AUSTRALIA. Cairns Airport has issued an open tender for its Terminal 1 duty free concession, currently held by JR/Duty Free.
The concession covers Arrivals and Departures duty free. Bids close on 25 August 2016.
The incumbent is JR/Duty Free, which was awarded the contract in November 2011, beginning operations in March 2012 and expiring in February 2017. Its long-time predecessor The Nuance Group chose late in the piece not to defend the contract last time around.
- Tender details: For information contact Diane Owens, Business Development Manager Commercial NQA, diane.owens@cairnsairport.com.au or +61 467 062 187.
Possible bidders this time include Lagardère Travel Retail, which has been building a strong specialist store presence at the airport, including in recent months a MAC boutique, The Travel Store, and an eyewear concept as well as a growing food & beverage presence; and Heinemann Asia Pacific, which operates at Sydney Airport and may desire more critical mass.
Incumbent JR/Duty Free reluctantly chose not to take up its three-year renewal option, based on profitability concerns over passenger numbers since 2012, which it believes have been substantially below those forecast in the 2011 RFP. But while JR believes it to have been an unsuccessful contract, the fiscally prudent family-owned retailer is likely to be keen to defend its presence in a region it believes in, provided it can make the numbers work.
Dufry, which now owns Nuance, the operator at Melbourne Airport (a location where it is widely believed to have extended its contract) and Aer Rianta International, one of two duty free retailers at Auckland Airport across the Tasman Sea in New Zealand, are other potential candidates. Additionally two, possibly three Korean retailers – Lotte Duty Free, The Shilla Duty Free and Shinsegae Duty Free – could enter the fray. DFS has a downtown Galleria in Cairns, so will certainly examine the opportunity at least.
Cairns Airport is the gateway to the regional city of Cairns, Australia’s famous Great Barrier Reef and surrounding North Queensland attractions including World Heritage tropical rain forests. It is Australia’s seventh-busiest airport in terms of international passengers with direct flights to and from Auckland, Tokyo, Osaka, Hong Kong, Singapore, Manila and Port Moresby and seasonal flights to and from Shanghai and Seoul (the latter commencing December 2016).
General Manager Commercial Fiona Ward said the past year has seen “stunning” figures for international passenger growth as several new aviation services came on line. “In the year ending May 2016 T1 welcomed 697,000 passengers, who were eligible to make duty free purchases. This is an increase of +22%, or 127,000 passengers, over the year ending May 2015,” she said.
“We’ve seen particularly strong growth in transit passengers. They comprise 10% of the individual passengers through T1 and their numbers have increased +40% in the past year with the new services coming online.
“Among those we have welcomed in the past 15 months is the SilkAir service from Singapore. This originally triangulated with Darwin but after the first year of operation is now delinked to provide fully direct flights. This service brings travellers from Singapore, Europe and South East Asia as well as connecting with the burgeoning Indian visitor market.
“Jetstar commenced direct flights to Bali, which are proving popular not only with local holidaymakers but as a connecting service for overseas visitors, particularly Europeans. Philippine Airlines are operating flights from Manila through to Auckland via Cairns, adding a completely new city pair as well as providing a year-round link with New Zealand, to build on the existing seasonal Air New Zealand service.”
“Hong Kong Airlines commenced a seasonal service in January this year and in May it become year round, adding to the long-standing Hong Kong service provided by Cathay Pacific, and significantly extending Cairns’ connection into the mainland China visitor market. The Cathay service carries many passengers traveling to and from Europe and other parts of Asia as well as Hong Kong.
“Jetstar operate direct flights from both Tokyo and Osaka, meeting demand of the restrengthening Japanese market into Cairns. The Port Moresby route is serviced by both Air Niugini and Qantaslink where the focus is on resources industry and government related travel.”
Ward continued: “The China Eastern seasonal service from Shanghai and the recently announced JinAir seasonal service from Seoul give many thousands of passengers direct connections to Cairns and the Great Barrier Reef region, which is becoming an increasingly popular destination for the Asian New Year period.
“We look forward to welcoming the successful new duty free tenderer to Cairns Airport to help us provide our international passengers with an excellent experience as they arrive and depart Cairns and the Great Barrier Reef region.”
Ms Ward thanked JR/Duty Free, whose store openings included the first-ever walk-through Departures duty free store at Cairns Airport.
“JR/Duty Free has enhanced Cairns Airport’s duty free offer over the past four years to meet the unique demands of our existing and new international markets,” she said. “I thank them for the contribution they have made to enhancing the Cairns Airport experience for our passengers.”
NOTE TO AIRPORT AUTHORITIES: The Moodie Davitt Report is the industry’s most popular channel for launching commercial offers and publishing the results. If you wish to promote an Expression of Interest, Request for Proposals or Tender, simply e-mail Martin Moodie atMartin@MoodieDavittReport.com
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