TajSATS looks to diversify to beat slowdown

May also venture into quick service restaurants

In an effort to mitigate the effects of the slowdown in the travel and hospitality industry, the Tata Group’s airline catering arm is planning to diversify into supplying large institutions and restaurants.

The company, TajSATS Air Catering Ltd, may also set up Quick Service Restaurants (QSRs or fast food restaurants), and studies are currently on to this end, say sources close to the developments.

TajSATS is a joint venture between Indian Hotels Co Ltd (IHCL), which operates luxury hotel chain Taj Hotels Resorts and Palaces, and SATS (formerly Singapore Airport Terminal Services). It provides in-flight catering services in Mumbai, Delhi, Chennai, Kolkata, Amritsar, Goa and Bangalore, and manages airport lounges in Mumbai and Chennai.

With its new venture, the company will supply food to corporate entities, outdoor events and coffee chains such as Costa Coffee and Tata Starbucks (a joint venture between Starbucks Corp and Tata Global Beverages).

The Tata group company, which supplies a variety of cuisine, including Indian, Chinese, Thai, Oriental and Mexican, will use its seven units across the country to support the venture.

“The move is to mitigate the slowdown in the industry,” said one of the sources.

A company spokesperson confirmed the diversification plans but declined to provide a timeline or details on investments. The spokesperson also declined comment on the QSR initiatives.

“The entire foods sector is growing at a healthy pace and TajSATS is in a position to… tap this opportunity,” the company said in an e-mail reply.

According to IHCL’s annual report, TajSATS posted a net loss of Rs 75 lakh for the financial year ended March 31, 2013. Its registered revenues, according to company sources, dipped to Rs 229 crore from Rs 244 crore a year ago.

Eye on QSRs

The company is also planning to set up QSRs banking on its experience both in the hotel and catering business. However, this is at a nascent stage and yet to be discussed at the board level, company sources said.

TajSATS is also looking at expanding services to cities such as Nagpur, Ahmedabad, Kozhikode and Kochi.

rahul.wadke@thehindu.co.in

rajesh.kurup@thehindu.co.in

TajSATS looks to diversify to beat slowdown