New caterer heats up competition at JKIA
The entry of an international airport catering-services provider is set to stoke ferocious competition in a field that has for long been dominated by Nas Servair.
This follows the signing of a deal between German firm LSG Sky Chefs and the Kenya Airports Authority to provide in-flight catering services at the Jomo Kenyatta International Airport.
The company is eyeing a piece of the multi-billion shilling deal that has previously been a preserve of Nas associated with the Philip Ndegwa family that has a stranglehold on corporate Kenya deals.
LSG Lufthansa Service Holding, headquartered in Neu-Isenburg Germany, plans to deliver the services through LSG Sky Chefs in a deal said to have received the backing of local investors led by former lawmaker Matu Wamae.
Mr Wamae, the current chairman of New KCC, is said to have entered into partnership with Drummond Investment Bank chairman Ndung’u Gathinji to lure the German multinational into the in-flight catering business at the airport.
Its entry now breaks the monopoly in in-flight airport catering and enhances competition, which is likely to be fought on quality of service.
“The airport needs competition. It is good to have competition,” is all Mr Wamae said when the Daily Nation contacted him.
LSG Sky Chefs now plans to invest about Sh435 million ($5 million) in the business at the airport while KAA is expected to earn concession fees from the deal, further diversifying its revenue streams.
“It will enable KAA to generate additional income from concession fees and land rental to the second in-flight caterer, which will boost the proportion of the authority’s income from non-aeronautical streams,” said KAA managing director Lucy Mbugua.