TAIWAN. Ever Rich Duty Free has hailed the key role of public-private partnerships (PPPs) between airports and retailers in driving revenues and enhancing consumer service levels at Taiwan’s airports.
“In addition to providing a steady stream of revenue for the government, Taoyuan International Airport has far exceeded the financial performance of other international airports around the world,” the company said.
Non-aviation revenues generate over 50% of Taoyuan International Airport’s operational income. Ever Rich said this is a direct result of the airport’s successful PPP model with its retailers.
The participation of duty free retailers in the airport’s PPP programme is a world-first. As a result, the company said, the airport and its passengers have directly benefited from the retailers’ funding of airport services and facilities. That contribution has, turn, driven significant investment and staff cost savings for the airport.
Ever Rich Duty Free and Tasa Meng are the two core retailers at Taiwan Taoyuan International Airport.
With zero budget and subsidies sourced from governmental funding in 2016, the programme has contributed toward 83.2% of commercial services income for Taoyuan International Airport, or over 90% if staffing and installation costs of public services and facilities were to be included, The Moodie Davitt Report understands.
The airport’s retailers have funded numerous public services and facilities. These include the much-acclaimed themed terminal gates; passenger service counters; transit rooms; luggage trolleys; washrooms; and infant nurseries. Even the airport’s expansion and construction projects have been made possible through innovations and efficiency afforded by funding through duty free retailers.
This not only makes Taoyuan International Airport a “one-of-a-kind” airport, but one that is now a favourite among airport travellers, Ever Rich said. Underlining that status, it was recently rated among the ‘Best Airports in Asia’ by Sleeping in Airports (www.sleepinginairports.net). The combination of themed terminal gates, public art exhibitions and mobile customer service personnel (staff provided by duty free retailers) have all boosted customer approval levels, the company commented.
Taiwan Taoyuan International Airport’s PPP model also benefits society by creating jobs through the private sector. High costs associated with training service personnel can be transferred to privately-owned companies to improve the quality of services, it added.
Private enterprises – duty free retailers in this case – also stand to benefit from the programme through increased profits and sustainability, Ever Rich said. “This will not only allow them to improve the airport’s international competitiveness through continuously updated services, but also maximise Corporate Social Responsibility.” That combination offers a “quintuple win-win” scenario, Ever Rich said, involving enhanced customer satisfaction, stabilised government revenue, job creation and employee care, increased Corporate Social Responsibility, and reasonable profits for private enterprises.
Ever Rich said that Taiwan’s airports (Taoyuan International, Kaohsiung International, Taichung International, Taipei Songshan International) and expressway service facilities have reaped the benefits of the PPP model.
The retailer claimed that several Asia Pacific airports are reevaluating their commercial contracts in the hope of avoiding the kind of dispute currently happening between Incheon Airport and Duty Free. As reported, Lotte Duty Free recently filed an unfair trade practice complaint with South Korea’s Fair Trade Commission over the company’s duty free concession at Incheon International Airport. The unprecedented move follows Lotte Duty Free’s repeatedly unsuccessful efforts to renegotiate its contract in the wake of a disastrous slump in Chinese tourism since the THAAD dispute with China began in March.
Taiwan Taoyuan International Airport has been voted by international travellers as ‘The World’s Best Airport for Staff Service’ for three consecutive years (2015-2017) in the Skytrax World Airport Awards. Other accolades include winning first place in the ‘Best Airport by Size: 25-40 Million Passengers’ and ‘Best Airport in Asia-Pacific by Size’ categories in ACI’s 2016 Airport Service Quality Awards.