Airports see uptick in retail sales, line up sweeteners for passengers

Bengaluru airport in process of finalisng new brands for its retail and F&B zone

Private airports are seeing a gradual improvement in retail sales and lining up incentives, anticipating higher passenger footfall during the upcoming Dussehra and Diwali festivals.

These would include passenger engagement initiatives, consumer offers, and curated menus at food and beverage (F&B) outlets.

“We have witnessed encouraging trends in passenger footfalls as well as spends in the past few months since the resumption of air travel,” said a Bangalore International Airport Ltd (BIAL) spokesperson.

Sales have recovered owing to the opening of new outlets and incentives to encourage passengers to shop and dine at airports.

Two new F&B outlets (Starbucks and Aubree) opened at Bengaluru airport in recent weeks while the Haagen Dazs pop-up store is expected soon. The airport is signing up more brands for its retail and F&B plaza, the spokesperson said.

Bengaluru airport ran a month-long tax-free campaign till mid-September, footing the goods and service tax bill on all passenger spends during the period.

Income from retail outlets, duty-free stores, F&B sales, car parking, and advertising is treated as non-aeronautical revenue. It accounted for 50-55 per cent of the revenues of Delhi and Bengaluru airports in the last financial year.

While the lockdown affected the business, a gradual increase in flights is aiding traffic and revenue growth at airports. Domestic passenger footfalls across India are trending at more than 150,000 since the start of the month.

Spreading Wings 

• Non-aeronautical revenue contributed to 50-55 per cent of total earnings of the Delhi and Bengaluru airports in the last financial year
• Non-aeronautical revenue a critical factor for airports, given that they are facing liquidity crunch
• Delhi and Hyderabad airports witnessing month-on-month growth in footfall and spend per passenger 
• Bengaluru airport in process of finalising new brands for its retail and F&B zone

“Government intervention in the form of a phased unlock process, coupled with the civil aviation ministry permitting airlines to deploy up to 75 per cent capacity, is resulting in a gradual improvement in footfalls and spend per passenger on a month-to-month basis,” said a spokesperson for the GMR group, which operates Delhi and Hyderabad airports. Both BIAL and GMR group declined to share their sales figures.

Delhi airport last week launched a scheme enabling passengers to pre-book merchandise from its duty-free stores and collect it at the time of travel. The airport operator said the online platform would make duty-free shopping easier and safer for passengers who wish to limit their time at the airport.

Delhi and Hyderabad airports also have an app for contactless shopping and dining and its features are being expanded.

“It will be critical for airports to focus on increasing non-aero revenues in the scenario of gradually increasing passenger traffic, given their losses and the liquidity crunch. Equally so they would need to support concessionaires who are seeking a renegotiation of their contracts related to minimum guaranteed revenue share due to a sharp drop in passenger traffic, said Siddharth Kapur, former executive director of GMR Airports.