Copenhagen posts dip in duty-free revenues

Andrew Pentol

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The change of concessionaire and retail renovation affected the airport’s earnings from duty-free in 2007

Macquarie Airports (MAp) has announced a 24.5% decrease in earnings from duty-free and tax-free sales at Copenhagen Kastrup airport in 2007. MAp, which has a 53.4% stake in Copenhagen Airports (CPH), said earnings were affected by the change of concessionaire from The Nuance Group to Gebr Heinemann, which signed a six-year contract in 2006 to operate the main duty-free store, four smaller satellite shops and the airport’s arrivals outlet. Between March and May sales of duty- and tax-free products were handled from a small temporary shop in terminal three away from the general passenger flow, contributing to the fall in sales. The new, centralised walk-through duty-free store opened on June 1 2007.

Revenue from speciality shops rose by 8.2% following continuing improvement of the service and the product range of the existing concessionaires. The introduction of new concepts and brands also contributed to growth. Bars and restaurants enjoyed increased revenue of 27.1% resulting from the increase in low-cost travel and fewer airlines offering inflight meal services. The opening of several new bars and restaurants was also a factor. In total, concession revenue fell by 3.7%.

Commercial revenue in Mexico accounted for 30% of total revenue in 2007 compared with 9% in 2000. CPH has been working with Mexican airports operator Grupo Aeroportuario del Sureste (ASUR) to increase commercial revenues by improving commercial concepts, introducing new international operators under new commercial terms and conditions and better utilisation of airport premises for commercial purposes.

The group also revealed a 1.4% increase in airport revenue to DKr2.9m ($578m). Profits from international investments after tax rose to DKr50.1m ($578m) with profits after tax, excluding one-off items, increasing by 13.9% to DKr1,001.0 ($197m). Passenger numbers at Copenhagen airport rose by 2.5% and EBITDA increased 0.1%.

MAp CEO Kerrie Mather said: “During 2007 Copenhagen Airports’ established a strong platform from which to deliver growth and excellent quality of service. The flat EBITDA performance reflects the cap on security cost recovery, the disruption associated with the creation of a centralised security checkpoint and the new duty-free contract. Strategic investments have been made in a number of key operational areas, most prominently in establishing the centralised security checkpoint and new duty-free store. Staff numbers have been increased in specific areas to support operational initiatives. These investments and initiatives have been successful in increasing the quality of service, a process that will continue in 2008. While concession revenue was lower in 2007 than in 2006, passengers clearly appreciate the service and product range enhancements associated with the new duty-free store. As we move into the second quarter of 2008, this should begin to be reflected in operating performance.”