MIDDLE EAST & AFRICA: ACI


“It is therefore encouraging to note that new passenger terminal infrastructure being set up in Africa recently [allows for] significant duty free and travel retail areas, thus underlying the growing importance of this revenue-generating stream in African airport business models.” Africa grew its DF&TR sales by


3.7% to $815.8m in 2018, preliminary data from Generation Research shows. However, this still accounts for 1% of the $78.96bn industry sales total. “Most airports look at business


and duty free shops as a co-operative, but never work with them; this is a problem in a lot of countries,” Tounsi had previously told TRBusiness during last year’s MEADFA Conference in Beirut. “Most of the management comes


from the air navigation sector and not from business, therefore their focus is on operations, safety, security and regulation.” Indeed,


an increasing appetite to run travel retail shops in Africa; the likes of Lagardère Travel Retail winning retail contracts at Sénégal, Blaise Diagne International Airport in Dakar and more recently at Libreville Leon Mba international Airport, the latter through a service agreement with GSEZ – a subsidiary of Gabon Special Economic Zone – being just one example. Alongside Dufry, which has an


entrenched position in Africa at various airports including Nairobi Jomo Kenyatta, Gebr. Heinemann- supplied Mauritius Duty Free Paradise is another player on the continent with shops at Sir Seewoosagur Ramgoolam International Airport and Sir Gaëtan Duval Airport.


retail concessions


themselves currently account roughly for around 33% of total non- aeronautical revenue generation at Africa’s airports – low compared to other regions – due to a perpetual reliance on aeronautical income as the primary revenue generator. A lack of private investment


in the past, notably at smaller airports, has also posed problems. Notwithstanding this, airports are realising aviation charges alone cannot offset the high capital costs of


funding airport


infrastructure development. “Fortunately, we have observed


a paradigm shift during the past few years and African airports are becoming more and more revenue conscious and turning gradually to non-aeronautical revenue streams because of the higher profit margin, greater financial stability and sustainability as well as the capacity to withstand traffic volatility to some extent,” explains Tounsi. “In this spirit, ACI Africa advocates


for airports, airlines and retailers to work closer together towards a common goal. Joint partnerships and initiatives are thus favoured to create an integrated retail experience at airports.” Certainly on the face of it, there is


OCTOBER 2019


Watershed moment in Luxor Expansion requires adequate support and ACI Africa’s association with MEADFA over many years has certainly helped to galvanise a strategic approach to lifting the importance of duty free and travel retail across the continent’s airports. This has in turn been helped by


ACI Africa’s collaboration with the European Travel Retail Confederation to address key challenges facing the industry in Africa. “Under the African Airports


Development Program of ACI Africa, in addition to safety and security, the focus is also being placed on Airport


revenue generation,” explains Tounsi. “Since 2017, ACI


Africa makes it a point to organise seminars, training and workshops yearly on non-aeronautical revenue generation at airports.” Of note this year was the 61st ACI


Africa Board & Regional Committees meetings and Regional Conference and Exhibition held in Luxor, Egypt, 4-10 March in association with MEADFA. For the first time ever, a dedicated


conference put the onus squarely on highlighting commercial developments and unlocking growth at Africa’s airports, while addressing regulatory challenges and confusion over travel retail’s unique marketplace. This year and beyond, the


signs look positive. Research from ForwardKeys supplied to


King Shaka Airport Durban.


Africa grew its DF&TR sales by 3.7% to $815.8m in 2018, preliminary data from Generation Research shows.


TRBusiness


TRBusiness shows expected global departure bookings to Africa for the period September to November (based on bookings issued until 31 August) are up by 8%. Meanwhile, passenger numbers


are projected to rise to 450m in 2040 (Source: ACI Africa). “Although aviation in Africa is


experiencing a bumpy ride, it has the potential to grow significantly in the years to come, provided that markets open up,” concludes Tounsi. “Further


liberalisation and


competition throughout all sectors of the air transport value chain would enable access to new markets, both within the continent and on an intercontinental basis.” «


The 61st ACI Africa Board & Regional Committees meetings and Regional Conference and Exhibition in Luxor drew a number of senior industry executives such as Lagardère Travel Retail CEO and Chairman Dag Rasmussen.


TRBUSINESS 61


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