TajSATS mulls network expansion to drive growth

TajSATS is evaluating the expansion of its in-flight kitchens network amid surge in international air traffic and rising demand for airline meals.

TajSATS, which has a market share of nearly 60 per cent, is a part of Indian Hotels Company Ltd. Currently it operates kitchens at seven locations. While an in-flight kitchen in Amritsar became operational in January, a new facility at the airport at Mopa in Goa, is ready for launch very soon.

“We would like to expand our operations at more airports, and we are exploring further development opportunities at cities with growing air traffic,” said Manish Gupta,TajSATS chief executive officer.

The expansion plan comes in the backdrop of a record performance in the first quarter of FY 2024. TajSATS’s revenue grew almost 55 per cent to ₹205 crore while operating profit zoomed by more than two and half times to ₹50 crore on a year-on-year basis.

Growth drivers

While revenue growth was led by increasing share of international flights and upgraded meal offerings; synergies in common contracting with parent IHCL helped save costs and boost margins.

“An international flight is more lucrative than a domestic one as typically two or three meals are uplifted per passenger. Also, there has been an upgrade in overall meal offerings with airlines reintroducing premium choices like seafood, international cheeses and Swiss chocolate based desserts, etc, for their premium classes. Airlines are also looking to improve overall meal experience for their customers and this has surely helped improve our yields,” Gupta said.

Overall traffic handled by Indian airports grew 73.3 per cent y-o-y in FY 2023. While domestic traffic rose by 62 per cent, international traffic at Indian airports rose 2.5 times in the same period. Non-stop flights have been restored to most countries except China, Spain and Sweden.

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Among the domestic airlines, Air India too is seeing growth in its market share with restoration of grounded planes.

Gupta said growth in charter flights too has contributed to the company’s revenue growth, though this is still to match up to pre-pandemic levels in markets like Goa due to the ongoing Russia-Ukraine War.

“We are very excited about the opportunities like QSR and institutional catering, where the demand has been quite robust post the pandemic,” he added.

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