AVIATION, FOOD & BEVERAGE | Staff Reporter, Singapore

SATS' in-flight catering to grow 25% from Turkish Airlines ties

If the deal goes through, the joint venture will form the world's largest kitchen.

In a presentation with UOB Kay Hian, SATS again indicated that the new Istanbul airport and the kitchen will be the world’s largest if the deal goes through.

According to an analysis, Turkish Airlines will have a 50% share in the JV. SATS’ in-flight catering revenue could grow by about 25% on a consolidated basis.

The company said that Turkish Airlines has limited connectivity within Asia.

UOB Kay Hian analyst K Ajith commented, "As connectivity improves, SATS could leverage on this via its own exposure in Singapore, Malaysia, Maldives, Taiwan, Philippines, Indonesia, India, Hong Kong and China."

Presently, Turkish Airlines accounts for 70% of pax throughput out of Atartuk airport and will thus be a major customer.

Vienna-based DO&Co is the current caterer at Atartuk and we estimate that Turkish Airlines’ in-flight catering revenue out of Atartuk could account for 30% of its revenue.

“Impact to bottom line, will depend on SATS’ ability to achieve cost efficiency,” K Ajith said. “Notably, DO&Co’s EBIT margin is approximately half of SAT’s in-flight catering revenue out of Singapore and Japan.”

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.