Airports bank on duty-free retail shops as passenger traffic falls

The fall in air passenger traffic has had adverse consequences on businesses that are linked to air travel.
Last week, the Airports Authority of India (AAI) was forced to extend the deadline for tenders it had issued for three-year duty-free retail contracts, at high passenger traffic airports like Trivandrum, Jaipur, Lucknow, Srinagar and Coimbatore, due to no response from retailers. AAI has extended the deadline for requesting documents from July 18 to August 4, and the deadline for tender submissions has been extended from July 23 to August 11, and now to September 25.
At Coimbatore, 14sq m (151sq ft) of space is on offer as opposed to the original 9sq m (97sq ft). New planned international terminals at Jaipur and Trivandrum airports have meant that new space will soon be available—at Jaipur there will be 26sq m (278sq ft) on the ground floor and 40sq m (430sq ft) on the second level, while at Trivandrum there will be 40sq m in arrivals and 51sq m (549sq ft) in departures. These spaces will replace those cited in the original tender documents once the terminals are opened.
AAI has also highlighted a clause in the tender notice that specifies that if the airport is privatised or leased out, the new airport company will be bound to uphold the remaining duration of the contract. According to this document, Trivandrum handled 11,86,160 arriving and departing international passengers in 2006-2007 and Jaipur handled 195,711.
During the same period, Lucknow handled 130,002,
Srinagar 17,519 and Coimbatore 14,730.
In terms of space licence fees, Trivandrum Airport will cost $69 per square metre, per month, while in the case of Jaipur, Lucknow, Srinagar and Coimbatore airports the cost will be $44.00 per square metre, per month.
16/08/08 Shauvik Ghosh, Shauvik Ghosh/Financial Express

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Categories: Airports Aug 2008