TajSATS sees business recovery as govt lifts curbs on in-flight service

The company is also expanding its non-aviation portfolio and is using automation and data analytics to drive cost efficiencies, says CEO

Resumption of meal services on short-duration domestic flights is fuelling business recovery, Manish Gupta, chief executive officer of TajSATS has said. The company is also expanding its non-aviation portfolio and is using automation and data analytics to drive cost efficiencies, he added.

TajSATS is a market leader in the in-flight catering segment and its business has been severely impacted due to the Covid-19 pandemic. The government prohibited airlines from serving or selling meals on flights less than two hours duration in April as India faced the second wave of the pandemic. Last month the restriction was lifted bringing cheer to the airline catering companies.

“The easing of international travel restrictions in the bubble arrangement and serving food on board being permitted again is good news for us. The resumption of on board meal services on domestic flights for less than two hours has also fuelled recovery,” Gupta said in an email response.

While domestic airlines resumed operations in May 2021 after a two-month lockdown, uplift of hot meals began only in the second half of the financial year. Fewer flights and tighter regulations regarding on board service delivery also impacted business. While TajSATS managed to win all India business of two low-cost airlines, on a year on year basis its consolidated revenue declined 61 per cent to Rs 149 crore in FY 2021. According to its annual report, it made a net loss of Rs 59 crore as against a profit of Rs 22 crore in FY 2020.

To tide over the challenges, TajSATS got into non-aviation segments and launched a multi-cuisine virtual brand Anuka that is available on the Taj group’s food delivery app Qmin. Non-aviation business accounted for 20 per cent of TajSATs total revenue in the last fiscal.

“We also diversified into catering for film shoots and are now serving leading production houses,” Gupta said.

In the last fiscal the company also initiated various cost optimisation measures, which enabled it to save around 30 per cent costs in areas of payroll, repairs and other operational expenses in comparison to FY 2020. At the same time, there was also a strong focus on collections and the company was successful in collecting 80 per cent of receivables during the year.

“We are driving the company with differentiation, durability and cost-effectiveness. The associated shift has been to an environment of technology, automation, data, analytics and cost resilience,” Gupta added.