PERU. Lagardère Travel Retail and Lima Airport Partners (LAP) have struck a long-term concession contract based on profit-sharing for the exclusive operation of duty free stores at Lima Jorge Chávez International Airport. The partners said they were “pioneering a new era for travel retail business models” with the move.
In a statement today, they noted: “This is the first large-scale implementation of a business model that has been widely discussed in the industry to better balance risks and benefits between the airport and retail operator. The goal is to unleash growth potential, even more relevant in the context of the Covid-19 pandemic and the resulting drop in global air traffic.”
Effective from January 2022, the 13-year concession will include the introduction of the duty free brand Aelia at the airport’s duty free stores, across 3,000sq m of space. Lagardère Travel Retail will replace long-time incumbent Dufry at the location.
The profit-sharing agreement, they said, will open up significant revenue potential for both Lagardère Travel Retail and Fraport company LAP, as well as greater investment opportunities – ultimately to the benefit of travellers and enhancing the airport experience at the Peruvian hub.
Lagardère Travel Retail Chairman & CEO Dag Rasmussen said: “We are thrilled to have found in LAP a like-minded partner who has demonstrated the most innovative and pioneering way of thinking, from selecting an operator via an innovative Partnership Selection Process up to the contract terms. As we continue to face a great deal of uncertainty and are relatively new to the South American region, this profit-sharing agreement is a great vote of confidence from LAP.
“I am personally grateful for their trust and support in turning theory into action and opening up new perspectives for business models in our industry. We are also confident this is a stepping stone for our partnership with Lima Airport and its majority shareholder Fraport, so that we can all maximise our global expertise and reach to replicate this success elsewhere.”
LAP CEO Juan Jose Salmon explained the strategic importance of the new agreement: “In the middle of the pandemic, Lima Airport Partners has successfully negotiated a pioneering partnership that brings a renowned and long-term partner to Lima Airport. Lagardère Travel Retail is renowned for its strong commitment and extensive expertise in travel retail and duty free. Our cooperation with Lagardère Travel Retail fits fully into our vision-of-the-future for airport retail.
“We believe that collaboration is the key to managing business relationships, as well as actively engaging in new partnership models. We are impressed by Lagardère Travel Retail’s high degree of engagement and innovation, which they will soon be bringing to the Peruvian airport retail market. In the context of LAP’s airport expansion programme, this agreement also sends a strong signal to Peru and the global aviation and travel industries. Our agreement will take us well into the next decade – as we move boldly into the new era of aviation. We are dedicated to delivering new and unique airport retail experiences at the Lima gateway to South America.”
Along with the duty free shops at the existing passenger terminal, Lagardère Travel Retail will work with LAP to define a new retail experience for LAP’s future terminal, due to open in 2025.
The launch of Lagardère Travel Retail’s operations in Peru marks a significant milestone for the French group’s plans to expand in South America, just a few months after being awarded a concession to build and operate food service outlets at Arturo-Merino-Benítez Airport in Santiago de Chile.
Lima Airport traffic reached 23.6 million passengers in 2019. Before Covid-19, its route network featured 24 passenger airlines serving 50 international destinations. With its Lima Airport expansion programme, LAP is currently developing one of Peru’s mega-infrastructure projects.
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