ASIA PACIFIC: HANGZHOU INTERNATIONAL AIRPORT Unlock the full potential...
easier for connecting flights and so on, so our close proximity to it puts us at a disadvantage and just means that it will take time for us to build a critical mass.” However, the airport’s retail
partners are not too concerned with the competition and although some have made it clear that they do not wish to operate stores in both Shanghai and Hangzhou, others are convinced of the potential business. “Obviously the more international
Hangzhou Airport hopes its T4 duty paid tenders will attract a high calibre of global retail operators.
“I believe the tender will take place early next year, probably around March, so that by September we can award.”
David Jea,
Former Deputy General Manager for Hangzhou International Airport
“Hangzhou is the capital of one of the richest provinces in China, so the average spend per passenger is naturally quite high,” adds Jea. He also revealed that of its 40m pax – a figure it will reach by the end of 2019 – 5.2m are international passengers. “Of course the third phase project
The airport is on the cusp of some phenomenal structural developments, which will pave the way for some spacious commercial zones. As it happens, Hangzhou already
ranks fourth in terms of duty free spend per passenger in China, which is no mean achievement.
will enable us to increase capacity both for domestic and international passengers, however, capacity for international pax is expected to exceed 10m by 2022.” Jea is realistic in his forecasts for
traffic and points out that Hangzhou is at a slight disadvantage because of its proximity to Shanghai Airport. “As you know, many airlines fly through Shanghai, which makes it
passengers the better,” says Jea. “It is true that there are some passengers who will shop in Shanghai because certain products – offered by Sunrise – are cheaper there. However, the retail operators assess the business on a case by case basis; if there is money to be made, they can justify opening the stores.”
T4 tenders to create a buzz Regarding the airport’s stiff competition in Shanghai, Jea explains that there is a multi-faceted approach to encouraging more passengers to fly through Hangzhou and to persuade more airlines to join its network. “The city of Hangzhou has rightly
identified the airport as a major economic driver,” says Jea. “One of the ways we can attract airlines is to offer them subsidies (from the province, Hangzhou city, and the airport itself) during the initial phase (two to three years) of new route operation. “The aim is to attract these new
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www.trbusiness.com/subscriptions Hangzhou International Airport will reach 40m pax by the end of this year. 82 TRBUSINESS
operators and launch new routes with the hope that the subsidy can help support and nurture its development. In time, the end-goal is that the route support itself. Offering subsidies to new operators is now common in many markets in China and has been for some time, but for Hangzhou the tool was never fully adopted previously for various reasons.” With a growing airline network,
rapidly increasing passenger capacity and support from Hangzhou city and the province, it looks promising that the airport will attract leading retail operators and brands for its T4 retail tenders. The duty free outlets are likely to
be tendered under one contract as there are not so many companies vying for the business; a symptom of the law in China that does not
OCTOBER 2019
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