UK. In a trading statement covering the second half of its financial year to 31 January 2004 Alpha Airports said business is “in line with expectations.”
In Australia, Alpha Inflight Retail has won the contract to manage and develop the Qantas inflight duty free retail programme from May 2004.
But the group revealed its catering contract with Thomas Cook Airlines (owned by Deutsche Lufthansa and KarstadtQuelle) will end in March. Offsetting that loss, the group confirmed the new UK catering business from MyTravel Group worth £4 million (US$6.8 million) per year over three years and also the contract to support the inflight retail business awarded last year (The Moodie Report, 9 October 2003).
Overall the Alpha Flight Services (UK) division maintained its level of customer service activity for the 2004/2005 season, however margin pressure continued, reflecting increased insurance, security and pension costs. In Amsterdam new inflight catering business has been won from Japan Airlines and Singapore Airlines.
Alpha said its UK retail division continued to perform well with Alpha Airport Shopping’s like-for-like annual sales up over +15% on the back of regional airport passenger growth of +9%.
International passenger figures continued to grow, with +22% growth in tourist arrivals into Sri Lanka.
However, Alpha cautioned the lower US Dollar/ Pound Sterling exchange rate will have a small adverse impact on the Sterling consolidation of the group’s international businesses in the Indian sub-continent and the Middle East.
Turning to UK flight services the group said the general downward trend experienced in the first half continued, with a weak summer charter holiday season and more charter airlines limiting their previously free-meal policies for travellers. However, reduced activity as a result of the Iraq War and SARS in the first half reversed, and international long-haul travel recovered fully by the end of the second half.
Meanwhile Alpha D’lish, the high quality pre-order meal service, was launched successfully with Virgin Express, the Brussels based low-cost European airline. Alpha said: “Customer reaction has been enthusiastic, with a significant percentage of repeat customer sales already received. We anticipate a trial launch of Alpha D’lish in the UK this year with a number of our UK low-cost airline customers.”
In the UK, the group has been awarded preferred bidder status with Newcastle International Airport to operate their retail concession for a further seven years (The Moodie Report, 11 December 2003), commencing May 2004. This will generate ongoing revenue of £9 million.
The management reorganisation announced by Alpha recently will result in the loss of 90 jobs. This is intended to create a business model for Flight Services which is more streamlined and customer facing, and has been shaped in line with the principles learnt from the successful transformation of the UK Retail business over the past three years. A net exceptional charge of £1 million (US$1.7 million) will be taken in relation to this, said the company.
