THURSDAY 31 MARCH 2005 WELCOME FAST, … 31 MARCH 2005 FAST, FACTUAL, FREE Aer Rianta Interna-tional–Middle East Managing Director John Sutcliffe unveiled a superb set of annual

WELCOME to The Moodie Report.

This week’s edition is brought to you ‘trackside’ from Bahrain, where the duty freeoperation at Bahrain International Airport is hectically preparing for an influx of visitorsthis weekend for the Bahrain Grand Prix.

Formula One racing is big business and brings millions of dollars of benefits (let’s avoidthe term ‘spin-off benefits’) to other sectors. In the Kingdom of Bahrain that’s certainlythe case and few companies anywhere are more adept at servicing large visitor numbersand convincing them to spend than Bahrain Duty Free. The inside of the duty free com-plex, which enjoys a natural race-track like curve anyway, has been turned into a virtualcircuit, building on the Frontier Award-winning ‘Race 2 Win’ promotion of last year.

We’ll report in more detail next week on the respective impacts of Messrs (John) Sutcliffeand Schumacher but the former is certainly well on track with another set of outstand-ing results announced this week. The Managing Director of Aer Rianta International–Middle East, a leading shareholder in Bahrain Duty Free and operator of the retail con-tract, reacted with understandable pleasure this week to the publicly-listed group’s +35%increase in sales on passenger growth of +20% for 2004. That’s the natural result of asharp lift in sales per passenger (and customer), in turn the return on an unbroken com-mitment to store and marketing investment through good times and bad in recent years.

All of the Middle East is hoping that the region is not returning to the bad times amidLebanon’s rapidly deteriorating political climate and the recent bombing in Qatar.Lebanon is the prime concern. Since the assassination of former Prime Minister RafikHariri on 14 February tension has been rising and last weekend’s fatal bombing in amainly Christian area of Beirut has locals deeply fearful of what the future holds. As wereport in this edition, the country’s tourism sector – and its superb duty free operationBeirut Duty Free – has been enjoying a prolonged commercial boom period as this sorecently war-ravaged but historic and beautiful city enjoyed the benefits of peace. Thatpeace is now at risk.

Travel retail, at the frontline of world air transport, tends to be caught up quickly anddeeply by world events, though so far Beirut Duty Free is holding up well. This week’stragic earthquake in Indonesia, felt around much of Southeast Asia, was anotherreminder of the sector’s perennial vulnerability. The region’s nervy travel and tourismsector in those areas hit by the 26 December tsunami badly needs all the help, and visi-tors, it can get and one hopes the latest tragedy will not affect consumer confidence.

The Moodie Report© is published by Moodie International. All rights reserved.Please send any comments or stories to [email protected] Page 1

THURSDAY 31 MARCH 2005

FAST, FACTUAL, FREE

Aer Rianta Interna-tional–Middle EastManaging DirectorJohn Sutcliffeunveiled a superbset of annualresults for flagshipoperation Bahrain Duty Free –an appropriately winning formula on the eve of theBahrain Grand Prix.

“The catering offeris an absolutelyvital element of thewhole airport expe-rience – over 90%of our travellersuse these servicesand facilities.”Penetration rates that dutyfree can only dream about: BAA Managing Director UK Airport Retail Colin Hargrave unveils Geronimo,an intriguing new addition to the company’s food & beverage offer.

PERSONALITY OF THE WEEK

QUOTE OF THE WEEK

MOOD E-MONITOR

Alpha Flight Services ☺☺

Altadis/Autogrill ☺☺

Bahrain Duty Free ☺☺

DFS Airport Dubrovnik ☺☺

InterBaires ☺☺

Munich Airport ☺☺

Brittany Ferries ��

P&O Ferries ��

THE MOODIE REPORT DATA ROOM – TRAFFIC NEWS

COLOMBIA. International passenger traffic through Colombia’s airports jumped+18.75% to 57,997 in January 2005, according to just-released data from the Aeronauti-ca Civil. In the first month of the year, Bogota El Dorado accounted for 35.9% of thenational turnover of passengers. A total of 695,000 passengers were handled at Colom-bian airports in January.

North America accounted for 41% of the total international passenger traffic, SouthAmerica for 27%, Central America for 17%, Europe for 12% and the Caribbean for3%. Colombian airline Avianca, American Airlines and Panamanian Copa Airlines trans-ported 67.8% of the passengers.

Thursday 31 March 2005The Moodie Report

Page 2The Moodie Report© is published by Moodie International. All rights reserved.Please send any comments or stories to [email protected]

FRANCE. French ferry operatorBrittany Ferries transported a total of2.5 million passengers in 2004, down -3.9% on the previous year. BrittanyFerries posted a €19.5 million(US$25.3 million) consolidated netprofit for 2004. Full-year operatingprofit stood at €15.3 million (US$19.8million). No comparative figures wereavailable. Turnover was €346.6 million(US$450.3 million), down -4.1% year-on-year.

The company blamed the passengerdecline on competition from low-costcarriers and from one of the othermajor cross-Channel French ports,Calais. France attracted fewer UK citi-zens as a tourist destination comparedwith Spain, Portugal and CentralEurope, it added. British residentsrepresent 82% of the clients onboardBrittany Ferries.

JAPAN. The popularity of travelto South Korea and China helpedboost the number of international pas-sengers flying on airlines of the JALGroup in January, according to TravelJournal International (TJI) Online.The consolidated number of passen-gers on international flights operatedby JAL Group’s three airlines rose

+8.7% from the corresponding month a year earlier to 1.3 million.

Except for the Pacific route, which posted a -1.4% dip from a year agoto 295,521 passengers, all other routes showed positive gains. Theseincluded 148,537 for China (+55.7%), 146,456 for South Korea(+21.8%), 383,491 for Southeast Asia (+4.2%), 121,078 for Europe(+4.1%), 106,029 for Guam/Saipan (+5.7%) and 88,768 for Oceania(+2.5%).

NETHERLANDS. The Leap Year effect in 2004 affected com-parisons with February 2005 traffic figures at Amsterdam AirportSchiphol, the airport authority said this week. The number of passen-gers using Schiphol in February fell -0.2% year-on-year. February2005 had one day fewer than February in the Leap Year.

The slight fall was also attributed to the spring school holidays occur-ring in the first half of the month, and being less busy than last year,said the company. As a result, the total number of passengersremained -3% below the February 2004 figures. This was partly com-pensated by a +2% upswing in transfer passenger volume.

Without the Leap Year effect passenger volume would have risen byaround +4%, said the authority. For the year to date (January andFebruary 2005), Amsterdam Airport Schiphol recorded a +3.7% pick-up in total passenger numbers.

Selected traffic numbers reported in the past week

Country Airline/Airport/Association Feb ‘05 vs Feb ‘04 (%)

Source: ©The Moodie Report Note: ‘total pax’ may include domestic traffic

Argentina AA2000 +14.4 (international)Argentina Buenos Aires Ezeiza Airport +14.2 (international)Austria Vienna International Airport +3.3 (total pax)China Air China +32.8 (international)China China Southern Airlines +85.2 (international RPM)Denmark Copenhagen Kastrup Airport +0.8 (international)Finland Helsinki Vantaa Airport +2.2 (international)Germany Berlin Brandenburg Int. Airport +189.1 (international)Germany Berlin International (Tegel) Airport +2.2 (international)Germany Hamburg Airport +3.4 (international)Greece Athens International Airport +9.0 (international)Hong Kong Cathay Pacific +24.1 (total pax)South Korea Seoul Incheon Airport +12.5 (international)Sweden LFV (19 airports) +2.0 (international)Taiwan EVA Airways +17.9 (total pax)Taiwan Taipei Chiang Kai-shek Int. Airport +27.7 (total pax)UK Bristol International Airport +8.0 (total pax)UK Monarch Scheduled +15.8 (total pax)US AirTran +15.1 (total pax)US Alaska Airlines +3.7 (total pax)US Continental Airlines +2.4 (mainline pax)US Delta Air Lines +4.7 (total pax)US Las Vegas McCarran Int. Airport +3.1 (total pax)US Minneapolis St Paul Int. Airport -1.1 (international)US Portland International Airport +80.4 (international)US Southwest Airlines +6.1 (total pax)US US Airways +3.0 (total pax)US Washington Dulles Int. Airport +10.5 (international)



CHINA. Inbound visitor numbers grew +13.6% year-on-year in February, reaching just under 8.6 million, as largenumbers of Hong Kong and Macau residents arrived on the mainland to celebrate Chinese New Year. Of the 8.6 mil-lion, some 1.3 million were foreigners, marking a growth of +14.4% year-on-year. Hong Kong residents made up 5.1million, an increase of +9.9%, Macau residents numbered 1.8 million (+20.4%) and Taiwanese residents 340,740(+37.4%).

Cumulative inbound numbers for this year indicate a +14.8% growth over last January and February. Traffic from for-eigners led the growth, with an increase of +31.3%, while Macau resident numbers rose +26.1%, Taiwanese grew+22.1% and Hong Kong residents went up +7.4%. Of China’s 16 largest inbound markets, only Russia, Mongolia, theUK and India registered falls since last February. Ten of the other 12 markets attained double-digit growth. Trafficfrom Malaysia grew +63.9%, from Thailand +53.9% and from Singapore +31.9%. Notably, traffic from Japan alsoincreased +27.5% year-on-year.

CHINA/US. Continental Airlines has announced final approval from the US Department of Transportation tocommence a service to Beijing from Newark Liberty International Airport. Daily non-stop flights will begin on 15 Juneand will be operated by a 283-seat Boeing 777-200ER. Continental will be the only US carrier offering a daily non-stopservice from New York to the PRC.

“The Beijing route holds exceptional long-term promise since it connects the world’s fastest growing economy with thefinancial centre of the US,” said Continental Chairman and CEO Larry Kellner. “Our new flight to China will offer ouraward-winning BusinessFirst service and will feature vast connecting opportunities from our hub at Newark Liberty.”

GERMANY. Munich Airport, the eighth busiest in Europe, is preparing for a major uplift in passenger numbers,especially to Eastern Europe. The airport is located at a crossroads between Western Europe and the ten countriesadmitted to the EU last May. In 2004, traffic to the ten new EU countries, mainly in Eastern Europe, jumped by +35%and is set for more growth as the EU expands.

Michael Kerkloh, Chairman of Munich Airport’s Executive Board, said that intercontinental connections were up +27%in 2004, while overall passenger numbers leapt by +10%. Some 26.8 million passengers used Munich Airport in 2004,making it the eighth-busiest airport in Europe. It aims to top 50 million passengers in 2015. Kerkloh said that in 2005he expects the airport to see about a +6% pick-up in passengers and a +4-5% jump in revenue.

Meanwhile the airport has increased its flight services, including twodaily departures to Chicago and Washington, in its new timetablewhich operates until 29 October. On 2 May Lufthansa will launch adaily connection to Washington. Lufthansa’s Star Alliance partnerUnited Airlines will begin flying daily to its Chicago hub on 8 June.With the existing services of Lufthansa to Chicago and United Airlinesto Washington, each of these US cities will have two daily connectionsfrom Munich. Air China has added another weekly departure to Beijing,bringing the total to four. Air Transat will start a weekly service toVancouver via Calgary on 17 June to complement its two weeklyflights to Halifax and Toronto.

For the summer timetable period the airlines have scheduled a total of252,000 take-offs and landings – a +5% increase on the number ofmovements in the previous year. This upswing develops Munich’sdomestic and international route network and boosts the airport’s hubfunction.

GERMANY. TUI, Europe’s largest tourism group, has posted abig improvement in operating results and profit for 2004. Followingtwo difficult years, the tourism division saw an expected recovery, saidthe firm. Earnings by the division rose by around +75% to €362.4 mil-lion. Turnover climbed by +3.6% to €13.1 billion, with customernumbers growing by +0.9% to 18.4 million holidaymakers.

THE MOODIE REPORT TRAVEL & TOURISM NEWS

Central Europe, which comprises the German market and recently went through a very difficult phase, contributed“disproportionately” to this upturn, the company said. The tourism division continues its upward trend in 2005,according to TUI. The group is recording an increase of +7% in booked turnover and +6.6% in customer numbers forthe current summer season. The Western Europe sector reports a “particularly gratifying” trend with double-digitgrowth rates. CEO Michael Frenzel said he expected tourism to generate “robust” growth in 2005, perhaps at double-digit levels. Following China and Russia, the focus will now be on India as an additional market.

INDONESIA. Up to 1,000 people may have been killed by Tuesday’s earthquake which hit the Indonesian islandof Nias, southeast of Aceh, Sumatra. The island is populated by 65,000 people and, despite its remote location, is popu-lar with foreign surfers. Nias had already been badly affected by the 26 December tsunami. More aftershocks are likelyto hit the country and the nearby regions, predicted the Japanese meteorological agency. Masahiro Yamamoto, an offi-cial of the agency’s earthquake and tsunami observation division, said: “Possibilities are high that further aftershocksmeasuring about eight on the Richter scale will occur there.”

Pacific Asia Travel Association (PATA) President and CEO Peter de Jong commented: “It is important that the latestsetback does not disrupt the physical and psychological reconstruction process under way in travel-dependent commu-nities in the region.” PATA observed that “there was seemingly only minimal change in wave patterns at sea, and few, ifany, areas outside Nias suffered structural damage”.

Its travel-member organisations in the region will keep PATA informed of any change in traveller sentiment and travelpatterns as a result of the recent earthquake.

JAPAN. Bookings at leading travel company H.I.S. for travel during the Golden Week period (27 April to 8 May)are ahead +130% compared to the same period last year, Travel Journal International (TJI) Online reported. Theresults are based on bookings received through 15 March for the Kanto region including Tokyo. H.I.S. attributed thestrong results to having begun sales of Golden Week products some 10 days earlier than usual allied to a better combi-nation of national holidays and weekends this year.

The most popular single destination for products combining air tickets and local tours was Hawaii, followed by Guam,New York, Bangkok and Seoul, said H.I.S. In addition to regular beach resorts, long-haul destinations in Europe, par-ticularly to Italy, France and Turkey, and the US are in higher demand this year. H.I.S. plans to increase the number ofcharter tours during this year’s Golden Week. It will employ 24 charter flights during the period instead of ten last year.In addition to setting out some complete charters to Hawaii from Haneda airport, H.I.S. plans to cover Guam, Cebu,Seoul and Cambodia.

In other news, the number of international passengers flown on Japan-ese airlines in 2004 reached 17.7 million, according to figures justreleased by the Ministry of Land, Infrastructure and Transport (MLIT).The result, reported by TJI Online, shows a strong recovery from theSARS and war-hit 2003. But the count fell short by 1.6 million of theall-time high set in 2000.

Outbound traffic for all eight international regions posted positivegains from a year earlier. The numbers of passengers transported withyear-on-year comparison by destinations/regions were: China routes,2,672,198 (up +58.5%); Taiwan 1,483,914 (+46.6%); South Korea1,958,937 (+18.5%); other Asia 3,562,775 (+18.1%); North America2,084,405 (+7.5%); Pacific 3,289,688 (+13.5%); Europe 1,992,236(+12.9%); and Oceania 659,430 (+5.6%). China and Taiwan showeddisproportionately high percentage rises due to the ravages of SARS in2003, which affected their Japanese tourism businesses disastrously.

Note: The Moodie Report works closely with Travel Journal Interna-tional Online, which is the pre-eminent provider of information on theJapanese travel industry. To subscribe, please go to http://tji.tjinet.co.jp

LEBANON. Last Saturday’s fatal bombing in a mainly Christianarea of capital city Beirut signals a further deterioration of the politicalclimate with potentially big repercussions for Lebanese society and





THE MOODIE REPORT DATA ROOM – RETAIL SALES RESULTS

ARGENTINA. InterBaires has begun the year strongly at its flagship airport location, Buenos Aires Ezeiza. InJanuary sales rose +32.5% year-on-year on passenger growth of +19.3%. Penetration rates rose +12.1% in the monthand spend-per-passenger by +13.7%. February saw the momentum maintained with a +17.8% rise in sales on an +11%passenger increase. Penetration was up +8% over last February and spend per passenger by +8.8%.

BAHRAIN. Bahrain Duty Free Shop Complex (Bahrain Duty Free) has posted a +31% increase in net profits toBHD2.61 million (US$6.9 million) for 2004 on an impressive sales rise of +35%. The listed company’s consolidatedgross profit climbed to BHD6.95 million (US$18.4 million), up +29.2% year-on-year. The positive performance waspartly attributed to a +20% increase in the number of passengers to 5.1 million using Bahrain International Airport in2004 but the retailer’s own emphasis on store investment and marketing has enabled sales growth to outstrip the risein passengers.

John Sutcliffe, Managing Director of Aer Rianta International-Middle East, one of Bahrain Duty Free’s main share-holders and which manages the airport operation, told The Moodie Report: “Our average spend was well up and oursales were up significantly. They’re excellent results and very good numbers.” Based on the strong performance in 2004,the shareholders’ meeting on Monday approved a total cash dividend of 45% for the year. This includes an interim div-idend of 20%, paid in June 2004. Shareholders also agreed on a 25% bonus issue.

Local reports of the results made much of the company’s intentions to set up a duty free shop on the Bahraini side of the

business. The country’s tourism sector, for example, had been enjoying a prolonged boom period as international andintra-regional travellers flocked to the re-built attractions of this historic city that suffered a catastrophic civil war from1975 until 1990.

But Lebanon has been in a state of high tension since the assassination of former Prime Minister Rafik Hariri on 14February. Two explosions in the past week have killed three people in areas opposed to neighbouring Syria’s presence inLebanon. Last weekend’s bomb killed two and injured eight. The massive blast was heard throughout the capital andtore through several buildings.

Already the tourism and leisure sectors have been hit. Local reports said that business has fallen among the street sidecafes, restaurants and pubs in the downtown district of Beirut, the scene of recent demonstrations. Beirut’s hotel districtis still recovering from the massive explosion on 14 February that killed Hariri and at least 18 others. Most hotels in thevicinity suffered blast damage, especially the St. Georges, Beirut’s most famous hotel. A dejected Fadi Khoury, owner ofthe St. Georges, told ABC News shortly afterwards. “It seems the country is returning to the old days of war.”

Aer Rianta International–Middle East (ARI-ME) Managing Director John Sutcliffe said sales at Beirut Duty Free hadbeen impacted by the difficulties but said overall they had held up well.

US. January saw a sharp +19.3% increase in Japanese international visitor numbers to Hawaii. Some 131,098 Japaneseinternational visitors came to the islands during the month, compared with 109,854 in January 2004. Some 60.9% wererepeat visitors and 39.1% first timers. Group tour visitors rose +13.9% to 59,580 and non-group numbers increased+23.8% to 72,213. Honeymooners (the single largest sector by purpose of visit) rose sharply, up +43.1% to 12,957.Overall pleasure travel was up +17.2% year-on-year.

Total international visitor numbers rose +26.6% to 214,850, figures that underline once more the huge importance ofthe Japanese market to Hawaii – and to its travel retailers such as DFS.

ARGENTINA. InterBaires has opened three new boutiques forErmenegildo Zegna, Ferragamo and Hermès at Buenos Aires EzeizaAirport. The elegant new boutiques are located in ‘shop 22’ in terminalA. At the same time InterBaires opened a new area for premium brandsin the watches, writing instruments, sunglasses, shirts and ties sectors.The new space is called ‘Alta Gama’ (high range). InterBaires CEOEnrique Urioste reports that sales have started strongly. For a full pic-torial report, see www.TheMoodieReport.com

ASIA PACIFIC. Hot on the heels of this month’s Grand Open-ing of the spectacular DFS Galleria Okinawa, DFS Group has justopened its new Hainan Meilan International Airport (HMIA) duty paidretail complex. And it has begun work on a project that it believes willonce again set new DFS standards – the complete refurbishment of itsDFS Galleria Guam in Tumon Bay, Guam.

DFS Group last year struck a 10-year retail concession at HMIA –China’s seventh-largest airport – on the resort island of Hainan. It seesthe operation not only as an important business in its own right but asan important showcase for its retailing acumen to the Chinese main-land. It will offer a wide range of bridge and luxury brands and, in adeparture for the retailer, an extensive fresh foods selection. DFSChairman Ed Brennan told The Moodie Report: “We are pleased theairport has offered us this unique retail opportunity and with the strongsupport we received from our brand partners.”



King Fahd Causeway, the motorway bridge linking Bahrain and Saudi Arabia. But Sutcliffe said the project is still at feasi-bility study stage. Progress has been delayed by the GCC countries’ discussions over a planned common customs policy.Effectively a single market with harmonised duties would negate the need for a duty free shop on a road border crossing.

Sutcliffe said that the company nevertheless remains very keen on the project, duty free or duty paid. “It’s a fantasticopportunity and there are eight or nine million people crossing each year – bigger than many airports.”

CROATIA. DFS Airport Dubrovnik turned in an impressive retail performance last year with sales growthoutstripping passenger growth. Duty free sales rose +45.5% to €5.4 million, compared with €3.7 million the yearbefore. International outbound passengers rose by +30.2% to 341,836 out of a total passenger base of 880,967.

Encouragingly, average spend per passenger rose +11.8% to €15.90. The total number of individual duty free transac-tions rose +46.7%, giving a store penetration rate of 59.89%, up from 53.13% in 2003. Average spend per transaction(spend per customer) eased by 0.8% to €26.47.

Top outbound destinations by country were Germany (20.8%), France (20.2%), the UK (17.8%), Ireland (9.4%) andBelgium 5.6%. The strong 2004 results continue the impressive comeback of DFS Airport Dubrovnik under the lead-ership of Manager Trade Department Niksa Milanovic. The business and the country’s tourism industry were devastat-ed by the war in 1991 and 1992 when the airport was bombed and later occupied by the invading Yugoslav army. Theinternational air terminal was reconstructed and extended in 1999 and in 2002 the duty free shop expanded.

Look out for an extensive profile of DFS Airport Dubrovnik on The Moodie Report.com in the summer.

JORDAN. Jordanian Duty Free Shops, which operates stores at Jordan’s border crossings, posted a net profit ofJOD2.5 million (US$3.5 million) in 2004, up +67% from the previous year. Earnings per share rose to JOD0.51(US$0.83) in 2004. Shareholders’ equity increased to 7.3 million dinars (US$10.3 million) at the end of 2004 fromJOD6.8 million (US$9.6 million) last time.

In July 2004 the company opened a new duty free shop in Jaber, on the Jordan–Syria border. The shop is the 16th dutyfree outlet operated by the firm at the country’s land crossings.

THE MOODIE REPORT NEWS – LANDLORDS & RETAILERS



Meanwhile the company has begun work on a US$20 million revamp of DFS Galleria Guam, opened six years ago inTumon Bay, and considered one of the retailer’s finest achievements. But a big refurbishment of the store, already underway, will see it taken to new heights when the new facility opens next March. Brennan commented: “The renovation ofTumon Bay allows us to expand bridge and luxury businesses including better showcasing boutiques inside this impor-tant store.”

In Guam the retailer will further underline its increasingly upscale brand focus. This will happen across all keycategories, notably in luxury watches and the fashion and leather section, which will be “moved up one more notch”.Destination and entertainment, though important, will be less of a focus than in the past with the main emphasisswitching to brands being the entertainment – and enjoying the greater space that will be freed up.

CHINA. Beijing Capital International Airport (BCIA) has reshaped its management structure. Formerly a unit with-in the airport authority, the commercial part of the organisation has been split from the authority, and, from January,has stood alone as the Beijing International Commercial and Trading Company. This new company handles not onlythe commercial operations of BCIA but also those of airports in Wuhan, Jiangxi, Sichuan, Tianjing and Fujian, all ofwhich have been acquired by BCIA.

Foster Fu, Manager in charge of Duty Free Purchasing of the new commercial company, told The Moodie Report:“We wanted to follow trends in other airports, where non-aeronautical management of the airport is independent fromits aeronautical operations.” At the moment, China Duty Free Group (CDFG) still has an exclusive right to supply theairport with products, Fu confirmed, though he did not rule out changes in the future.

He is now exploring new display and service strategies and concepts for a new terminal three which will be up by 2007.He noted that “display and service standards are still low” at the current terminals. Sales, however, are growing. Com-pared with 2002 (2003 was affected by SARS, and hence not representative), sales grew +66% overall last year. In par-ticular, cosmetics and fragrances saw the largest growth, up +104% over the same period a year earlier. Tobacco andliquor grew more modestly, up by +14%.

The airside areas of the terminal are “very full” at the moment, so only minimal changes are being made to the offer-ings. A duty free shop located across from the Hermès boutique, for example, has been turned into a Chinese tradition-al crafts store. The airport is also planning to introduce a Cartier boutique this year. “We are prepared to let go of thejewellery shop to accommodate this new Cartier boutique,” Fu said.

China Duty Free Group declined to comment on the possibility of changes to its supply relationships with Beijing. Asalready reported, the company has recently restructured its manage-ment and has ambitious plans to develop its business in 2005. Moredetails will be revealed at the appropriate moment.

MALAYSIA. Dynamic Malaysian retail concessionaire DimensiEksklusif is enjoying a strong year as it gears up for the expected retailtenders at Kuala Lumpur International Airport (KLIA). Current con-tracts, extended because of the SARS crisis in 2003, expire in June.Dimensi Managing Director Zainul Azman told The Moodie Reportthat he is hoping not only to extend his company’s retail concessions atthe airport but to expand the space as well.

The company has been running five shops in the airport, dedicated tofragrances, cosmetics, cigars and fashion (Christian Dior and Ferrag-amo). Zainul said that the company’s sales for fragrances, cosmeticsand cigars have been growing +30% year-on-year. Sales at the fashionboutique were also on the rise, at +15% year-on-year.

Zainul started Dimensi a decade ago after seeing an opportunity in theformer Subang Airport. Then a downtown retail executive, he decidedto strike out on his own. When KLIA was built, Dimensi obtainedfive-year concessions to run the five stores. His company now operatesan area of 300sq m for its fragrances and cosmetics stores, 150sq m forthe cigar store and 200sq m for its fashion boutiques. Zainul wantsperfumes and cosmetics to eventually take up 600sq m.



He noted however that competition will be tough. “All our competitors which are already in Singapore and Thailandwill go all out to fill the missing link in Malaysia. We will have to strongly defend our position,” he said. He added thatif offered, the company will also consider opening a store selling branded lifestyle products. For more details seewww.TheMoodieReport.com

NETHERLANDS. KLM Tax Free Services has unveiled details about its jointly-operated megastore at AmsterdamAirport Schiphol, opened earlier this month with Kappe International. The 1,000sq m store, located in the so-called‘run area’ near the recently-extended Lounge 1 in the Schengen Area, offers liquor, tobacco, fragrances and cosmeticsunder one roof.

Ico Smid, Head of Airport Retail at KLM Tax Free Services, said: “The new store is designed to ensure that travellerscan do their tax free shopping at speed. It boasts a variety of new techniques, including a ‘narrow casting system’ thatallows digital promotional messages to be directly conveyed to various target groups. This ensures that shoppers caneasily find whatever products they are looking for. Flat screens and scan kiosks draw shoppers’ attention to promotionalitems and discount offers.”

The store is designed to be clear and convenient, he added. “The new store has 1,000sq m of floor space. The 18m wideentrance is very enticing and the smart signposting makes it easy for customers to find whatever they need,” he said.

SINGAPORE. Times Newslink was the only bidder in the tender held by the Civil Aviation Authority of Singa-pore (CAAS) for its books/magazines/stationery concessions at Singapore Changi Airport terminal two departure/tran-sit lounge. The contract runs from 1 July 2005 to 30 June 2008. For bid details see www.TheMoodieReport.com

SPAIN. Spanish retailer Aldeasa said on Monday that its board backed the improved €768 million takeover bidfrom Italian retail-to-catering chain Autogrill and Spanish-French company Altadis and recommended that itsshareholders accept the offer.

Autogrill/Altadis offered €36.57 a share, up from its previous bid of €33 a share. Aldeasa’s shareholders have until 14April to accept the proposal which has been approved by the European Union and the Spanish stock market regulator.Altadis is Aldeasa’s largest shareholder with a 34.5% stake.

For a full report see www.TheMoodieReport.com

US. Hartsfield-Jackson Atlanta International Airport’s Department of Aviation Contracts Services Divisionannounced on Wednesday that it will rebid its duty free concession –the latest chapter in one of the industry’s longest-running and mostcontroversial tender sagas. Concession Manager Kyle Mastin told TheMoodie Report: “It is correct that the City of Atlanta will bid the dutyfree concession.”

He said no timing had yet been decided and there was “nothing spe-cific” in terms of the detail of the bid. However, he added, it would notbe a Request for Proposals (RFP) but a “straight bid” in which thehighest qualified offer would prevail.

Background: Incumbent concessionaire HMSHost (owned by Auto-grill) is operating the contract on a month-by-month basis as the legalbattle over which company should succeed it has raged. Last Octoberan Atlanta Superior Court judge overruled the city’s award of the dutyfree contract to a partnership between DFASS and Franklin & WilsonAirport Concessions.

Earlier, in April 2004, a city hearing officer had ruled in favour of theDFASS partnership after a challenge to the award was brought by DutyFree Americas-led Atlanta Duty Free. The latter had claimed thatHartsfield-Jackson Atlanta International Airport General Manager BenDeCosta had exceeded his authority in overturning an initial Depart-ment of Aviation recommendation to award the duty free contract toAtlanta Duty Free.

SINGAPORE. The Civil Aviation Authority of Singapore (CAAS) has attracted strong interest for a number offood & beverage tenders. These included a Brand Name Specialty Coffee Concession(s) at T1 Departure/TransitLounge. The contract runs from 24 May to 23 March 2007. There were three bidders: Pacific Coffee Company which offered additional rental of 25% of total monthly gross sales up to S$80,000; 30% oftotal monthly gross sales for sales above S$80,000 and up to S$100,000; 35% of total monthly gross sales for salesabove S$100,000 or Minimum Monthly Guarantee of S$20,000, whichever is higher. Starbucks Coffee Singapore offered additional rental of 20% of total monthly gross sales or Minimum MonthlyGuarantee of S$16,000. The Coffee Bean & Tea Leaf (Singapore) offered additional rental as follows: (i) 22% of total monthly gross salesfor sales of S$0 to S$80,000; plus (ii) 23% of incremental monthly gross sales for sales above S$80,000 and up toS$100,000; plus (iii) 25% of incremental monthly gross sales for sales above S$100,000 or Minimum Monthly Guaran-tee of S$15,000, whichever is higher.

The Coffee Bean & Tea Leaf (Singapore) was the only bidder in the tender for a Brand Name Specialty CoffeeConcession at Departure/Transit Lounge West, in T1. (Concession B). It bid (i) 16% of total monthly gross sales forsales of S$0 to S$20,000; plus (ii) 17% of incremental monthly gross sales for sales above S$20,000 and up to S$50,000;plus (iii) 19% of incremental monthly gross sales for sales above S$50,000 or Minimum Monthly Guarantee of S$3,500,whichever is higher.

Two companies presented offers in the tender for a 24-Hour Mini-Market Concession at Departure/Transit LoungeWest in T1. This contract runs from 1 June 2005 to 28 February 2007. Cheers Convenience Stores offered a monthlyfixed rental of S$10,000 plus an additional monthly rental amounting to 8% of the monthly gross sales. Cold StorageSingapore (1983) offered a monthly fixed rental of S$11,000 plus an additional monthly rental amounting to 9% of themonthly gross sales.

UK. Alpha’s Flight Services (AFS) division has won seven out of eightpossible Bond & Catering Awards at Britannia Airways’ annual cateringseminar. Individual awards included the following: AFS Glasgow wonthe UK Catering Merit 2004 for continuous improvement throughoutthe year; the East Midlands and Stansted units received UK CateringOn Time Awards; AFS Luton won UK Catering Performance 2004;AFS Birmingham and AFS Cardiff were each awarded Bond Merits;while AFS Orlando Sanford won the Outstanding Contribution hon-our. This last award was in recognition of catering provision during lastyear’s hurricane season when most airport facilities were forced to close.

UK. BAA Retail has signed a deal with leading London pub groupGeronimo Inns which currently operates 14 award winning and Michelin-rated pubs across the capital. The prime 381sq m site is a uniquelifestyle food focused pub, located between WH Smith and Boots, inthe main thoroughfare of Heathrow terminal one’s redeveloped andexpanded retail space. This will be opened in May 2005.

The Geronimo airport site will be aptly named The Tin Goose afterthe Ford Motor Company’s first all-metal aeroplane, built in 1927. Thegastro pub will be themed around retro travel of the 1930s and 40s. UKAirport Retail Managing Director Colin Hargrave said: “The cateringoffer is an absolutely vital element of the whole airport experience –



In last October’s ruling, Judge Russell did not rule on who should get the contract, saying it was not her role to awardthe tender. That decision was up to the city, she said. The Moodie Report is currently seeking reaction from both DutyFree Americas and DFASS. We understand that there could be further imminent developments and will keep readersposted. Last October’s ruling is currently under legal appeal from DFASS at state level.

Duty Free Americas declined to comment when contacted by The Moodie Report. DFASS was considering its responseat press-time.

FOOD & BEVERAGE NEWSTHE MOODIE REPORT



over 90% of our travellers use these services and facilities – and we’ve invested strongly over the past few years todevelop new concepts and introduce new brands to further strengthen that experience.”

The Tin Goose brings the BAA F&B offer to over 130 bars, restaurants, cafes and coffee houses throughout its sevenUK airports.

PEOPLE, EVENTS & NOTICESTHE MOODIE REPORT

SINGAPORE. David Pang, CEO of Hong Kong International Airport and a member of the Governing Board ofAirports Council International (ACI), will be the keynote speaker at the Gate One conference in Singapore on 19 May.Tony Davis, CEO of low-cost carrier Tiger Airways, and Kerrie Mather, MD of Macquarie Airports, will also speak atthe event. Other influential speakers will be announced shortly.

Pang will speak on Airport Privatisation and the Commercial Imperative, a theme which will be developed by airports,airlines and commercial enterprises during the two-day conference.

He will also give an airport owner’s perspective in the session Expanding Commercial Opportunities, during which theissues that airport owners, retailers and financiers seek in growing the commercial market before and after privatisationwill be aired. Registration for the event opens on 24 March. Attendees include the President and CEO of the newChubu Airport near Nagoya with his key executives. Sponsors include Select Service Partner, Porsche Design, Nestlé,Eye, JC Decaux and Hugo Boss.

The conference focuses on the development of non-aeronautical airport revenues worldwide and attracts airportauthorities, retailers and suppliers. It is staged by Tax Free World Association with the co-operation of ACI and a con-tribution from the Centre for Asia Pacific Aviation. For details and registration visit www.gateone-conference.com

UK. The second Trinity Forum is to be held in London on 22–23 September (opening cocktail on 21 September). Anoutstanding programme featuring the industry’s leading retailers, airports and brand companies as well as a number ofleading non-industry voices will be published in April. More details next week.

The Trinity Forum, follow-up to the enormously successful inaugural event which took place in June 2003, is held onlyevery two years to maintain its allure and quality.

UK. P&O Ferries’ Senior Category Manager Tanya Langley-Jones has departed the company amicably as the result ofa restructure of its retail operations. Langley-Jones was highly rated by the supply community, particularly in the fra-grances and cosmetics sector. She has not been replaced, pending the wide-ranging internal review. This is being car-ried out in conjunction with retail consultant Rebecca Cotterall who is taking over Langley-Jones’ responsibilities inthe interim.

P&O, in common with rival SeaFrance, has been hard hit in recent weeks by delays and cancellations caused by berth-ing problems in French ports. The collapse of a dock in Calais in February led to major capacity problems, leaving theport with only two berths big enough for large cross-Channel ferries, and one of them was closed for repairs soon after.

And just as business threatened to get back to normal, France’s CGT Union began a series of strikes. Further berthingproblems since at one point saw P&O down to a one-berth operation – not the perfect lead-up to the crucial Easterperiod. Currently only two berths are working in Calais out of a possible seven due to malfunctioning. Passenger trafficand travel retail sales have been hard hit as a result. “Business is dire,” noted one supplier, “and freight is taking a prior-ity over booked car passes. The poor retailer has not had it easy this year.”

US. Andrea Robinson has been appointed to the newly-created position of Chief Marketing Officer, Estée Lauderbrand. Robinson is currently President of Ralph Lauren Fragrances Worldwide (part of the L’Oréal group), a role shehas held since 2001. Robinson will lead global marketing for the Estée Lauder brand skincare, make-up and fragranceworldwide. She will take up her new position sometime “this spring” and will report directly to Estée Lauder GlobalBrand President John Demsey.

Thank you for your readership and support of The Moodie Report.

Martin Moodie, Editor

Documents

THURSDAY 31 MARCH 2005 WELCOME FAST, … 31 MARCH 2005 FAST, FACTUAL, FREE Aer Rianta Interna-tional–Middle East Managing Director John Sutcliffe unveiled a superb set of annual