As aviation evolves and competition heats up, the industry is undergoing massive change. The continuing desire to cut costs and environmental impacts while increasing operational and organisational efficiencies has propelled airlines to implement an increasingly global delivery model, tapping into external skills to improve processes and products.

Contracting out key processes - from manufacturing to maintenance, information technology services to catering - is increasingly seen as the way to achieve this goal. Outsourcing enables airlines to fully leverage the expertise, innovation and investments of the best suppliers in the market and focus on what they do best - fly aircraft.

Outsourcing continues to move into areas that have generally been regarded as the airline’s exclusive domain.

According to Deloitte’s Global Outsourcing Surveyoutsourcing is expected to see growth across all functions, particularly IT and HR. Companies seek innovation from outsourcing agreements, with 58% gaining quality, 44% bringing lower cost of delivery and 38% improving consumer experience.

A research report on Trends in Airline Ancillaries by Accenture and Amadeus Alliance also found that revenue from ancillary options - including onboard meals, product purchases and hotel bookings - doubled as a percentage of total airline income from 4.8% in 2010 to 9.1% in 2016. As a result, airlines are increasingly recognising the need to optimise and expand ancillary merchandising.

Now more than ever, airlines are faced with the pressure to improve their products and services without ballooning operational expenses.  Adding to this, carriers are increasingly exploring buy onboard (BOB) programmes.

In an effort to divest non-core activities, many airlines now use third-party suppliers with a global presence, like dnata, to design and deliver high-quality and affordable food, retail and onboard services to passengers. Choosing external service providers means airlines can tap into the economies of scale available to a specialist, global-catering operation.

dnata has tapped into the global aviation outsourcing trend by providing a smorgasbord of services and expertise, including onboard catering services in 62 locations across 11 countries.

We take ownership of the entire product delivery chain - be it catered meals or duty free merchandise - from product and packaging design to market research, supplier management and logistics.

To deliver higher value at optimal price points, external caterers with retail experience create unique onboard product portfolios and a consistently high-quality brand experience tailored to individual customer preferences.

Technological innovations across a range of aviation processes are also lifting outcomes. The rapid development of cloud computing coupled with the expansion and evolution of ‘as a service’ solutions, has, for example, shifted IT spending to a pay-as-you-go financial model. This has technically turned IT operations into an operational expense (OpEx), as opposed to infrastructure-heavy capital expense (CapEx). Outsourcing infrastructure responsibilities and challenges to external operators means internal airline IT departments can prioritise innovation in respect of their core product, launch new customer-centric products and services and broaden their business, while saving money.

In today’s hyper-connected world, airlines are leveraging ubiquitous smart devices, back-seat entertainment consoles and the growing availability of broadband internet access on board to entice passengers to shop while in the sky. Taking steps to enable a connected aircraft vision, leading carriers look to external service providers to introduce new mobile point of sale (POS) solutions, both through self-service smart devices and equipping and incentivising crew to sell. These novel digital experiences have the power to boost ancillary revenues as well as passenger satisfaction levels.

Building a competitive and highly qualified workforce in one location requires vast amounts of time and resources. The key advantage of partnering with external service providers, on the other hand, is access to their large, well-established and diverse talent pool in locations across their network. From market researchers to branding experts and product designers, outsourcing retail services to experienced professionals can bring on board specialised help - both technical and industry-specific - in production technologies or merchandising tactics that are cutting edge.

The fastest growing companies in aviation are differentiating themselves by being smarter in targeting inflight retail offers. They achieve this through data - by creating value propositions and targeted services based on real-time information about passenger preferences and needs.

No longer is the sky the limit to increased operational efficiency and revenues.