Introduction: AGS Airports has appointed the London-based travel retail consulting division of Newmark Group to advise on a project which will see the airside retail and food & beverage offer transformed at Aberdeen International Airport. Our Senior Business Editor Mark Lane speaks to AGS Airports Group Retail Director Tom Hack and Newmark Director Sharon Daley about the latest commercial upgrade planned for north-east Scotland’s premier travel hub.
Change is once again on the agenda at Aberdeen International Airport just five years after the completion of a £20 million (US$25.94 million), four-year terminal transformation project which increased space by +50%.
That project delivered new retail and business lounges and other passenger facilities, including enhanced and expanded security, baggage reclaim and immigration areas.
Now, operator AGS Airports is planning a major upgrade in the airport’s airside retail and food & beverage offer following the appointment of travel retail consultancy Newmark as advisor to the project.
Newmark brings a high level of expertise gained from experience of commercial optimisation and concession planning projects at more than 30 European international airports, plus others in the USA and as far afield as Australia.
The travel retail consultancy’s advising brief encompasses the entirety of the airside retail and F&B environment. That includes a focus on identifying what the optimum layout should be, the retail/F&B space required by category and recommending the type of brands the airports should partner with to deliver an enhanced passenger experience.
Explaining the rationale for a new airside commercial investment, AGS Airports Group Retail Director Tom Hack says: “Whilst the terminal transformation was completed here in 2019 and saw significant investment by the airport and its partners in retail, that’s still five years ago.
“The landscape of customer experience has significantly changed in the airport industry since then so we are now reviewing what the optimum layout of our departure lounge should be to ensure we are delivering the best for our customers, balanced with the ideal retail proposition.”
Hack reveals there is 2,300sq m of airside retail and F&B space under review with Newmark. “Some of it will remain unchanged, some will see refurbishment and some will see more major changes,” he says. “We will be working closely with our existing partners as well as new operators to ensure we get the positioning right.”
On AGS Airport’s decision to commission Newmark as an advisor, Hack explains: “They have a huge amount of experience in the travel retail sector and are best equipped to support us with commercial planning and connect us to brands that most suit the unique demographic of Aberdeen International Airport.”
Asked about the attractiveness of this demographic and the location of the airport, Hack points to a loyal passenger base working in the oil and gas industry and, increasingly, the offshore clean-energy markets. He further notes that Aberdeen, as a result, has a high proportion of passengers with the levels of income to spend significant amounts in the airport’s commercial areas.
“Aberdeen International Airport is very well positioned to deliver profitable returns for our commercial partners,” Hack notes. “We have a broad mix of airlines, including British Airways, easyjet, Aer Lingus, KLM, TUI and Wizz, serving a wide range of destinations. Our research shows that customers using Aberdeen for business travel fly an average of nine times a year through the airport.
“It’s important we deliver a smooth, friendly and efficient customer experience and ensure our retail proposition matches the high standards we and our customers expect.”
Newmark is set to play a key role in achieving that. Discussing her company’s credentials with The Moodie Davitt Report, Newmark Director Sharon Daley says: “Newmark’s travel retail team is the largest travel retail and airport consultancy business in Europe. Operating on a global basis, we support airports and retailers to develop their business in the travel retail sector.
“Our first-hand experience and international reach give us unparalleled insights into all aspects of the travel retail industry. We combine our extensive research into consumer behaviour and retail trends to create customer-centric commercial strategies for airports.
“We are an attractive option for our airport partners because of our wider retail network as Newmark and our extensive practical experience of commercial and brand planning in travel retail where we focus on shining the light on the customer.”
Asked what Newmark will be delivering for Aberdeen Airport, Daley replies: “Newmark is a fresh pair of eyes for the airport. While the main objective of the project was to support the AGS team with connections to potential new brand partners, we always start with understanding as much about an airport’s customer and commercial performance as we’re able.
“We think it’s important to help airports cast an eye to the wider trends influencing consumers, and the products, brands and concepts that are likely to be relevant to their audience. We have evaluated the existing layout, configuration and allocation of space, and importantly, how passengers interact with the commercial area.”
Daley notes that Newmark has taken both a visual and data-driven approach to highlight potential levers for improving spend drivers like dwell, experience and customer satisfaction.
She adds: “For Aberdeen we will provide our view of categories with potential for growth, options for a new commercial space mix and layout along with ideas of brands and retailers who can bring the opportunity – and the airport’s ambitions – to life.
“We are in the final stages of the project and supporting the team with the evaluating market options.”
Discussing Newmark’s findings, Daley observes its study of airport passenger insights reveals an affluent and independent local audience with a high frequency of flying, including a significant amount of business travel.
She says: “Aberdeen has a vibrant and entrepreneurial spirit and is home to pioneers of the global energy transition as well as famous food and drink brands, both of which resonate with the opportunities and ambitions of the airport.
“More practically, Aberdeen is a small airport in terms of passenger numbers and benefits from the luxury of shorter and smoother journey times through the airport, as well as easier navigation and circulation of commercial areas.
“This is a win for the passenger experience and customer satisfaction and is a dynamic that will support any changes the airport implements to increase choice, participation and spend in their commercial offer.”
Aberdeen International Airport served 2.3 million passengers in 2023 and is still building back towards its pre-COVID level, with 2.9 million passengers served in 2019. A look at the airport’s traffic history shows passenger numbers peaked back in 2014 at 3.7 million, which underlines the potential for more critical mass in traveller spending in the airside concessions.
Hack confirms that significant passenger growth is expected, though he notes that levels of acceleration in traffic will be slower and steadier than other airports under the AGS wing.
“We won’t see as much growth in percentage terms in comparison to our other airports [which include Glasgow and Southampton -Ed], where holiday traffic will be driving the passenger increases,” he says. “Aberdeen is a broader pax base, with a different overall demographic.”
Asked when Requests for Proposals (RFPs) are likely to be issued for new airside concessions identified from Newmark’s work at Aberdeen International Airport, Hack replies: “It’s too early to give a definitive answer as we are still working through the opportunities and what the airside configuration will look like.
“But once we have completed the planning phase, we will be issuing the RFPs for the new spaces we create. We are aiming for this to happen in Q2 2025. There are lots of moving parts to this project but we are aiming to have the reconfiguration complete by the end of 2025.” ✈
