Delhi pre-trading delay costs “significantly greater than expected”, says Alpha

Tina Milton

Alpha Airports Group expects pre-trading costs relating to its business in New Delhi to be higher than originally forecast

Alpha Airports Group indicated that pre-trading costs at New Delhi Gandhi International airport were “significantly greater than originally expected” owing to the delay of shop openings.  Alpha, which operates stores at Delhi through a joint venture with Pantaloon Retail (India), expected to commence trading in January, but due to a number of issues including delays in receiving regulatory approvals and trading clearances the outlets were unable to open until the end of March.

In an interim management statement, the company commented: “Additionally, in a market where the airport experience has traditionally left a lot to be desired, the first month’s footfall and trading performance were disappointing.  We believe, however, that as awareness of our shops and the quality of the retail experience grows, we will see increased footfall.  In the meantime, we are encouraged by the high levels of spend once travellers enter our shops.”

The issues in Delhi and the heightened security situation in Sri Lanka are expected to be factors in the full year results but it is too early to assess their full impact, according to Alpha.  Overall revenues in the first three months of the financial year grew by 6% compared to the same period last year.  Group operating profit was in line with the same period last year.The company reported that the implementation of the new group strategy is progressing well and said the recent agreement with Starbucks is an example of a new direction for the business. 

At Alpha Airline Services, which (trading as Alpha Flight Services) provides catering logistics, inflight catering, bonded stores and management services to airlines, revenue increased by 5%.  In the UK, strong growth in inflight retail offset the impact of the terminations of the ThomsonFly and BA Connect contracts, resulting in an increase of 1% for the division.  Internationally, revenue was up by 27% with particularly strong growth in Australia, following recent contract wins with Malaysia Airlines, Air New Zealand and Etihad, and in Romania.

At Alpha Airport Services, which (trading as Alpha Retail) operates retail and catering outlets at airports, revenue increased by 7%.  Revenue growth in the UK of 8% was ahead of the increase in passenger volumes.  At its international businesses, revenue was up by 3% with a strong performance from the US offset by the impact of contract losses in Turkey and the heightened security issues in Sri Lanka.