BAA reveals Budapest retail plan

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Gavin Lipsith

22-Mar-2006

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The company aims to more than double the contribution of retail to the airport's revenues by 2011

UK airports group BAA has identified "huge opportunities" to grow the retail business at Budapest Ferihegy airport, with a big expansion of commercial space on the agenda as the company plans to invest Eu261m by 2011. BAA International managing director Andrew Jurenko told RavenFox.com that revenue from retail would be critical to the company's plans to make Budapest the group's second most profitable airport – behind London Heathrow – within 10 years.

The retail offer at Budapest – operated by a Gebr Heinemann joint venture under a contract until 2010 - currently consists of eight duty-free stores selling liquor, tobacco, fragrances, cosmetics, souvenirs, sunglasses and watches, as well as two crystal and glassware stores. Jurenko described the existing offer as basic. "We plan to build out from the existing retail area when we join the two terminals," he said. "By 2015 the retail area will be twice the size it is now. Currently there is strong passenger growth from mainly low-cost carriers, but an underdeveloped commercial offer."

Retail revenues account for 25% of total revenues at Budapest, and Jurenko said that the company aimed to increase that to 58% by 2011. The growth will be essential if BAA is to fund decreases in aviation fees, which are currently high. Reducing them will be a key measure in BAA's attempts to retain Budapest's low-cost airline tenants.

BAA acquired the airport earlier this year, and Jurenko described the deal as "the most exciting airport privatisation deal since Sydney in 2002".

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