In-flight catering joins airline boom

Taj Sats, Ambassador Sky Chef & Oberoi Flight Catering are on a expansion spree.

With the aviation industry booming, in-flight caterers like Taj Sats Air Catering, Ambassador Sky Chef and Oberoi Flight Catering Services are expanding their operations like never before.

The Sanjay Narang-owned Mars Restaurant (which owns restaurants like Dosa Diner, Not Just Jazz by the Bay, Birdy's and Roti) is exploring the possibility of winging its way into the business.

The Rs 75 crore Ambassador Sky Chef, part of the Ambassador group that owns the Ambassador Hotel in uptown Mumbai, is looking at setting up units in Hyderabad, Ahmedabad and Amritsar.

At present, the company has two units in Mumbai and Delhi, which cater for its clients. Says the company's vice-president, operations, Kishore Bhutani, "As airlines cover more destinations today, we are expanding our infrastructure."

The company is looking at entering into a strategic alliance with an international airline catering company.

"We are exploring all options, including a joint venture. However, at this stage, I cannot divulge any more details," Bhutani added. The total investment in the new units will be around Rs 50 crore.

The Taj group of hotels has a joint venture with Singapore Airport Terminal Services, part of Singapore Airlines, and is on an expansion spree. With a market share of over 60 per cent, it is the leader in the business and is aiming at a turnover of Rs 150 crore in 2004-05.

Taj Sats operates four units in the country and is planning to set up new units in Hyderabad, Bangalore, Amritsar and Ahmedabad. A Taj group executive attributes the growth in the sector to several factors.

"The open skies policy, under which private airlines have been permitted to operate internationally, and competitive airfares owing to an increase in capacity have helped," he says.

The Oberoi Flight Catering Services, too, is upgrading its facilities. Although it used to supply food to airlines from its hotel premises (in Kolkata, it operates from the Oberoi Hotel's premises), it is now setting up a centre in Chennai to cater to the increased demand. Its other units are in Mumbai and Delhi.

Still, an industry analyst reckons that the price war in the airlines industry, coupled with the no-frills airlines that will crowd the skies will ensure that the air catering business will be more about volumes than fat profits.

Fine dining at 30,000 ft

TAJ SATS: The market leader; planning units in Hyderabad, Bangalore, Amritsar and Ahmedabad

AMBASSADOR SKY CHEF: To set up units in Hyderabad, Ahmedabad and Amritsar. Has a presence in Mumbai and Delhi

OBEROI FLIGHT CATERING: Setting up a centre in Chennai, other units are in Mumbai and Delhi

NEW PLAYER: Mars Restaurant, planning an entry soon