Beijing airport to reclaim retail rights

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Beijing Capital International Airport Co, owner and operator of China's largest airport has announced that next month it will cease leasing retail and restaurant space to concessionaires and will operate all outlets itself. Beijing Duty Free, supplied by China Duty Free Group (formerly China National Duty Free Merchandising Corp), is already a subsidiary of the airport company

Beijing chairman Li Peiyin announced the company would provide better products and services at more reasonable prices. He cited a Chinese media report that one business had charged about Rmb88 ($10.60) for a cup of coffee.

The airport company also announced this week a half-year interim net profit of Rmb232.27m ($28.1m), an increase of 19.3% on the same period last year. Rental revenues from concessions were Rmb133.02m ($16.1m) in the six months to June 30. This segment represented 41.7% of non-aeronautical revenues of Rmb318.59m ($38.49m), up 21.6% year on year. Aeronautical revenues grew 11.6% year on year.

Beijing said the growth was driven by expansion of duty-free shops and a 14% rise in passenger numbers to 12.54m in the six month period.

"During the first six months of this year, traffic volumes at Beijing airport maintained their growth at a satisfactory rate, despite the fact that aircraft movements and passenger throughput were affected by recent domestic and overseas air traffic accidents as well as the strict limitations on air ticket discounts required by the General Administration of Civil Aviation of China (CAAC)," Beijing said in the statement.

Meanwhile the company's plans to acquire stakes in other Chinese airports (TRW 15/03/01) are proceeding but have been held back by delays in transferring ownership and operating rights from state to local governments. Beijing has stipulated that it must have local government approval for any acquisition deal involving the country's 144 airports.