Thursday, December 10, 2020

'Many concessionaires terminate contracts at Mumbai airport'

New Delhi: Airports in recent years had become malls with aerobridges but Covid has dealt a body blow to shopping there. The sharp decline in footfalls at airports and those flying preferring to remain masked up behind shields and not touching anything has meant sales of both food and beverage (F&B) and retail has nosedived.

Just how bad the impact is becomes clear from Mumbai Airport informing the Airports Economic Regulatory Authority (AERA) about a large number of shops at Chhatrapati Shivaji Maharaj International Airport (CSMIA) shutting down.

“Various concessionaire had approached the company (Mumbai Airport Pvt Ltd or MIAL) for resetting of terms of contract due to severe adverse impact on passenger traffic and cargo tonnage due to Covid-19. Out of 401 concessionaires, 54 have already terminated contracts due to prevailing force majeure. In case of retail and duty free, out of 187 concessionaires 35 have terminated the contracts representing 75% of the revenue earned by MIAL from these concessions,” Mumbai airport has told AERA.

While the operator of India’s second busiest airport says it has “extended relief to concessionaires for FY21.… since impact of Covid-19 may be for a long term, it is expected that further demand from concessionaires for reliefs will be forthcoming.”

Speaking about the impact on non-aero revenue streams like sales at duty free, F&B, retail, passenger services and flight kitchen, MIAL says: “There is substantial reduction in number of passengers in both domestic and international segments. (Impact) much more severe in case of international passengers. There is also a change in profile of passengers. Business and leisure travel is negligible which also affects sales per passenger.”

The Mumbai airport earned a revenue of Rs 1,149 crore in FY 2019-20 from streams like F&B, retail, duty free, car parking and flight kitchen. It projects that will fall 86% to Rs 162 crore this fiscal (FY21). The projections for FY22, FY23 and FY24 for revenue from this head is Rs 493 crore, Rs 643 crore and Rs 763 crore, respectively as per the information given to AERA.

“Even while flying majority of passengers prefer to remain masked up and the sale of F&B onboard is not even close to pre-pandemic times. A regular flyer told me she does not eat onboard during short or medium domestic flights because ‘dar lagta hai’ in taking off the mask and shield to eat or drink,” said an airhostess of a low cost carrier.

10/12/20 Saurabh Sinha/Times of India

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