Jaeger: “What we have achieved is an increase of 16% in retail and F&B revenues in 2009 compared to 2008. This is very impressive, especially considering that the airport experienced a decrease in passenger numbers of over 6%.”
The ambitious overhaul of Malta International Airport’s retail and security areas as part of a multi-million euro refurbishment last year aimed to improve the passenger experience while also increasing the value of the airport’s non-aviation revenue streams. Nine months after the official opening of the new-look retail outlet, the latest figures make for positive reading.
“What we have achieved is an increase of 16% in retail and F&B revenues in 2009 compared to 2008,” explained Jaeger. “This is very impressive, especially considering that, at the same time, the airport experienced a decrease in passenger numbers of over 6%. The return on investment has been excellent so far.”
As part of the project, airside space was increased to 2,300sqm while a further 700sqm of space was added landside, allowing for the addition of 10 new retail and F&B outlets. Among them is The Nuance Group’s 1,075sqm walk-through duty free store, which epitomises the airport’s aim to offer a more enjoyable shopping experience through improved passenger flow and increased product visibility.
While the decrease in passenger numbers – a common theme among European airports due to the unsteady financial climate – resulted in a 2% decrease in airside revenues in 2009, landside sales saw a vast improvement.
Jaeger said: “Malta has quite a dependence on the UK market for airside sales and the ability of UK travellers to spend has been hit in recent months. But landside, we have seen an increase of 50% in 2009 from 2008, and this has been a big factor in the 16 per cent increase in retail and F&B revenues.
“Catering alone saw a year-on-year increase of 11.6% in 2009. In the second half of 2010, and going into 2011, we hope that the economic climate will change for the better and we hope that the results will improve even further.”
Developing commercial revenues
The expansion and modernisation of the retail area helped Malta International Airport to achieve fourth place in the Airport Service Quality Survey for 2009.
With non-aviation revenue streams proving to be a vital factor in retaining economic development in a time of financial downturn, Jaeger feels that the development of the travel retail area was perfectly timed and, to an extent, single-handedly “saved” the airport’s financial performance for the year. Having previously outlined an aim for non-aviation revenues to account for 30% of the airport’s overall turnover by the end of 2010, the Malta International Airport CEO remains optimistic that this ambition can still be realised.
“The increase in non-aviation revenue in 2009 was up to 25% so I was hopeful that it would rise to around 30% by 2010. However, when the economic crisis hit last year it became evident that this figure was unachievable. Our overall aim is to increase our profitability but, also, we would like to eventually reach that 30% mark. If there was more of an increase in aviation revenues though, we certainly wouldn’t mind that.”
As well as the improvements to the retail area, the security area at the airport was also revamped as part of the €5.5 million project and, thanks to the combination of improvements, Malta International Airport performed impressively in the Airport Service Quality Survey for 2009. The Survey takes into account the performance of 140 participating airports and, after more than 275,000 passengers were questioned on how satisfied they were with their airport experience from the time of arrival through to the moment of departure at the gate, Malta Airport was classified as the fourth-best in Europe.
“We have received excellent feedback and that is reflected in the fact that we came fourth in the survey,” Jaeger said. “The overall aim was to improve the passenger experience. With the security developments, we aimed to reduce the queuing time and we also aimed to improve the experience for those using the VIP lounge, as well as for those using the retail facilities. We aimed to improve the entire ambience of the airport and I feel that we have achieved that.”
Malta International Airport is aiming for commercial revenues to account for 30% of the airport’s overall revenue.
Business Centre
Having proved the potential of the exploitation of non-aviation revenue streams, Malta International Airport is already embarking on another project in the form of a Business Centre next to the air terminal, which is currently under construction and is scheduled to be complete in the third quarter of 2011.
Jaeger explained: “It has always been our aim to increase our non-aviation revenues in the future and this new project, the Business Centre, is vital to that. Since we released the plans and since construction started, the interest we have received has been very good. In fact, we have already concluded an agreement with Vodafone Malta for the lease of 2,500sqm, which represents approximately 20% of the office space.
“It’s another big investment for the airport. The budget set for it was €16 million but we aim to spend less. With construction costs currently far lower than in the past, we feel that we have chosen the right time to invest.”
