Tatas-SIA joint venture in air-catering

By Our Special Correspondent

NEW DELHI, JULY 18. The Tatas are strengthening their ties with Singapore Airlines by proposing a joint venture in the air- catering sector with an SIA subsidiary company. Negotiations are in the final stages though the formal documents have still to be signed.

The board of directors of the Indian Hotels Company Limited (IHCL) has disclosed that the company is negotiating with the Singapore Airport Terminal Services Limited (SATS) to form a new joint venture company which will handle the IHC's air- catering business. The company will be a 51:49 joint venture between the IHCL and SATS, a subsidiary of Singapore Airlines listed on the Singapore Exchange.

In a cautious statement, the IHCL today said ``the terms governing the transaction have not yet been finalised. The IHCL and SATS will make further announcements in due course when the parties have executed definitive legal documents''.

The proposed joint venture will ensure that the Tatas can draw on the SIA's wide experience and expertise in the area of air- catering. The SATS is a major provider of inflight- catering and ground-handling services in Asia. It is has over 50 years of experiences in this business and a presence in eight Asian airports through several joint ventures. Its inflight meal catering facilities in Singapore have a daily output of over 60,000 inflight meals per day.

Incidentally, the company notes that the Taj group which now handles about 38,000 meals per day in this country already has a successful joint venture with SATS in Chennai.

It says that the Taj Group's air-catering business consists of air-catering units and airport restaurant businesses in major metro cities throughout the country. The Taj group has about 55 per cent market share in this business.

The purpose of the alliance, it is stated, is to enhance to even higher global standards, the Taj Group's air- catering business. The new company will also be in a position to exploit the growth opportunities presented by the liberalisation of the aviation sector and the increasing expansion and upgrading of India's commercial aviation facilities.

The SAT's participation will give the company access to expertise in technology, process design and training and development.

For the SATS, the venture will expand its presence in inflight- catering at key airports in India and fortify its position as a major player in the business.

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