NORWAY. State-owned airports company Avinor has launched a competitive tender seeking potential partners to manage the duty free and single-price (Travel Value) shops at Norway’s leading airports, under a five-year contract from January 2023.
The estimated total value of the contract is NOK36 billion (around €3.6 billion) in turnover over the term from 2023 to 2027. [Note: The projected turnover figure has been adjusted from €3 billion, as published previously, due to updated passenger forecasts -Ed].
Such is the prize that it has excited the interest of many leading travel retailers, not only those based in Europe but around the world. Further details appear through the tender banner link on our home page.
The shops, which are currently managed by Gebr Heinemann-led Travel Retail Norway, are located at Oslo, Bergen, Stavanger, Trondheim, Kristiansand, Ålesund, Tromsø, Bodø, Harstad/Narvik, Molde and Kristiansund airports.
In an interview with The Moodie Davitt Report, Avinor Executive Vice President for Commercial Areas Joachim Lupnaav Johnsen underlined how attractive the opportunity is for travel retailers.
“The average duty free basket size in Norway is very large, compared to what you will find in almost any other market. This contract therefore stands as a lighthouse in the world of duty free because it is very profitable. The core shopping nationality is one of the wealthiest in the world and Norway is likely to be among the first economies to recover from the crisis, because of its assets and its wealth. The catch-up effect is going to be very strong.”
Avinor is making three packages available, covering the largest location, Oslo Airport, as well as regional and smaller airports. The company said it may appoint one or multiple partners, depending on the quality of the submissions. Bid documents have been released this week, with meetings and virtual tours of the airports scheduled for early February. The submission deadline is 23 April.
Johnsen added: “We have been very pleased with our existing operator, Travel Retail Norway. We now want to explore the international market to secure the best terms and the best shops going forward.”
On the contract model, while Avinor intends to retain the straight concession agreement it has operated for many years, it does plan to build in more flexibility than before. More details appear in our online interview with Johnsen and Bergen Airport Head of Commercial Aina Tysse.
As reported, income from duty free shops contributes significantly to Avinor’s financial performance, accounting traditionally for around 28% of the company’s annual revenue.
Avinor has consistently stressed its “social mandate” to support Norway’s air market. Johnsen said: “We provide the foundation for an aviation network that connects the entire country. It is a political decision that Norway is tied together by air, where other countries use rail or ships. That means we have a great responsibility to support this national resource, aviation, with duty free a critical element.”
Duty free to retain ‘unique position’ post-pandemic
Duty free shopping holds a “unique position” in Norway, said Avinor, due to the high purchasing power of its affluent population. Sales in international arrivals are particularly strong and represent more than 50% of the duty free business at Oslo Airport Gardermoen.
The coronavirus pandemic has had a negative impact on duty free revenue as a result of the marked decrease in passenger numbers this year, noted the company. It added that future traffic growth will depend on travel restrictions, infection rates and progress in vaccination but Avinor’s long-term scenarios for international traffic foresee a strong rebound in 2022 and a return to 2019 levels around 2023.
The tender documents are published on https://tendsign.com, where interested parties can register a free account. The reference ID for this tender competition is 19/10077. More details here.
*Avinor is promoting the opportunity through The Moodie Davitt Report. Further details appear through the tender banner link on our home page.
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