Here's how SATS could benefit from Qantas' Singapore comeback

Catering and ground handling revenue could climb 3%.

SATS could be in for a feast following Qantas Airways' recent change of transit hubs, according to UOB Kay Hian.

Qantas previously announced that from 18 March, it will shift its transit hub from Dubai to Singapore for its kangaroo routes. Consequently, its Sydney-London service will transit out of Singapore.

UOB said there is a strong chance that their airways will choose SATS for its inflight catering, ramp handling, and cargo handling services, instead of Dnata.

Moreover, SATS is free from ownership from a competing airline and already provides ground handling and catering to Jetstar Asia.

Qantas will add 3,288 one-way seats from Singapore to the UK and 3,806 seats from Melbourne to Singapore.

UOB analyst K Ajith said SATS could benefit from these routes that will need more unit meals and support for wide-bodied aircraft that could boost revenue.

SATS' local inflight catering and ground handling revenue could be pulled up by 3% and boost revenue.

Meanwhile, the upcoming launch of Norwegian Air 4x flights to Gatwick, UK could also benefit the catering company as it will need 1,720 additional weekly seats.

Ajith said, "Here again, we believe that SATS is likely to emerge as the preferred inflight caterer (yes, Norwegian Air offers meals) and ground services provider, due to the fact that it is not aligned with a competing carrier."

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