October 18, 2017 TnH Global

12 Airports Authority of India airports to woo passengers with retail therapy, better dining experience

The Airports Authority of India (AAI) is gearing up to provide passengers a better shopping and dining experience at 12 of its airports, which will boost its revenue. AAI has started floating separate requests for proposals (RFPs), inviting a master concessionaire to set up food and beverage (F&B) outlets, including at least an international and a national brand for smaller airports.

There will be a separate bidding process for retail outlets, which will start from October 23. The 12 airports are Bhopal, Indore, Raipur, Lucknow, Calicut, Thiruvananthpuram, Trichy, Amritsar, Bhubaneshwar, Srinagar, Guwahati and Goa.

“The concessionaire shall incur all capital expenditure in relation to the development, setting up, operation, maintenance and management of the F&B outlets,” as per the RFP document. These airports currently have a handful of vendors which bid separately to set up food stalls and retail outlets.
AAI now plans to bring them under a master concessionaire at each of these airports, according to an official who spoke on condition of anonymity.

The official said the 12 airports have been selected on the basis of passenger traffic. Currently, only two AAI airports – Chennai and Kolkata – have a single agency each for retail and F&B outlets. AAI has already sent out six different proposals for as many airports for setting up of F&B outlets on October 6 and October 11 and will be issuing remaining six bid documents on October 23 and October 30.

According to the terms and conditions laid out, a concessionaire will have to provide atleast one international and one domestic brand at airports with passenger traffic less than 2 million per month. For airports with higher traffic, the winning bidder will have to offer atleast two outlets of an international brand. The term of concession is for seven years.

For the use of space on airport premises the winning bidder will pay AAI a concession fee equivalent of the “quoted monthly amount over and above the minimum monthly guarantee (MMG) with annual escalation or 24 per cent of fixed revenue share of the monthly net sales,” according to the document. Bidders will compete on the highest minimum monthly guarantee offered to AAI.