INDIA. Airports Authority of India has issued a tender for a seven-year retail contract across terminals at Calicut International Airport.
The retail spaces are spread across the international departures, arrivals and common areas. AAI said in its tender document that space in domestic departures will be allotted once civil works, currently continuing, are completed.
In the international departures area, ten retail outlets measuring 159sq m and three outlets across 36sq m in the arrivals area are available.
Calicut Airport served 3.33 million passengers in Financial Year 2019-20 (to 31 March); of this, 83% (2.7 million) were international passengers. For Financial Year 2022-23, projected traffic is 3.36 million and the contribution of international passengers is 82.5% (2.77 million). The airport expects to host 3.87 million and 4.39 million passengers in the next two years respectively.
AAI has quoted an annual guarantee of Rs11.37 (US$0.14) per passenger or a Progressive Revenue Share, whichever is higher. For passenger traffic in the range of 70% to 120% of projections, the progressive revenue share would be 20% on net sales from the outlets. For passenger traffic above 120% and below 70%, the progressive revenue share would be 22% and 18% respectively.
On the financial criteria, qualifying bidders must have an annual turnover of Rs. 2,20,46,640 (US$0.26 million) during two of the last seven years, shown in audited financial statements. AAI does not include a clause insisting on prior experience in retail or travel retail.
A pre-bid meeting will take place on 11 April with tenders to be submitted online by 25 April. The technical bid documents will be opened on 26 April and financial bids on 4 May.
There are four operational airports in the southern state of Kerala of which three are international. Aside from Calicut, the other two are political capital Thiruvananthapuram and commercial capital Kochi.
The S. Shriram view: Calicut is among the key gateways for international traffic to Kerala and the wider Indian market, with volumes predominantly driven by blue-collar workers travelling to and from the Gulf states where many are employed.
While the main Gulf carriers, as well as Indian airlines, serve all three international airports in Kerala, Calicut is usually the preferred option for this profile of traveller, due to proximity to the airport, even if airlines offer lower fares in a bid to fill seats at the other two airports.
Given that the domestic traffic is just 15% of total traffic at Calicut, most passengers who arrive or depart from here are locals, travel direct and few take connecting domestic flights. This adds to the strong business case for bidders interested in this concessions opportunity.
*As reported, experienced travel retail and airport commercial executive S. Shriram has joined The Moodie Davitt Report in line with our desire to boost coverage of one of the world’s most exciting and fastest-growing aviation and travel retail markets. He will help develop The Moodie Davitt Report’s coverage across airport and aviation development, travel retail and food & beverage and other travel-related commercial revenues, providing commentary where relevant on key projects and the wider market.
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