowly but surely raise the rates, add a surcharge here and a surcharge there.
When you do best of breed comparisions you don't do it overnight so 6 months is not a long time for comparisions.
If AC is paying more than best of breed then they are being overcharged..pretty simple to me when CARA agreed to the comparision
Who said Sky Chefs are not more efficient either...maybe they don't have unionized employees, maybe they have better methods for getting food ready, maybe they buy their ingredients cheaper and maybe thye are better managed overall. You don't need to undercut prices to be a good competitor.
Your business maybe structured to allow a lot of surcharges,if the buyers don't know how to write contracts, but the airline food industry I don't think fits that structure.
Maybe you're in a dumb industry.