Comments
In a bid to capitalise on the surging demand for air travel, EIH Limited, the hospitality arm of The Oberoi Group, is mulling setting up flight kitchens at Noida International Airport or Navi Mumbai Airport. The company’s recent financial report for Q2 FY24 revealed a record-breaking revenue of ₹100 crore from its flight services and airport lounge segment, boasting an impressive 37 per cent margin—a figure nearly doubling from the previous year.
Vikramjit Singh Oberoi, MD & CEO of EIH Limited, expressed optimism about the future, citing robust fundamentals in the aviation industry and escalating demand for both domestic and international air travel in India. “We think any business associated with that, and flight kitchens being one, will benefit from that strong demand,” he affirmed.
During the post earnings call, Kallol Kundu, CFO, EIH Limited, said, “In all the locations where we are present, we definitely evaluate but one must also look at the composition of the domestic business, the lead time, and all of that. So, at the appropriate time and if we see that the business is aligned to our business model and works in terms of cost, we would definitely look at any opportunity, including Noida and Navi Mumbai.”
This news follows Taj SATS’s recent announcement of its plans to establish a flight kitchen at Noida International Airport.
Oberoi Flight and Airport Services currently operates in key locations such as Mumbai, Delhi, Chennai, and Kolkata. The company’s flight and airport catering business witnessed remarkable growth, with revenues escalating from ₹45 crore in Q1 FY23 to ₹100 crore in Q2 FY24, accompanied by an impressive EBIDTA margin of 37 per cent.
Kundu shed light on the company’s clientele, stating, “Majority of the airlines are international. In the domestic sector, Calcutta has performed exceptionally well, and our lounges in Bombay and Delhi continue to thrive. However, our overall focus is more on international flights.”
During the Q1 FY24 earnings call, EIH Limited had indicated its intention to optimise kitchen capacities. Kundu remarked, “Currently, if you were to reverse it, the capacity utilisation is still way less than the potential. With flights increasing, going full, and more destinations being added, the unutilised capacity will likely be utilised further.”
As EIH Limited continues to ride the wave of increasing air travel demand, its strategic expansion into flight kitchens aims to position the company as a key player in catering services for the aviation sector. With an industry-leading margin and a focus on aligning with market demands, EIH Limited appears well-poised for sustained growth in the evolving landscape of hospitality and aviation.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.