Oberoi Hotels and Resorts Shifts Focus from Mumbai Airport Lounges to Expanding In-Flight Catering to Counter Revenue Losses

Published on May 29, 2025

Oberoi Hotels and Resorts, managed by EIH, has announced that it will not be re-entering the airport lounge business in Mumbai, despite the previous success it had in this sector. The company, instead, intends to shift its focus to the in-flight catering industry to offset the revenue loss caused by the closure of its airport lounge operations.

The decision to exit the airport lounge business came after the expiration of its lease for the lounge at Mumbai’s airport, which is now managed by the Adani Group. The closure was initially expected to happen earlier, midway through the financial year (FY25), but it was delayed with a lease extension. Ultimately, the business ceased operations by the end of FY25, marking the end of Oberoi’s involvement in airport lounge services at Mumbai International Airport.

While the lounge operation was not a major contributor to the company’s total revenues, it remained a highly profitable part of the business. The segment generated Rs 122 crore in revenue during FY25, accounting for just 4.4% of the company’s total operating income, which amounted to Rs 2,743 crore for the same period. Although the lounge business represented a small percentage of the overall revenue, it was known to be extremely profitable, contributing significantly to the bottom line.

In response to the question of whether Oberoi Hotels and Resorts would reconsider its involvement in the lounge business, the company made it clear that it had no plans to renew or re-enter the segment. The company noted that the operations at Mumbai airport have now been consolidated with the airport operator’s broader strategy. This consolidation meant that the airport lounge business would no longer be a viable independent operation for Oberoi, as all such services are now integrated into the airport’s overall management and operational framework.

While the loss of the lounge business is a blow to Oberoi Hotels and Resorts, the company has a plan to offset this revenue decline by focusing on its in-flight catering business, an area where it sees continued growth potential. Oberoi Flight Services, the in-flight catering division of the company, experienced a notable rise in revenue during FY25, generating Rs 490 crore, which accounted for approximately 20% of the company’s overall revenue. This robust performance demonstrates the demand for high-quality catering services in the aviation industry and reflects the company’s strong position in this competitive market.

The shift in focus to the in-flight catering business comes at a time when airlines and passengers are increasingly prioritizing premium services, especially in business and first-class offerings. As more airlines seek to elevate the customer experience, the demand for specialized and high-quality catering services has seen a sharp rise. Oberoi Hotels and Resorts intends to capitalize on this trend by expanding its catering offerings and strengthening its position as a leader in the airline catering market.

In fact, the company has already secured significant business within this sector. Last August, IndiGo, India’s largest airline, selected Oberoi Catering Services to provide meal options for its business class, known as ‘IndiGo Stretch.’ This contract marked a key milestone for Oberoi in its pursuit to broaden its presence in the in-flight catering industry. By partnering with major airlines, Oberoi is well-positioned to grow its catering services and replace the revenue lost from the exit of the airport lounge business.

The shift to in-flight catering is part of a broader strategy to focus on high-margin business segments where the company can leverage its culinary expertise and hospitality experience. Oberoi Hotels and Resorts aims to maintain its reputation for excellence and deliver premium services that meet the evolving demands of modern travelers.

While the exit from the airport lounge business may have been a difficult decision, the company is optimistic that its growing in-flight catering business will help mitigate the loss of revenue and strengthen its position in the hospitality sector. Oberoi Hotels and Resorts is committed to remaining a key player in the luxury hospitality industry and will continue to seek opportunities for growth and innovation in the years to come.

This strategic pivot highlights the company’s agility and its ability to adapt to shifting market dynamics. By focusing on in-flight catering, a growing and profitable segment, Oberoi Hotels and Resorts is positioning itself to continue thriving in an increasingly competitive and evolving hospitality landscape.