Newcastle Airport breaks through key F&B spend per passenger threshold as tender looms

AUSTRALIA. Newcastle Airport today announced that its spend per passenger (SPP*) on food & beverage exceeded the A$5 (US$3.46) mark for 2022. The positive news is likely to spark interest in an F&B tender planned for coming months, alongside a bid for the retail programme.

The airport, which services a population catchment spanning from the Central Coast to the Northern Rivers in the state of New South Wales, served 1 million passengers in 2022.

It has five F&B outlets, all managed by Australian F&B operator Cater Care. Four of the outlets – Red Rooster, Broughton & Bay Kitchen & Bar, Valley & Vine Casual Dining and Hunter & King Coffee Co – are sited post-security in the departures hall, while Nine Bays Espresso is in the landside arrivals hall.

The A$5 SPP milestone is notable because in The Mercurius Group’s Airport Food & Beverage Study 2020-2021 Australia and New Zealand** no domestic terminal in the country had achieved that feat in pre-COVID 2019.

Notwithstanding the effects of inflation, Newcastle Airport is believed to be one of the first domestic terminals to crack the A$5 SPP barrier for F&B over a 12-month period since the post-COVID passenger traffic recovery.

Commenting on the result, The Mercurius Group Managing Director Ivo Favotto said, “We have been watching the industry closely over the post-COVID recovery to see which airport would break the A$5 SPP mark. There are some special factors at Newcastle Airport that have driven strong growth in F&B SPP – including both the airport and the operator’s focus on providing a consistent and quality F&B offer.

“Newcastle Airport has more outlets (five) than you might typically expect of an airport of its passenger volume, but the outlets all do a different job, allowing the whole programme to maximise its strike rate and average transaction value. You always need to consider local circumstances when planning outlets in regional airports and Newcastle Airport with its passenger mix and long dwell times due to its local and population catchment geography is certainly bucking the norm.”

Exciting terminal development

Newcastle Airport is embarking on an expansion to accommodate forecast growth in domestic travel and international operations, as well as develop Code E aircraft capability.

An artist’s rendering of the new-look international terminal {Source: Newcastle Airport}

The A$55 million (US$38.1 million) funding for the upgrade and expansion of the international passenger terminal was confirmed in the Labor Government’s 2022-2023 October budget.

Newcastle Airport will be boosted by a new service from start-up low-cost airline Bonza. Bonza made its first flight on 31 January, having been granted its Air Operator Certificate from the Civil Aviation Safety Authority earlier in the month.

Starting in March, Bonza will connect Newcastle Airport to the Sunshine Coast with four flights per week and to the Whitsundays Coast twice weekly.

Food & beverage and retail business at Newcastle Airport will be boosted by the launch of Bonza. The start-up airline is gradually introducing an initial route map of 17 destinations and 27 routes – 93% of which are not currently served by any other airline and 96% of which currently have no low-cost carrier.

Tender time looms

As a result of the terminal expansion, Newcastle Airport will be issuing tenders for both its F&B and retail programme in the coming months.

Newcastle Airport Executive General Manager Aviation Shane de Wit said, “Newcastle Airport’s strong F&B SPP performance will stand us in good stead as we progress our terminal expansion. We’re heartened to see our customers consistently spending above industry benchmarks on F&B, supporting our plans to increase the size and range of F&B offers.

“Over the coming months we will be launching an F&B tender to take us through the terminal construction stage and beyond. Our vision is to deliver a portfolio of concepts that highlight local produce as well as recognised national brands.

“We anticipate strong demand for both our retail and F&B tender, including from the incumbent operator Cater Care,” de Wit added.

Newcastle Airport’s strong F&B SPP performance compares favourably with those of other airports studied in The Mercurius Group’s Airport Food & Beverage Study 2020-2021 Australia and New Zealand

Cater Care CEO Rob Rutter said “We have had a stellar 12 months at Newcastle Airport with passengers spending more than ever on F&B across all our outlets. In particular, we have seen increased demand for meals and alcohol as passengers embrace and celebrate the freedom to travel again.

“I couldn’t be prouder of our staff who have pulled together to consistently deliver our customers with quality food and service at every flight.

“We will certainly participate in the F&B tender process as we have put significant effort into developing this market since we took over from Spotless, and we have an excellent relationship with Newcastle Airport.” ✈

* SPP is defined as total F&B sales divided by total pax (ARR+DEP)

** The Mercurius Group, Airport Food and Beverage Study 2020-21

Note: The Moodie Davitt Report publishes the FAB Newsletter, which features highlights of openings, events and campaigns from around the world of airport and travel dining. Please email Kristyn@MoodieDavittReport.com to subscribe.


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