Financial Daily from THE HINDU group of publications
Saturday, Apr 16, 2005
Taj SATS sees 15 pc growth with arrival of more carriers
Tunia Cherian George
Mumbai , April 15
TAJ SATS Air Catering expects to register a 10-15 per cent growth in turnover in the current fiscal as the aviation industry in the country expands with the arrival of new global players and the proposed launch of a clutch of domestic carriers.
The company, a 51:49 per cent joint venture between Indian Hotels Company Ltd and Singapore Airport Terminal Services, recorded a turnover of Rs 180 crore in 2004-05.
Mr M.S. Kapadia, Managing Director, Taj SATS, said the company has the capacity to cater 50,000 meals per day prepared at its flight kitchens at Mumbai, Delhi, Kolkata and Chennai. In keeping with the expected growth in volumes, it is planning to set up flight kitchens at Hyderabad and Bangalore as well.
The company, which has been providing catering facilities for Virgin Atlantic's flights from Delhi to London, recently bagged the contract to service the airline's newly launched service from Mumbai.
The catering company will provide one main meal (lunch) and a second service in the form of a heavy snack on the thrice-weekly service from Mumbai.
According to Mr Kapadia, Taj SATS had won the initial contract for Virgin's flights from Delhi based on a tendering process which took into account several factors, including quality.
The company now services about 30 airlines, both international and domestic.
According to Mr Kapadia, the air catering service was going through a growth phase in keeping with the resurgence in the airline industry.
However, in line with the pressure on airline expenses, costing has not kept pace with the growth in volumes. "With airlines seeking more for less, the cost per meal has come down sharply," said Mr Kapadia.
However, he did not quantify the drop in costs, stating that each meal comprised a number of ingredients. The catering company only provided the food, while the airline managed the soft drinks, wine, cheese and dry stores.
Another trend in the air catering service, he said, was the preference for high-cost food substitutes and healthy meals. A lot of R&D was going into developing low-calorie and fat-free menus, he said.
Taj SATS has a market share of close to 50 per cent on an all-India basis. Its competitors are Oberoi Airport Services and Ambassador Sky Chef.
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