Kuwait airport issues duty-free bid documents

Dermot Davitt

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The tender is sure to attract considerable local and international interest, although incumbent Kuwait Duty Free is yet to confirm whether it will bid alone or with a partner

Kuwait's Directorate General of Civil Aviation has issued pre-qualification documents for the duty-free business at Kuwait International airport, which could lead to the business being tendered later this year.

Kuwait Duty Free is operated by Habchi & Chalhoub. Managing director Anthony Chalhoub told RavenFox.com: "The airport has asked for pre-qualification bids. Our contract expires at the end of February 2006 but it can be extended by three years. We don't know what the timing of any bid will be, or even if there will be any bidding. We believe six or seven companies have applied for pre-qualification."

Chalhoub would not be drawn on whether his company would bid alone or in partnership. "We'll examine the bid documents and then decide what direction we will take. We also need to consider whether there will be a change in the taxation of foreign companies in Kuwait."

Among the key issues facing the business is the lack of space for shopping in departures, and the stiff competition from the local domestic market across most categories. Chalhoub added: "Also, the shopping mall that lies before immigration is confusing customers. They purchase landside and then regret it once they reach the duty-free area. On top of that, the high percentage of military personnel booked on civilian aircraft but not transiting through the airport concourse has affected penetration and sales."

Any tender at Kuwait Duty Free is sure to excite interest among the big international retailers, including Aldeasa, Dufry Group and Aer Rianta International-Middle East, which has a long-standing management consultancy agreement with Kuwait Duty Free. It will also interest influential local companies in Kuwait.

The duty-free business at Kuwait is worth between $35-40m a year and has been rising steadily since 2000.