PrimeFlight Acquisition Amplifies Labor Turmoil at Phoenix Sky Harbor

Event summary

  • Private equity firm Atlantic Street Capital sold GAT/Sky Café to PrimeFlight, owned by Sterling Group and Capitol Meridian Partners, on February 5, 2026.
  • This acquisition follows a November 2025 layoff of 200 UNITE HERE Local 11 members when LSG Sky Chefs lost a contract with American Airlines to GAT/Sky Café.
  • Sky Café workers received a poorly communicated letter requiring “onboarding steps” to continue employment under PrimeFlight, with potential changes to benefits and policies.
  • At least 59 Local 11 members are currently unemployed, and the remaining Sky Café workers lack union representation.
  • Claims filed with the Industrial Commission of Arizona allege unpaid wages for at least five food service employees, and a complaint to the Arizona Attorney General cites potential minimum wage violations.

The big picture

This situation highlights the increasing prevalence of private equity involvement in essential service sectors, often leading to workforce instability and potential labor disputes. The acquisition strategy of rolling up smaller catering businesses creates operational complexity and exposes vulnerabilities to regulatory and labor challenges. The lack of engagement from Atlantic Street Capital underscores a broader trend of private equity firms prioritizing financial returns over stakeholder considerations, particularly concerning employee welfare.

What we're watching

Labor Relations
PrimeFlight’s response to UNITE HERE Local 11’s concerns will be a key indicator of its approach to labor management and potential for future disputes.
Regulatory Scrutiny
The pending investigations into wage violations could expose broader compliance issues within PrimeFlight’s subcontracting network and attract further regulatory attention.
Contract Stability
The rapid turnover of catering contracts at Phoenix Sky Harbor suggests a vulnerability in the airline catering market, potentially impacting PrimeFlight’s long-term revenue stability.

Related topics

Private Equity Layoffs