Airports Authority of India anticipates more tenders

The Airports Authority of India (AAI) has revealed it is to expand duty-free operations to its other international airports in the country via a tender process following the award of concessions across nine airports to Flemingo International last month.

DFNI online asked Chennai International airport director Deepak Shastri what the next step was for AAI: “At present, we look forward to expanding our duty-free shops to other airports having international operations, through tender process.”

He added AAI plans to develop retail/duty-free “in a way to provide maximum options to the travelling public and also to exploit huge potential it has on offer to enhance our revenues through these activities”.

India’s international airports include the recent nine concessions awarded to Flemingo: Chennai, Kolkata, Calicut, Trichy, Mangalore, Goa, Ahmadabad, Amritsar and Lucknow airports, as well as Guwahati, Varanasi, Jaipur, Trivandrum, Combatore, Tiruchirapalli, Srinagar, Nagpur, Mumbai, Delhi, Hyderabad, Bengalaru and Cochin.

Delhi, Hyderabad, Mumbai and Bengalaru airports have been developed as public-private partnerships (PPP), the former pair by a GMR-led consortia and the next two by GVK-led consortia. The four airports accounted for 53% of total passenger traffic handled by Indian airports in FY2014, according to CAPA India. Cochin International Airport Limited (CIAL) was the first airport in India to be built under a PPP.

Shastri said the current demand for duty-free and access to international brands in India’s airports was “good and growing”. He said: “The growth in passenger traffic is double digit (>10%) and [with] better options available at airports both in retail and duty-free portfolio, more and more passengers are now reporting to airport shopping. With robust growth forecast, this market is certainly promises to be significantly important to AAI.”

Regarding the decision to award the concessions to Flemingo, Shastri pointed to its experience in operating duty-free at many airports including those operated by AAI and their “fairly good business relations”.

He added: “I am sure, Flemingo, by virtue of its presence in many AAI airports, will participate [in the upcoming tenders] and we will be more than glad to welcome them in more airports, if they emerge victorious in our fair and transparent tendering process.”

The contract duration for Flemingo’s nine concessions is seven years, apart from the Trichy concession which runs for 10 years. Flemingo International also operates at Trivandrum and Jaipur airports and manages the operations of Mumbai Duty Free with joint-venture partner DFS Group.

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