INDIA. The forthcoming privatisation of Mumbai and Delhi airports is set to have major benefits for duty free sales, according to local sources.
India’s Business Standard said that the average spend at Mumbai and Delhi airports is currently just US$1.50 per passenger. It claimed the global average is US$20, though The Moodie Report would advocate caution with that figure.
A civil aviation ministry official told the newspaper: “The difference between the Delhi and Mumbai airports and other international airports is that of a slum and a five-star hotel.”
The paper also cited long departure delays. “A passenger arriving at the Delhi and Mumbai airports takes at least two hours to leave. At Singapore’s Changi Airport, baggage claim and Customs checks require 30 minutes,” it wrote. “Across the world, a passenger spends 30 seconds at the immigration counter, in India one needs two minutes.”
According to an International Air Transport Association (IATA) survey, the Delhi and Mumbai airports were ranked last and second last, respectively, in a list of 57 airports. The parameters were ambience, restaurants and hotels, shopping and parking facilities, waiting areas and lounges, connectivity inside and outside the airport, immigration, baggage clearance and Customs and other facilities.
The airports were evaluated on a scale of 1-5. While the world average was 3.6, Mumbai and Delhi scored 2.6.
The report continued: “The Mumbai and Delhi airports have no branded shopping outlets and most of them are managed by the India Tourism Development Corporation. The Delhi airport has about 12 shops, while Mumbai has 15. Changi has around 70 shops, while Charles de Gaulle has 45 at a single terminal.”
It concluded: “No wonder, the Mumbai airport serves only 42 airlines and Delhi 36. Frankfurt caters to around 100 airlines, Heathrow 90 and Changi 60.”
As reported earlier by The Moodie Report, on September 11 the government approved the privatisation and resultant modernisation of Delhi and Mumbai airports, in a move that is expected to change the face of duty free retailing in these locations.
The Cabinet approved the sale of a 74% stake to either a private joint venture partner or a consortia. The remaining 26% will remain with the Airports Authority of India (AAI).
The two airports will be managed by joint ventures for a period of 30 years, extendable by another 30 subject to mutual agreement. There will be a separate private partner for each airport.
“To ensure that world class airports are available soon, the request for proposal will be completed in four months. After that, the bidders will be selected within eight months,” said Civil Aviation Minister Rajiv Pratap Singh Rudy.
The winning bidders will be given the freedom to undertake land-related non-aeronautical activities to generate revenue. Duty free sales at the airports are currently run by the duty free division of India Tourism Development Corporation, Ashok International Trade Division (AITD/Duty Free India), which is set to make a record turnover of over INR 125 crores (US$27 million) during the current financial year.
Last month it announced a +32% growth in turnover for the 2002-03 fiscal year to over INR 94 crores (US$20.5 million).
