Thursday, March 30

Airport retail therapy takes off

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Retail and F&B choices are tipped to play a larger role in the travel experience from Calcutta airport as earnings piloted by non-aviation revenue provide the tailwind for rapid expansion.

In 2017-18, retail, F&B counters and advertising within and outside the integrated terminal had accounted for 20 per cent of the airport’s earnings, encouraging the authorities to think bigger.

“We are planning to add more retail and F&B space,” airport director Atul Dixit said. “The major airports are all focusing on non-aviation revenue. Increase in airport charges can raise aviation revenue, but that would mean putting more burden on passengers.”

Aviation revenue includes rent paid by airlines, user fees, and aerobridge, landing and parking charges. Airlines also pay the airport for use and maintenance of other facilities.

Non-aviation revenue in 2017-18, which includes earnings from retail, F&B and advertising, rose to Rs 265.07 crore from Rs 198.65 crore during the previous year and Rs 193.34 crore in 2015-16.

Airport officials said the figures were proof that the retail and F&B spread introduced in 2016 had started paying off.

The airport currently has more than 11,000sq ft across the departure and arrival sections dedicated to retail. This layout comprises 30-odd stores.

“Passengers flying out, arriving in the city or having a stopover used to be deprived of the retail experience that is an integral part of modern air travel. Now that we have a decent offering, the response has been positive,” one of the retail operators said.

According to an airport official, stores selling perfumes, chocolates and jewellery have been doing consistently well. “The revenue growth through retail could have come much earlier with better planning,” he said.

Airports across the world now rely more on earnings through retail than various aviation charges. In India, the Airports Economic Regulatory Authority regulates tariff and other charges for use of aviation facilities.

“Since aviation charges are regulated, there is no scope for a private operator to increase earnings through that avenue. Giving space on hire to retail and F&B stores helps earnings explode,” said an official at Mumbai International Airport Ltd, which has 21,400sq ft of retail and F&B space in Terminal 2.

Source: The Telegraph

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