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TCS buys 75.1% stake in AFS from Swissair
A Correspondent in Mumbai |
May 06, 2003 20:50 IST
Indian IT major Tata Consultancy Services has acquired a 75.1 per cent stake in Airline Financial Support Services India Pvt Ltd, a business process outsourcing outfit, from Swisssair, currently under liquidation, for a 'mutually agreed' sum.
TCS chief executive officer S Ramadorai told reporters in Mumbai on Tuesday that the Tata Sons outfit was aiming to create a single marketplace either by consolidation or stressing on core competency and this acquisition was part of its strategy to increase its business in the BPO domain.
Walter Kaelin, chief financial officer of Swissair, said that as the airline was in the liquidation process, it was selling all its assets worldwide.
Ramadorai said: "We see considerable value being added from AFS, which is a financially sound venture. TCS has been traditionally offering services in the BPO segment specially to domestic lines and with this acquisition we expect to expand its business in the country."
TCS would ramp up operations to 200 seats in the next three years on a journey to build TCS strength. TCS is one of the world largest global software and consulting services organisations.
A business process-outsourcing outfit, AFS caters to the requirements of the airline and hospitality industry.
With the acquisition of AFS, TCS is geared to take advantage of its global presence by marketing services to international airlines and hospitality industry.
AFS, which would be an integral part of TCS, will be the centre of excellence in TCS's BPO offerings for airline/hospitality industry.
Swissair, the airline which has closed down, had 75.1 per cent stake in the joint venture company with Tata Sons Ltd having 24.9 per cent stake. The company was formed in 1992 and was catering to the airline and hospitality industry.
On future plans, Ramadorai said TCS would expand core offerings to the transportation industry, including airline, shipping and railways.
AFS has a staff strength of 400 and TCS would absorb the staff and embark on a strategy to increase the strength by another 1,600 in three years time.
AFS had posted revenues of Rs 24 crore (Rs 240 million) in 2002 and was concentrating on revenue accounting passenger and cargo apart from price support and fare billing systems. The company is also into yield management system and loyalty programme administration.
According to studies by Gartner and McKinsey, the airline BPO segment was growing and is expected to touch Rs 200 crore (Rs 2 billion) by 2009.
Additional inputs: PTI