Air Malta seeks buyer for airport retail business

Gavin Lipsith

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After initially offering a 60% share in Air Supplies & Catering, the airline is now seeking to dispose of its entire retail division

Air Malta is seeking to offload its 100% holding in Air Supplies & Catering after initially aiming to sell a 60% share in the company (RavenFox.com January 14). The move is in line with the airline's strategy of divestment following Malta's accession to the European Union last May, allowing it to focus efforts on its core aviation business.

The company operates a 407sq m (4,379sq ft) liquor, tobacco and fragrances outlet in the departures area of Malta International airport, and is the sole concessionaire for arrivals retail at the airport. Until July 2004 it also operated the inflight concession on board Air Malta.

A company spokesman told RavenFox.com that there was good potential for growth, although sales—valued at about €18.7m ($22.3m) for the year ended July 31 2004—had decreased since Malta joined the EU.

"There is the opportunity to grow the business through refurbishment of the existing stores and through marketing" he said. "At the moment there is very little marketing but with some investment in promoting a good image of the stores there is room to grow sales."

The spokesman could not confirm why Air Malta had decided to increase the stake for sale, but reported that a buyer is likely to be determined on solely financial considerations. "When it was offering only a 60% stake it would have made sense for Air Malta to look for a company that would be able to work well in partnership," he said. "But now it is selling the whole company I think it will just go for the best financial offer that is made."

RavenFox.com understands that international retailers, including Gebr Heinemann and The Nuance Group, have studied the opportunity to enter the Maltese market, while a source close to Air Malta suggested that a Greek company was also interested. Hellenic Duty Free Shops denied it would table a bid for the business.