Mes: enero 2019

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Ireland: Dublin Airport retenders stores after legal battle

The DAA has put the concessions for its lucrative electronics stores at Dublin Airport back out to tender after a legal bust-up last year.
The semi-State airport authority had put the contracts for two stores, one at T1 and another in T2, up for grabs in October 2017.

The stores are operated under the Dixons Travel brand, which is part of the Dixons Carphone group.

In April last year, Dutch retailer Capi challenged the DAA’s decision to award US airport retailer InMotion Entertainment a reported €50m contract to operate the two stores.

Capi – which has stores in Denmark, Germany, the Netherlands, Norway, South Africa, and Sweden – had submitted a bid to operate the outlets in early January last year.

In February, it was informed by the DAA that it had come second in the process.

Capi then took a case to the Commercial Court. It claimed that the DAA had breached Irish and EU law in how it conducted the competition, and had failed to answer questions about the award of the contract.

In April last year, the case was admitted to the fast-track Commercial Court, and the court ordered that InMotion Entertainment be made a notice party to the action.

Capi had sought damages from the DAA, and also a number of orders from the court, including that the decision to award the contract be quashed and that the DAA be asked to reconsider its decision.

It’s thought that the DAA voluntarily decided to re-run the competition to operate the two outlets, without any court order being issued to that effect.

The two stores had a combined annual turnover of more than €11m in 2017. The outlet in T1 generated revenue of just under €6.1m that year, while the T2 store racked up almost €5.2m in sales.

Dublin Airport handled more than 30 million passengers last year, and in 2017 the figure was slightly less than that. In 2017, T2 handled about 12 million passengers, and T1 roughly 18 million.

The DAA has said the contract to operate the two stores is expected to commence on June 5 this year and terminate in 2024.

Source: Independent.ei

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One of the original Indian airport concessionaires now seeks to take on Thiruvananthapuram concession

India’s Cochin International Airport Ltd (CIAL) has revealed it plans to bid on a tender to operate Thiruvananthapuram Trivandrum International Airport under the terms of a 50-year concession contract.

Thiruvananthapuram’s Trivandrum International is one of six airports to be privatised by way of a P3 deal in India;
The airport is about 200 km south of Cochin, India’s very first P3 deal; now that airport wants to take on Thiruvananthapuram’s concession;

Serving the city of Kochi in Kerala state Cochin International Airport was the first airport in India developed under a public-private partnership (PPP or P3) model and was funded by a variety of public and private sector shareholders including the Government of Kerala (the largest at 33.3%), Airports Authority of India (which remains a fixture in all the Indian airport privatisations), Air India, various banks and nearly 10,000 non-resident Indians from 30 countries.

In what is a more diverse concession ownership pattern than at any of the ‘big four’ of Delhi, Mumbai, Bangalore and Hyderabad, CIAL can be considered to have been a success. Cochin International Airport is the busiest and largest airport in the state of Kerala and in 2017 it catered for almost two thirds (63.86%) of all air passenger movements in the state. It is also the fourth busiest airport in India as measured by international traffic and the seventh busiest overall.

In 2017, the airport handled around 9.7 million passengers and will have passed through the 10 million barrier in 2018 despite the growth rate stalling and then reducing from a peak of 21% in 2015 to just 5.7% in the first 11 months of 2018. It is the major gateway to the tourist-oriented state both domestically and internationally.

The largest airline by capacity is Indigo, at over 40%. The LCC Air India Express, while a comparatively minor player, is headquartered in the city. The airport operates three passenger and one cargo terminals with Terminal 3 one of the largest terminals in India.

So CIAL’s credentials for operating airports are well established but what could it bring to the Thiruvananthapuram Trivandrum International Airport (TTIA)? TTIA is around 200 km to the south of Cochin. Its passenger numbers are a little less than half of those at the larger airport. Passenger growth increased to over 14% in 2016 but has since slipped to 9.9% (2018 first 11 months).

The Airports Authority of India-owned airport is the second busiest in Kerala after Cochin and the fourteenth busiest in India. One peculiar feature is that it is the closest to the sea of all Indian airports. While also serving tourism it is close to technological parks and to the Vizhinjam International Seaport which is under construction.

Its capacity on foreign routes is actually considerably higher, at 54.4%, than at Cochin (39.2%) and the distribution of seat capacity by airline bears similarities to that at Cochin. It lacks the same degree of impact from Emirates Airline, Etihad Airways and Qatar Airways but those services are in place along with selected Southeast Asian airlines. Scoot for example will replace Silk Air in 2019.

It is a peculiar situation and one that is typical in India where the red-tape-bound privatisation process is something of a mish-mash. If CIAL is successful it would leave both airports partially under the control of AAI and a variety of private sector organisations, with CIAL in overall control, and competing with each other for the same foreign tourist and business traffic.

Source: The Blue Swan. CAPA

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Italy’s new government wants new airports

Italy’s Deputy Prime Minister and Minister of the Interior Matteo Salvini said he is in favour of new airport construction projects in Italy. “Italy needs more ports, more airports, maybe coordinated together”, he said, adding, “from my point of view, the more you travel the better. The more opportunities for business work and fast travel by plane, by car, by train or by boat there are, the better”.

The government in Italy is a new one, since May-2018. No political group or party won an outright majority in the general election, resulting in a hung parliament. Following 88 days of negotiations and several impasses, a law professor, Guiseppe Conte was appointed as the prime minister with support from the ‘League’, or Northern League, a right-wing political party, and the Five Star Movement, an anti-establishment left-leaning party.

In Aug-2018 the new government faced its first major test of public opinion when the Polcevera Viaduct on the A10 motorway at Genoa collapsed, killing 43 people. The toll road was operated by Atlantia, which is also an airport investor, in Aeroporti di Roma and other Italian airports.

The collapse raised concerns about the general condition of infrastructure in Italy. Infrastructure investment in Italy was reduced dramatically after the 2008 financial crisis. As such it may have prompted a reappraisal of infrastructure needs, leading to this announcement.

A previous administration, together with ENAC, the civil aviation authority, actually considered reducing the number of airports in the country to a manageable 12 or so, on the basis that there were too many. That was perhaps a surprising observation when one takes in to account that it is the partial privatisation of many of Italy’s airports, especially the smaller ones which typically only see LCC flights, which has been an important contributor to rising passenger numbers throughout the country.

Italy has 38 commercial airports with annual passenger numbers ranging from 40.9 million to 164 million, which in 2017 handled 175.4 million passengers in total, or an average of 4.61 million each. If there is a gap it is to the south of Rome, where a new, mainly low-cost airport for the city was once proposed.
The CAPA Airport Construction Database lists only one new airport under construction or planned in Italy and that is the USD17 billion, 100 mppa, four-runway proposed new Brescia-Verona Airport which was to have been developed by a consortium of private investors named Europe 1 and led by China’s Sīxiăng Holding and Aviation Economics. It would also have been a new airport for Milan, which is already served by three airports but in a congested space, but the initiative seems to have been lost.

So Matteo Salvini has a point about new airport development, now that the rather strange proposal to synthesise the existing ones down to 12 seems to have been dropped. If he is thinking that the state should provide the initiative though that is not traditionally how things are done these days in a country that has been wedded to the concept of privatisation for several decades now, and across most sectors.

The people he needs to be convincing are at firms like AdR/Atlantia, SAVE, the operator of Venice Airport, and private equity houses like F2i, which has a hand in six Italian airports. Or foreign operators like Vinci which have an eye for good business opportunities. As for joint port/airport operation that is a tougher call but there are firms, for example in the UK and Hong Kong, which operate both ports and airports.

Source: The Blues Swan, CAPA.