USA. Dallas Fort Worth International Airport is to allow concessionaires struggling amid the COVID-19 crisis to relinquish space without penalties or repercussions for their existing leases.
Executive Vice President Revenue Management Ken Buchanan, speaking on a call organised by the Airport Restaurant & Retail Association and Airport Minority Advisory Council last week, said the move had just been approved by the board.
“We are still over -40% down on last year in traffic and so we have more concessionable space than demand calls for,” said Buchanan. “Many spaces are still closed and partners are not paying rent on those, but if they have to make a strategic decision to give back space, then we want to be able to free them of that space without penalty.
“We still want these companies to be part of DFW’s future. We will see if that is enough to right-size our programme. We strive to be at 8-10 sq ft of concession space per 1,000 passengers. In some terminals we’re close but in others there is a gap.
“With international travel curtailed we have a lot of space, much more than demand, especially in retail [in Terminal D]. If you believe international traffic will lag behind domestic, and you have three years remaining on your lease, you may need to assess that and make a decision in the best interests of your company. We don’t want to be a barrier for you to make that decision.”
Dallas Fort Worth International was among the first airports in North America to respond to concessionaires’ calls for relief when the COVID-19 crisis struck. In early April its board ratified a crucial plan to move commercial partners from Minimum Annual Guarantee-based (MAG) fee models to a rent structure based on a percentage of sales.
Buchanan said: “We have asked a lot of our partners in their build-out, their investment in the experience and in technology, and they stepped up. Now with this catastrophe, the question for us was ‘are we going to step up and live up to what we’ve preached about partnership’?
“It’s not just a cliché. We wouldn’t be in the position we are in financially without the partners’ support. Now we are able to support and encourage them and demonstrate what partnership looks like in return.”
Encouragingly, domestic traffic recovery is well underway at Dallas Fort Worth, with daily passenger numbers heading towards 100,000.
Buchanan said: “We have fared pretty well comparatively. We are up on 50% of last year’s departures for this period and climbing, which is well ahead of trend. We will hit 100,000 departures a day in July, which is credit to how American has maximised use of the hub. They have said that DFW will serve more connections for them than before. They are dropping five routes to Asia from Los Angeles, which makes DFW the main transpacific gateway for American. That’s a big deal for us.”
*We’ll bring you more on Dallas Fort Worth Airport and Ken Buchanan’s thoughts on the crisis in this week’s edition of The Moodie Davitt eZine.
