NEWS/ANALYSIS: MALAYSIA AIRPORTS
Malaysia Airports makes strong start in KLIA’s 20th anniversary year
Duty Free sales in the period January to June 2018 grew +5% at KLIA and KLIA2 (KUL), driven by tourism campaigns and Malaysia’s status as a ‘developing hub’. Andrew Pentol speaks to Senior General Manager, Commercial Services Mohammad Nazli Abdul Aziz.
I
n the same year that Kuala Lumpur International Airport (KLIA) celebrates its 20th anniversary,
Malaysia Airports Holdings Berhad (MAHB) has reported a strong start. Duty free sales (year-to-date June)
surged +5% at KLIA and KLIA2 (KUL), driven by +4% pax growth, while overall MAHB travel retail sales (YTD June) grew +2%. MAHB currently runs 39 airports/
stolports (airports with short take-off and landing operations) across Malaysia of which five are international (KUL, Kota Kinabalu, Penang, Kuching and Langkawi). Combined duty free sales for
Kota Kinabalu, Penang, Kuching and Langkawi International Airports were up +21% (YTD June) on the back of +3% average pax growth. Outlining the key growth
drivers Senior General Manager, Commercial Services Mohammad Nazli Abdul Aziz tells TRBusiness: “Tourism campaigns are bearing fruits and Malaysia is a developing hub benefitting from emerging middle classes in the region. “The Kuala Lumpur to Singapore
route is the busiest in the world and Indonesian pax are choosing Kuala Lumpur, Kota Kinabalu and Penang as airports of arrival. “Increased bookings from Hong
Kong, Shanghai, Guangzhou and Beijing, rising numbers of South Korean pax flying into Kota Kinabalu and Kuala Lumpur from Seoul Incheon, Busan and Jeju and increasing Indian pax due to extensive routes into Malaysia, are some of the factors having an impact.” Last year, 25.9m international
tourists visited Malaysia (Source: Tourism Malaysia) of which 2,281,66m
OCTOBER 2018
were Chinese. Abdul Aziz, who reveals almost one third of duty free buyers across the business are Chinese, says: “The weaker Ringgit has made vacationing in Malaysia affordable. Hotels in Malaysia are among the cheapest regionally and Malaysia is among the fastest growing international destinations for Chinese tourists.” Further illustrating the importance
of Chinese consumers, Abdul Aziz revealed they were the third-highest spenders behind Malaysians and Indians at KLIA in 2017. “Total duty free product sales at KLIA was RM749m ($180.4m) with an average sales bill of RM192 ($46). “The Chinese spent the most on
perfumes and cosmetics and fashion and accessories which had the highest average sales bill of RM391. “Inbound Chinese passengers
to KLIA were mainly from first tier cities such as Beijing, Guangzhou and Shanghai, but the number of passengers from second tier cities is increasing due to additional connectivity to/from Nanjing, Chongqing and Chengdu.”
Aggressive route expansion Meanwhile at KLIA2, where total duty free sales amounted to RM631.4m in 2017. The average SPP was RM154 and the Chinese were the highest spenders. “Aggressive route expansion
to China and India for KLIA and KLIA2 has brought more high value spenders to the duty free category,” says Abdul Aziz. Reflecting on overall MAHB
performance in 2017, TRBusiness can confirm total duty free sales reached RM1.63bn. Duty free sales at KUL grew +30% year-on-year on the back
of +11% passenger growth (sales per pax grew +12%). Sales of timepieces, perfumes and cosmetics and liquor grew +70%, +50% and +10% respectively year-on-year. Total MAHB travel retail sales
across the whole business rose +24% to RM2.63bn in 2017. Outlining plans to celebrate KLIA’s
20th anniversary, Abdul Aziz says: “For a number of years, we have worked closely with all our business partners. In addition to the main annual festive campaigns, this year we are stepping up engagement with our retail tenants through the Malaysia International Gourmet Festival. This involves quarterly meetings and airport study tours.” «
“The weaker Ringgit has made vacationing in Malaysia affordable. Hotels in Malaysia are among the cheapest regionally and Malaysia is among the fastest growing international destinations for Chinese tourists.”
Mohammad Nazli Abdul Aziz, Senior General Manager Commercial Services, KLIA
TRBUSINESS 23
Above: Malaysia Airports and The Hershey Company unveiled its 'world- first' mobile confectionery promotion at KLIA earlier this year.
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