Changi tenders beauty and changes concession structure

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Exclusive: By Dermot Davitt

The Civil Aviation Authority of Singapore (CAAS) releases tender documents for the long awaited fragrances and cosmetics concession at Changi T1 tomorrow, November 30. The tender had been postponed because of the uncertainty in the market after September 11, but the CAAS eventually decided that traffic and spend had stabilised enough to proceed. Weitnauer currently operates the contract.

Meanwhile, the CAAS confirmed today that it is adjusting its contract structure. For the last two years, minimum guarantee payments have been directly linked to traffic rises and falls.

Now, after discussions with its tenants, the CAAS will only ask for half the percentage traffic rise in guarantee payments. So if traffic rises 10%, MMG payments rise just 5%. If traffic falls, they will match the percentage drop as before.

Retailers insisted that equating traffic rises and falls with fee payments did not take into account the relative quality of passengers and the amounts they spend. The move to reduce payment increments in line with traffic rises emerged as a result. The new structure takes effect with the beauty tender, and applies to all contracts going forward.

• The full story appears in Duty-Free News International December 1, out next week.