Oberoi Hotels and Resorts, managed by EIH, sees “no chance” of re-entering its airport lounge business in Mumbai and will focus on in-flight catering segment instead to make up for the lost revenue.
Oberoi Hotels and Resorts exited the airport lounge business following discontinuation of the lease period for the Mumbai airport, operated by the Adani Group.
“The lounge business has been concluded by the end of the financial year (FY25), and it is no longer there. It was supposed to end sooner – halfway through the last financial year – but there was an extension,” Vikram Oberoi, managing director and CEO, EIH, said in an analyst call post the announcement of the March quarter results.
The airport lounge operation was one of the ancillary business units of the 75-year-old hospitality group. While it generated Rs 122 crore in revenue in FY25 — just 4.4% of EIH’s total operating income of Rs 2,743 crore – it was a very profitable business. “It is extremely profitable,” Oberoi said in a previous call.
The lounges at the terminal 2 of the Chhatrapati Shivaji Maharaj International Airport, Mumbai, are now run by TFS, a Mumbai-based company.
When asked if EIH will have a re-look at the segment, Oberoi said, “There is no chance of renewal of that business. What’s happening with Mumbai airport is that it is all being consolidated with the airport operator and that’s part of their overall strategy.”
EIH hopes to offset the loss in revenue by focusing on its in-flight catering business. During FY25, the Oberoi Flight Services unit generated Rs 490 crore in revenue, nearly 20% of its consolidated top line.
“We see strong demand for the airline catering business and I hope we can offset most of that (loss from the shutdown of lounge business). Our endeavour will be to compensate for the loss of the lounge business through buoyancy and increased business for the in-flight catering business,” Oberoi added.
In August last year, IndiGo, India’s largest airline, selected Oberoi Catering Services to provide meal options on board for customers of its business class – ‘IndiGo Stretch’.