Middle East Duty Free

Transcription

1 By Martin Moodie A dynamic year in Middle East Duty Free A year ago Middle Eastern duty free retailers gathered at the MEDFA conference, encouraged by the rapidity of the commercial recovery following the Iraq war. Since then we have seen nothing but good news from the region s travel retail sector. The Moodie Report.com s unique online diary has been tracking commercial progress during an amazing year for the region s industry. We present summarised highlights of the events, issues and results that have made the past 12 months arguably the most exciting period in the sector s history. NOVEMBER 2003 Dubai A new chapter in the regional industry s development begins as its first duty free and luxury brands exhibition, Middle East Exclusive, begins on 28 November. Justin Boutros, Managing Director of show organiser Channels Exhibitions, says: The response is very encouraging, with 106 exhibitors from 25 countries and in excess of 300 brands. Trade visitor response has also been keen with over 700 pre-registrations, including delegations from Bahrain, Sharjah, Abu Dhabi, Jordan, Egypt and several other African countries. Tunisia MEDFA Board Member Société Hamila pour le Commerce et l Industrie wins the five-year inflight duty free concession onboard Tunisair, The Moodie Report reveals. It is a major boost to Hamila, which already enjoys a powerful portfolio of duty free operations in Tunisia, including a diplomatic store, ferry and port shops, ships chandling and inflight sales. General Director Tarek Hamila says: It s excellent news. We now have both Nouvelair and Tunisair, and our airline business is growing very well. DECEMBER 2003 UAE The Middle East s newest airline Etihad Airways begins flights to Damascus in Syria and Amman, Jordan, followed by the Egyptian capital Cairo a week later. The Abu Dhabibased airline is also setting up its own holidays division to handle inbound and outbound travel from Abu Dhabi. Vicepresident operations and technical Werner Borchert tells Gulf News that by 2005 or 2006 Abu Dhabi will be a gateway to Asia with a flow from Europe and America. UAE Dufry Tuxedo Sharjah Duty Free is appointed inflight concessionaire onboard Sharjah s new airline Air Arabia. The three-year contract marks Dufry s debut in the inflight retail sector. Air Arabia, the new national airline of Sharjah, currently operates two Airbus 320s and plans to double the fleet early next year. UAE The second Middle East Duty Free Association (MEDFA) Conference closes on 4 December, having attracted a record number of delegates around 270. The conference is characterised by optimism about the region s travel and duty free prospects, as retailer after retailer speaks of quick post-war recoveries, surging second half sales and a strong finish to the year. MEDFA President Mohamed Mounib says: This most difficult of years has actually shown the Middle East Duty Free industry in the most positive of lights. I have never felt more optimistic and confident in the industry s growth, both quantitative and qualitative. UAE Adel Zarouni is named the overall winner of the 11th Dubai Duty Free Golf World Cup held in Dubai on 5 and 6 December. Zarouni scores an impressive 77 stableford points over the two days at the Montgomery Dubai and Dubai Creek Golf & Yacht Club championship courses. The men s winner is Colin Matthews and the winner of the ladies competition is Nancy Miller. The event attracts a record field of 110. Dubai Duty Free Managing Director Colm McLoughlin describes the large turnout as testament to the sort of camaraderie we ve come to expect in the duty free business. Qatar Qatar Airways announces that it is to invite tenders for more than US$2.5 billion dollars worth of contracts to start building a new airport in Doha. Chief Executive Akbar al- Baker says phase one, offering a capacity of 12 million passengers a year, will be completed in He says the new airport needs to set new standards and needs to be more than an ordinary transfer point but part of a fantastic travel experience. A second phase, to lift the airport s capacity to 50 million passengers a year, will be completed by UAE In an unprecedented recognition of the integral role duty free plays in the travel business, Dubai Duty Free Managing Director Colm McLoughlin is honoured for his major contribution to the UAE s aviation sector. The award, 8 The Moodie Report

2 November 2004 MEDFA OFFICIAL GUIDE 2004 Chronology In recognition of services to the aviation industry, is made at the gala dinner of the Dubai 2003 Air Show. Bahrain The board of directors of Bahrain Duty Free approve a seven-year extension of the Aer Rianta International Middle East (ARI-ME) management contract, to the end of ARI-ME Managing Director John Sutcliffe says: This is fantastic news for ARI-ME. The decision will give stability to the operation, and allow current development plans to remain on track. UAE Dubai Duty Free celebrates its 20th anniversary on Saturday 20 December in memorable style by achieving record daily sales of AED 7.1 million (US$1.9 million), then giving it all away to charity. The anniversary offer providing shoppers with a -20% discount on all purchases has the desired effect of setting sales soaring, resulting in a phenomenal 35,733 sales transactions on the day. JANUARY 2004 Egypt The Chalhoub Group prepares to open its new retail operation at Cairo International Airport terminal one (first floor) in conjunction with Egyptair and the airport authority. Habchi & Chalhoub Managing Director Anthony Chalhoub tells The Moodie Report: The first board meeting is scheduled for around January 26th and we plan for an opening two or three days later. Chalhoub holds a high majority share in the newly-formed joint venture, which is investing heavily in a high-class retail offer at the refurbished terminal. Iran Gebr Heinemann-controlled Unifree lands the duty free contract at the new Tehran Iman Khomeini airport terminal in a joint venture with airport construction company TAV. The joint venture, trading as RTU, already operates the duty free stores at Istanbul Ataturk International Airport. Gebr Heinemann co-owner Claus Heinemann tells The Moodie Report: It s a real challenge to work there and we see a very good potential. Our Turkish partners are very flexible and very fast, and we will have the shops ready and the merchandise there by 1 February. Later, much will change. Bahrain Aer Rianta International Middle East (ARI-ME) Managing Director John Sutcliffe warns of the serious impact of drastic currency fluctuations in recent months. Our retail prices are now very attractive to Euro-based customers, but for others they are not, he notes. For some 18 months now we ve waited to see a significant [upwards] strengthening in the Dollar but it hasn t happened. Sutcliffe says the solution is not, as some suppliers have suggested, to move retail prices up. He says if the Dollar was to surge back, say +15%, after a +10% retail price increase, that would translate into a +25% consumer price increase, bad news for the many regional travellers buying in dollar-linked currencies. Suppliers, Sutcliffe argues, should share the margin pain from the additional volumes currently being generated. UAE Dubai Duty Free (DDF) reorganises its management team. As part of the reshuffle, General Manager George Horan is promoted to Deputy Managing Director. Ramesh Cidambi is named Director IT and Logistics, while Salah Tahlak assumes the role of Director Corporate Communications and Dubai Tennis Championships. In addition, Sean Staunton is named Manager - Operations, joining fellow senior management members Bernard Creed, Financial Controller; Anne Smith as Manager - Executive Office and HSE; and Sharon Beecham as Manager - Purchasing and Research. FEBRUARY 2004 UAE Abu Dhabi Duty Free enjoys a tremendous start to 2004, breaking the daily sales record for three consecutive days and achieving the highest-ever monthly sales in two decades. Managing Director Mohamed Mounib notes: These are fantastic results. Our average daily sales were AED774,551 (US$210,865) with our daily record being broken on three consecutive days. The highest, on 29 January was AED1,470,545 (US$400,344). The total month s sales are +42.6% ahead of January 2003 and % ahead of 2004 budget. UAE Dufry, one of the world s leading duty free retailers and owner of the long-time retailer at Sharjah Airport, is to be sold to a group which The Moodie Report reveals is headed by venture capitalist company Advent International, for an undisclosed sum. Bahrain A range of innovative new products and the introduction of a lucky draw are highlights of the new Gulf Air duty free catalogue launched this month by inflight concessionaire Aer Rianta International Middle East (ARI-ME). The catalogue features no less than 49 new items, eight world exclusives and a further 20 products not found on any other airline in the region. MARCH 2004 Middle East Gerry Crawford, General Manager of Phoenicia Aer Rianta Company (Beirut Duty Free), is leaving to take up a senior role in a new regional post at group headquarters in Bahrain. Crawford, who has played a huge role in driving the success of the acclaimed Beirut Duty Free operation, will be replaced by Denis Hourigan, currently Financial Controller at Bahrain Duty Free. In other developments, former Bahrain Duty Free Head of Retail and Marketing Martin Mullen joins Kuwait Duty Free as Retail Operations Manager. UAE Emirates, the world s fastest-growing intercontinental airline, is launching a new Dubai-Shanghai service next The Moodie Report 11

3 month. The new service will be the first-ever direct air passage between Dubai and mainland China, linking two of the world s fastest-growing markets. Initially, from 10 April, Emirates will operate three flights a week between the two cities. Daily flights will start from 15 May. Saudi Arabia The Saudi flag carrier Saudi Arabian Airlines announces that it transported 14.5 million passengers in 2003, up +2.3% on The passenger traffic during the period from July to October 2003 was a record high since the airline began. Saudi Arabian transported 921,000 pilgrims from 68 destinations worldwide during Hajj Bahrain Bahrain Duty Free has got off to a flying start in 2004 with sales running at +40% over the same period last year. Managing Director of parent company Aer Rianta International Middle East (ARI-ME) John Sutcliffe tells The Moodie Report: This year is phenomenal. Sales are a whopping +40% ahead year-to-date and barring mishaps we should finish +20% to +25% ahead by year end bearing in mind that this time in 2003 we were in the middle of the Iraq situation. The operation is currently gearing up for the inaugural Bahrain Grand Prix on 4 April. The shop at Bahrain looks fantastic right now with the Formula One Grand Prix theme, Sutcliffe notes. A superb Formula One promotion is later rewarded with a Frontier Award for Best Marketing Campaign by a Retailer. UAE Abu Dhabi Airport Catering & Duty Free hosts the world s first-ever World Sand Golf Championship on 8 March at the company-owned Al Ghazal Golf Club. The tournament attracts many of the world s top players and priceless global publicity. The pro-am tournament is expected to become a firm fixture on the international golfing calendar. Stars of this year s field include Nick Faldo, Padraig Harrington, Ian Woosnam, Paul McGinley, Jean Van de Velde, Ian Poulter and eventual winner Greg Owen. APRIL 2004 Kuwait Kuwait International Airport announces it handled 365,855 passengers in March, a +58% year-on-year increase. The airport is recovering well considering the war on its doorstep last year and the prevailing uncertainty in the region. However, while there has been a surge in traffic, this has not flowed through to travel retail. This is because much of the traffic consists of low or non-spending military and civilian personnel in transit to and from Iraq. UAE Brendan O Shea, one of the international duty free trade s longest-serving executives, retires from Dubai Duty Free after 30 years in the industry to return to his native Ireland. He was one of the original Aer Rianta team that went to Dubai to set up the duty free operation in 1983, later spending periods with Abu Dhabi Duty Free and World Duty Free (Kenya). International Middle East airports fare well in the Skytrax 2004 rankings. They declare Dubai International Airport, Abu Dhabi Airport and Singapore Changi Airport, in that order, as the world s best in duty free shopping. Egypt The Chalhoub Group opens its joint-venture shops at Cairo International Airport terminal one in partnership with Egyptair and the airport authority. Managing Director Anthony Chalhoub says: The terminal is great, the facilities are wonderful with a lot of room and a nice mix of different cultures and opportunities with extremely high standards. Syria Tourism to the Middle East is taking off, led by countries such as Syria, which experienced +34% growth in the first quarter of 2004 according to a World Tourism Organization (WTO) report. At a news conference in Damascus, where the WTO is holding the annual meeting of its Middle East commission, Secretary General Francesco Frangialli congratulates Syria for being on the right track in tourism development. Tourism to the Middle East is growing faster than any other region of the world, with an increase of +17% in arrivals in 2002, and +10% in 2003 a year that saw negative tourism growth worldwide. This is a result of the emergence of trendy new destinations such as Syria, Lebanon, Dubai and Egyptian Red Sea resorts. It can also be attributed to new tourismgenerating markets for the Middle East, such as Russia and Malaysia. But above all, WTO said, intra-arab travel is driving the tourism boom, as nationals choose holiday destinations that are closer to home, friendlier and safer. MAY 2004 UAE Dubai Duty Free delivers a stunning +50% year-onyear increase in sales for the first four months of 2004, with April revenue rising +72% on the same month last year. What makes the figures even more impressive is that the January to April 2003 period was itself up +12% on Dubai Duty Free s January April 2004 figures represent an increase of +70% over the same period in Our penetration is doing very well and our April transaction numbers rose +41% over the previous year to 886,000, notes Managing Director Colm McLoughlin. McLoughlin highlights the performance of the digital photography category (which posts a +97% increase in sales for the first four months), a dedicated Swarovski area (+87%), sunglasses (+99%), watches (+70%), an extended cosmetics area (+80%) and the debut of cult skincare line Crème de la Mer, introduced late last year. It already represents 8% of our cosmetics sales, which is fantastic, enthuses McLoughlin. UAE Abu Dhabi Duty Free (ADDF), too, returns its bestever results in 20 years of trading during the first four months of And a surge in passenger numbers and commercial revenues prompts an urgent rethink of the airport s plans for a new terminal. ADDF retail sales have risen +32.7% 12 The Moodie Report

4 November 2004 MEDFA OFFICIAL GUIDE 2004 Chronology on 2002 (2003 was depressed because of the Iraq war) during the January April period. All major categories drive the overall growth. Fragrances & cosmetics are up by +38.1% over 2002; liquor & tobacco by +30.2%; food and chocolate +39.6%; gold +28.2% and electronics +35.7% Managing Director Mohamed Mounib says that the rapid evolution of El Etihad, the new UAE national carrier, has driven the passenger increase. Largely as a result of Etihad s ambitions, the forecast for 2004 is now 5.2 million passengers versus 4.3 million in El Etihad is causing enormous growth, said Mounib. We were planning a new terminal with capacity for six million passengers [current capacity is five million Ed] but now we are looking at the possibility of additional replica terminals, each with additional capacity for 10 million passengers. Iran Tehran s new international airport is shut by Iran s armed forces on the same day it opens, until further notice. Just one of six scheduled flights had landed at the Imam Khomeini International Airport on Saturday before Revolutionary Guards used military vehicles to block the runway, citing security concerns. A joint armed forces statement on Saturday says the security concerns stem from the presence of foreign groups at the airport, which lies 30 miles (45 km) south of Tehran, a reference to the Turkish-led consortium Tepe-Akfen-Vie (TAV) which built, and is to run, the airport. Gebr Heinemann-controlled Unifree has landed the duty free contract at the airport in a joint venture with TAV. Gebr Heinemann Director Claus Heinemann tells The Moodie Report: Our merchandise is still in Customs and the shops are ready. But we will have to see how the Turkish and Iranian authorities resolve the dispute. Daily newspaper Economic Hayat-e No quotes director of Aseman Airline Ali Abedzadeh as saying: We are not flying from an airport run by foreigners. But Parliament Speaker Mehdi Karroubi describes the situation as a disaster and a disgrace for the country. The fiasco is widely viewed as the latest power play in the long-running battle between fundamentalist and reformist elements in the country. Oman Duty free sales at Muscat Seeb Airport have risen by +70.6% year-onyear for the three months from February to April thanks to new shops and intensive promotional activities. Muscat Duty Free general manager Steve O Connor tells The Moodie Report: We began operations on 1 February 2003 but bear in mind for comparative purposes that last year at this time we were carrying out renovations and introducing new lines. As a result, all categories show very strong increases underlining what investment in retail facilities can do for an airport. Fragrances and cosmetics sales soared by %, benefiting from the move to self service and much-increased space. Tobacco rose +69.1% and liquor was up +59.6%. Jordan Jordan s national carrier Royal Jordanian Airlines posts a year-on-year increase of +130%, with a total of 124,000 passengers in April Last month the airline s average seat occupancy rate stood at 72.5%, up sharply from 54.4% in April Passenger traffic for the whole first quarter of 2004 rose +48.1% year-on-year to 514,000 passengers. Royal Jordanian currently has 16 aircraft flying to 50 destinations, including seven Airbus 310s, five Airbus 320s and four Airbus 340s. JUNE 2004 UAE Abu Dhabi Duty Free unveils details of its major summer promotion, the ADDF Summer Fiesta, which will run from 1 June to 31 August. The Summer Fiesta will have a Scratch and Win format, with on-the-spot rewards and valuable prizes. ADDF Managing Director Mohamed Mounib says: The Summer Fiesta will be very different from last year s Summer Adventure promotion, but will still be aimed at increasing penetration, increasing average passenger spend, and encouraging travel into and out of Abu Dhabi. Jordan Aldeasa Jordan Airports Duty Free Shops opens its new perfumery at Amman Queen Alia International Airport. To coincide with the opening the retailer launches a major Summer Fragrances campaign. Chief Operating Officer Pedro Castro tells The Moodie Report: The new perfumery is really fantastic. I expect a great performance during our coming high season in summer. The Summer Fragrances campaign will feature 25 summer fragrances, most of them one-offs. Kuwait Kuwait Airport Duty Free Shops (Kuwait Duty Free) is projecting sales of US$34 million this year, a +17.4% increase on last year s figure of just under US$29 million. The 2003 performance was particularly impressive as it represented an +11% increase achieved in the face of a war-torn year that hit Kuwait more than any other Middle East retail location. The company has grown its annual turnover from just US$9 million in 1994 to its current level, a growth of more than +200%. Last year spend per head increased by +126% and penetration by +109%. Those results were generated without the luxury of being able to sell liquor, as Kuwait is a conservative Muslim country. Yet despite these factors and a restricted 464sq m retail space, Kuwait Duty Free generated sales per square metre of US$58,884 last year, well above the regional average. UAE Dubai Duty Free says it is on target to generate 2004 sales of US$500 million after unveiling a +43% year-on-year increase in first half turnover to US$236 million. The Moodie Report 13

5 JULY 2004 Egypt Aer Rianta International Middle East (ARI-ME) announces a groundbreaking management consultancy contract in Egypt to run duty free shops in partnership with Egyptair Duty Free Shops. Egyptair Tourism & Duty Free Shops Chairman Captain Tawfik Assy states that in line with the government s policy of upgrading Egypt s airport facilities, he is delighted to be joining forces with one of the world s leading duty free operators, and in particular one with such a proven track record in the Middle East region. The contract will involve the upgrading of Egyptair Duty Free Shops operations including Cairo, Sharm El Sheikh, Hurghada and Luxor Airports. In addition it will involve the establishment of a new 2,000sq m post-arrivals duty free shop at the brand new City Stars retail and entertainment complex currently nearing completion in the affluent Heliopolis area of Cairo. ARI-ME Managing Director John Sutcliffe tells The Moodie Report We re honoured and delighted. UAE MMI reaches an agreement with Ports, Customs and Free Zone Corporation (PCFC) to acquire all the shares of the privatised Duty Free Dubai Ports (DFDP), according to local media reports. DFDP operates duty free stores in Jebel Ali Port, Port Rashid and the Dubai Cruise Terminal at Port Rashid. Jordan Jordan Duty Free Shops (JDFS), which operates a diplomatic shop in Amman and 16 other arrivals and departures border outlets at 10 locations throughout Jordan, opens a modern store on the Syrian border at Jaber. JDFS Commercial Manager Ashraf Mousa Hammuri tells Travel Retail Markets Middle East & Africa: We believe that this new shop has tremendous potential, as the Jaber border traffic has increased tremendously over the last two years. UAE Emirates places firm orders for four Boeing ER aircraft with nine options, making it one of the world s biggest operators of 777 aircraft. The 13 aircraft have a list price value of US$2.96 billion. The contract is signed by Emirates Chairman HH Sheikh Ahmed bin Saeed Al Maktoum and Boeing President and CEO Alan Mulally at the Farnborough Air Show in the UK. The four aircraft on firm order will be delivered during The remaining nine are covered by purchase rights that extend through Cyprus One of the wider Middle East s biggest airport development and retail prizes is up for grabs again following preferred bidder Alterra Consortium s decision to pull out of the development and operation of Cyprus two main international airports, Larnaca and Paphos. As a result, second bidder, The Hermes Airports Group, re-enters negotiations. The international consortium includes Ireland s Aer Rianta International, Bouygues Batiment, the Chambre de Commerce et d Industrie de Nice Côte d Azur, YVR AS (YVR Airport Services) from Vancouver, Canada, plus local interests. The build-operate-transfer (BOT) project is the first of its kind in Cyprus. Larnaca Airport is set to open in 2007 and Paphos in 2006 under a 25-year lease. Jordan Aldeasa Jordan records the best six months sales since it won the duty free tender to operate at Amman, Aqaba and Marka airports in A big contributor has been the new Perfumery opened in late May at Amman Queen Alia International Airport. Chief Operating Officer Pedro Castro tells The Moodie Report: It [January June 2004] has been the most successful semester in Aldeasa Jordan s history. We have closed this period with our sales +59.5% above last year (that means +50.1% higher than 2002). In June the retailer achieved a sales record. This was supposed to happen only in the August peak of our high season, enthuses Castro. Sales were spurred by a strong performance from the arrivals shops following refurbishment in September This has led to a doubling of sales year-on-year. AUGUST 2004 Kuwait Kuwait Airport Duty Free Shops (Kuwait Duty Free) records an outstanding +29% year-on-year increase in sales for the first six months of The retailer is projecting sales of US$34 million this year, which will represent a +26% increase on the 2003 figure of just over US$27 million. Particularly outstanding performances this year have come from the retailer s hot promotional points. These are located at the shop entrances and promote multi-pack offers, gwps and new launches. For example, in the food category sales have risen by almost +19% thanks to multi-purchase and special offers; 1,000 cigarette packs are up by +300% with some references. And fragrance sales are above last year by +42%. Gold sales have risen +35% during the same period, with cigarettes rising by +17%, electronics by +36% and watches by +30%. UAE Abu Dhabi Duty Free calls on fragrances and cosmetics suppliers to get their houses in order regarding flourishing grey market activity in the UAE domestic retail channel. Managing Director Mohamed Mounib says: Recently the number of consumer complaints has been increasing [saying] that brands can be bought significantly cheaper [than duty free] within multiple outlets in the domestic market. Investigation by the retailer shows that one chain of seven domestic stores is retailing every top house s brands at prices less than Abu Dhabi Duty Free s own cost of goods. In specific instances testers are also being sold, the retailer says. Abu Dhabi Duty Free Deputy Managing Director Dan Cappell says he is disappointed by the reaction from brand owners, dismissing such responses as lip service to the problem. We will not stop until we have resolved this issue, he continues. What saddens me is the hypocrisy that the perfume houses live by on the one hand they dictate that they could not possibly be displayed next to brand x because they are so much better and more prestigious etc, while on the other they ignore the souk trading environment and market stall discounting of their brands. 14 The Moodie Report

6 Impressive trading results from Muscat Duty Free Oman Sales & Services (Muscat Duty Free) posted an impressive +43.3% year-on-year rise in sales for the eight-month period ended 31 August. General Manager Steve O Connor said that the result had been driven by particularly strong performances from liquor, perfumes, communication, watches and electronics. Departures sales were up +41.7% over last year for the period, while arrivals sales climbed a startling +67.3%. Both departures and arrivals traded well with the rate of increase in sales surpassing the rate of increase in the number of passengers. noted O Connor. The number of departing passengers for the first eight months was +28.3% ahead of last year whereas sales increased at a higher rate of +41.7%, thus increasing the average spend per head. Similarly, arrivals traded well with a +67.3% increase in sales versus a % increase in the number of arriving passengers during the same period. The retailer s leading category was confectionery and foodstuffs, which accounted for 28.8% of sales. Sales rose +19.1% for the period. Then followed liquor (a 26.6% share), which increased +43.1%. The third category, tobacco, improved +44.0% year-on-year, and accounted for a 14.1% share ahead of the 13.9% held by perfumes and cosmetics. The latter grew 103.0% for the period over the same months last year. The Company is owned equally by Oman Aviation Services SAOG, an Omani joint stock company registered in the Sultanate of Oman and Aer Rianta International Middle East, a limited liability company registered in the Kingdom of Bahrain. The Moodie Report 15

7 SEPTEMBER 2004 UAE About +32% more people travelled through Sharjah International Airport year-on-year for the first seven months of Some 979,921 passengers used the airport during the period this year, compared to 742,651 over the same time last year, according to Sharjah International Airport. The expansion of Sharjah-based low cost airline Air Arabia, and additional flights by Indian Airlines, Egypt Air and Mahan Air have contributed to the rise in passenger traffic this year. Moreover, Air Arabia, which has turned out to be a boon for travellers in the region, has reported 223,358 passenger movements in the first half of It reiterates the point that Air Arabia is a trend-setter in the region, after they introduced high quality service in exchange for rock-bottom air fares, the airport comments. Pakistan EDF Group, headed by Rick Weil, has signed a contract to run the duty free retail concession at Karachi Airport. The contract covers the departures, arrivals and transit areas. Weil tells The Moodie Report: We re very excited and very positive about this we see it as a great opportunity. UAE Dubai Duty Free unveils a new charitable foundation to help needy causes, particularly those relating to children. The idea for the Dubai Duty Free Foundation grew out of the retailer s initiative in giving away its entire AED 7.1 million (US$1.9 million) day s takings to charity on the occasion Middle East leads growth in world air traffic The International Air Transport Association (IATA) has revealed that air traffic has risen across all regions for the first three quarters of 2004, compared with the same periods both last year and in IATA Director General and CEO Giovanni Bisignani said: People are travelling again. Every region is reporting double-digit growth. Traffic clearly is rebounding from 2003, which was an exceptionally bad year. Air traffic, measured by revenue per kilometre, has risen +17.7% compared to January to September last year. And compared to the same time in 2000 the growth was +8.1% The Middle East region leads the increase with a +29.1% rise over the same period last year. This is followed by Asia Pacific, with a growth of +25.3%. Worldwide, for the month of September alone, the growth over September 2003 was +10.9%, while compared to September 2000, the increase was +5.0%. Airline efforts to meet demand and reduce costs are paying off. We are well placed to achieve passenger growth of +14% in 2004, with a -3% reduction in non-fuel unit costs, said Bisignani. However, with oil prices at a record high, IATA warned that airlines are likely to make losses this year. Deputy Managing Director Dan Cappell warns: Unless suppliers start to acknowledge that this is not something that we are raising once and then letting go of, we will consider reducing our retail prices in the airport to the same level as the domestic market and promote this in the press both travel retail and local. Qatar A major shop re-fit of the main departures store at Doha International Airport will boost already impressive sales growth. A spokesperson for Qatar Duty Free says the re-fit will be completed by 24 November. This will enable the operation to introduce a number of key brand names such as Clinique, Rolex, and Omega, to name a few, while also maximising the internal space available for the display of new lines and improved customer flow, he notes. of its 20th anniversary on 20 December This will grow into something very meaningful, said Dubai Duty Free Managing Director Colm McLoughlin, who masterminded the project and for whom the desire to make a meaningful contribution on a grand scale has been a personal mission. For the nine months to 30 September, sales are up +55% yearon-year, well ahead of budget. Spend per head to the end of OCTOBER 2004 UAE Abu Dhabi Duty Free (ADDF) Managing Director Mohamed Mounib says that the retailer has received an official response from the Chamber of Commerce in respect of what ADDF claims is suspected grey market infiltration into the domestic market. ADDF says the Chamber of Commerce s response focuses on two retail chains in question selling products that are clearly marked not for sale (i.e. Testers) and a range of brands at retail prices that are significantly below both ADDF retail and the official agent s outlets within the domestic market (based on the suppliers published retail price lists). 16 The Moodie Report

8 Middle East prospers in latest ACI ranking Middle East airports showed up strongly in passenger traffic figures for September 2004 published by Airports Council International s (ACI) PAX Flash. International traffic rose +8.9% worldwide for the month with the Middle East showing a +13.2% increase. The region was one of three standout performances. Asia Pacific led the international growth with a +13.6% rise to nearly 18.1 million international passengers. Africa rose +13.5% to just under 2 million passengers while the Middle East continued its impressive growth, climbing by +13.2% year-on-year to 3.7 million. ACI traffic summary (among major world airports) ACI region September 12 months ending 2004/2003 Sept 2003/2004 Int l pax % change Int l pax % change Africa 1, , Asia Pacific 18, , Europe 52, , Latin America 2, , Middle East 3, , North America 7, , ACI total 86, , Source: ACI; The Moodie Report creating US$4.4 billion of revenue last year. During the first six months of 2004 inbound visitor numbers nearly doubled to around 4.5 million. Authorities re hopeful that the highlylocalised nature of the attacks targeted at Israeli holiday-makers would limit wider damage to the country s tourism industry. One company with a close interest in the situation is Aer Rianta International Middle East (ARI-ME), which in July signed a management consultancy contract to run duty free shops in Egypt in partnership with Egyptair Duty Free Shops. Obviously the situation is going to have an effect, ARI-ME Managing Director John Sutcliffe tells The Moodie Report. But you must appreciate the geography. Where it happened down in Sinai is not on the mainstream Egyptian holiday line, which is further down the coast of the Red Sea in places like Hurghada and Sharm el Sheikh. They re quite a long way away from what happened. August had risen from just US$13 in 2003 to US$17 and is set to climb to US$ Certain categories are growing dramatically. The Perfumery is up +72% year-on-year, while cosmetics and skincare have surged by +114%. Confectionery/ Food rose +53%. The tobacco category climbed +48%, liquor +46% and electronics +35% year-on-year. UAE. Dubai Duty Free launches a Full of Surprises shop floor campaign, building on the tagline the retailer uses in much of its consumer and business advertising.the campaign comprises three elements: a series of top value offers each month, a surprise gift with purchase on selected lines and even a Mr Surprise. Qatar Duty Free brings together the combined expertise of Qatar Airways and Aer Rianta International-Middle East and has consistently been one of the Middle East s fastest-growing retail operations in recent years. UAE/UK Emirates Airline and Arsenal Football Club sign the biggest club sponsorship in English football history, worth AED million (US$180 million). The agreement provides the Dubai-based international airline with naming rights to the club s new stadium, seating 60,000 spectators. For the next 15 years and with immediate effect it will be known as the Emirates Stadium. Emirates also will take over as the club s title sponsor including Fly Emirates shirt sponsorship for eight years, starting from the season, the first playing season in the new Emirates Stadium. His Highness General Sheikh Mohammed bin Rashid Al- Maktoum, UAE Defence Minister and Crown Prince of Dubai says: Sport transcends cultural and language barriers, and is an important means of fostering interaction between the different peoples of the world. Soccer, with its widespread popularity worldwide, is the perfect vehicle for this purpose. Egypt Seven years after the Luxor massacre killed 58 people and pushed the Egyptian economy into recession, authorities are hoping that last week s attacks in the resort areas of Sinai do not cause long term damage to the vital tourism industry. Tourism is Egypt s major foreign income stream, The latter roams the shop floor, 'surprising' customers by giving them a wrapped gift from Dubai Duty Free, such as a pen, pashmina or perfume. Oman The Government of Oman is to re-assume management of the country s airports with effect from 17 November. BAA and its partners in the Oman Airports Management Company (OAMC) were awarded preferred bidder status in the privatisation of Oman s principal airports on 10 September 18 The Moodie Report

9 November 2004 MEDFA OFFICIAL GUIDE 2004 Chronology 2001, following a competitive tender process. OAMC s responsibility for the management of Seeb and Salalah airports began in January However the parties were unable to reach financial closure on the terms of the privatisation and the development of a new terminal at Seeb airport. Oman Sales & Services (Muscat Duty Free) is the retailer at Muscat Seeb Airport. The company is owned equally by Oman Aviation Services, a joint stock company registered in Oman, and Aer Rianta International Middle East (ARI-ME), a limited liability company registered in Bahrain. ARI-ME Managing Director John Sutcliffe tells The Moodie Report: Our contract is with OAMC (Oman Airports Management Company ) and not with BAA who are a shareholder in OAMC. Our joint venture OSS (Oman Sales and Services Co.) trading as Muscat Duty Free has not received any official notification on the situation, and we believe that the latest developments will not substantially alter our status re our contract. Our business is performing above expectations and we still have more than eight years to run on our contract. Qatar Qatar Duty Free announces it is to sponsor the Doha leg of the World Powerboat Championships, marking its first major sports sponsorship. The initiative is designed to ensure that Qatar Duty Free receives global media coverage when the city hosts the prestigious race. Qatar Duty Free Assistant General Manager Krishna Kumari says: We are extremely pleased to be associated with powerboat racing, a sport that enjoys a huge following in the Middle East and around the world. This is a significant development for Qatar Duty Free in just a short few years since we were formed. This is our first sports sponsorship and the first of many planned over the next 12 months not just in the Gulf but around the world. The Moodie Report.com s Middle East pages are updated constantly: they are sponsored by Jashanmal and the Estée Lauder Companies. The Arabic language section of The Moodie Report.com is sponsored by Aer Rianta International Middle East. UAE Inflight duty free sales onboard Emirates are ahead +20.8% on a strong 2003 for the year to date, according to Duty Free Sales Manager John Sime. And they are about to surge even faster as the result of fleet additions, a sweeping review of the onboard mix, including the re-introduction of liquor on many routes innovative promotions and key additions to the range. A complete review of the product mix is a response to the airline s aggressive aircraft purchasing agenda and ever-expanding route network. Challenging business conditions exist with the arrival of a new aircraft every month for the rest of this decade, said Sime. In the next financial year alone we will have 14 new aircraft. Stop press: Middle East arrivals are buoyant The Middle East travel and tourism business has convincingly overcome the disruption caused by the Iraq conflict and SARS last year, according to just-published numbers from the World Tourism Organization. The organization says the region has recorded almost a quarter more international arrivals (+24) year-on-year up to August. Most destinations in the Middle East with monthly data available continue the good performance of 2003 and the beginning of 2004, based on the continued strong development of the intra-regional market. Lebanon, for example, received +42% more tourists from the Arab-generating market up to July 2004, while the total number grew by an estimated +30%. Other destinations such as Dubai (+9%), Bahrain (+19%) and Jordan (+18%) also benefited from such strong demand. Various destinations in the Mediterranean area continued the positive trend of the last quarter of 2003 drawing largely from European source markets, both mature and emerging ones, especially Russia. Egypt, where the largest market share belongs to Western and Southern Europe, saw visitors increase by +49% up to August, while receipts increased by +52% in the first half year. Likewise, international arrivals to the North African destinations of Tunisia and Morocco grew by 19% and 17% respectively and, unlike in 2003, in 2004 tourism receipts are also growing (+3% in Morocco and +15% in Tunisia up to June 2004). The Moodie Report 19