SPAIN. AENA plans to tender the duty free contracts at 26 airports across its Spanish network in the fourth quarter of 2022, with new concessions to begin on 1 November 2023. Incumbent Dufry’s contracts end on 31 October 2023, after AENA opted not to exercise the option of a two-year extension to 2025 (see below).
The airports group shared the news with The Moodie Davitt Report before releasing it to other media later on Friday, noting that the business at Spain’s airports is “one of the largest in the world” in terms of duty free turnover.
AENA said it will begin the process by selecting an advisor to draw up the tender strategy and plan the contractual relationship with potential partners.
Through this process, AENA said it would identify its favoured business model with several key objectives in mind. These include establishing “the most suitable contractual relationship and attracting the largest number of international operators possible”. AENA said it also aims to diversify the business, adapt to changing trends among passengers and industry business models, and develop and implement new technologies across the operations.
The advisory contract, which AENA said is valued at €4.6 million, will run for up to 36 months and will include the preparation, drafting and tracking of the tender documents and the bidding process.
The advice will comprise several phases: an initial analysis of the duty free business at global level to establish the bidding and contract relationship strategy; and the subsequent drafting of tender documents, along with advisory services during the bidding process.
Through Dufry, AENA currently has four duty free contracts across 26 airports, with 88 points of sale occupying more than 43,000sq m.
As reported, airports in the AENA network served nearly 120 million passengers in 2021, representing a +57.7% increase year-on-year but just 43.6% of pre-pandemic 2019 traffic.
Background
In September 2019, AENA announced an extension to Dufry’s concession for up to five more years, as its contract at the time was due to expire on 31 October 2020.
That extension included an initial duration of three years to October 2023 (currently in force) and an option to further extend the agreement in two steps of one year at a time, in parallel with an investment programme in the stores.
However, last November, AENA said that it would not extend any contracts affected by a new law that changed the basis on which concession fees are calculated at its airports during the COVID-19 crisis.
That law, which came into force in October after approval by the Spanish Congress of Deputies (Parliament), stated that the Minimum Annual Guaranteed rents (MAG) payable at Spanish airports were not owed for the period between 15 March 2020 and 20 June 2020. In addition, these have been proportionally reduced from 21 June 2020 onwards by comparing the lower volume of passengers at the Spanish airports to 2019 passenger levels. This formula will stay in place until passenger numbers return to those that match 2019.
Speaking to investors in November, AENA confirmed that the company would abide by the law, but would not renew any contract that bound it to reduced rent.
As it did not enact the two-year extension option in Dufry’s contract, the retailer’s tenure will end on 31 October 2023.
More on that story can be found here.
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