Travel retail operator, Aelia UK – owned by LS Travel Retail – will be bidding with gusto for the new tender to operate tax and duty free stores at London Luton Airport, Fin Casey, Managing Director of LSTR UK & Ireland, told TRBusiness.

 

 

As reported, the fifth busiest airport in the UK is seeking expressions of interest (EOI) for a concession to operate tax and duty free stores at its passenger terminal. The incumbent is the aforementioned Aelia UK, part of Paris-based LS Travel Retail (Aelia-operated store at London Luton Airport pictured right, courtesy of LTN Airport).

 

“We’ve known it’s been coming for some time,” Casey told TRBusiness. “We’ve been working very closely with Luton Airport management and we were fully briefed along the way in terms of their internal approach and plans; how and when it was going to be. We were forewarned, every step of the way, and the idea of a tender has been around for some time now; delayed a little bit because of the sale of the airport last year.”

 

As reported last year, Luton Airport was divested by Spanish infrastructure group Abertis as it sought to offload its airport interests. In a deal worth €502m ($762m), LTN is now under the control of Spanish airports operator Aena, and the infrastructure fund of Ardian, a private investment company.

 

Casey maintains that the airport has handled the process responsibly, ensuring transparency of its intentions “all the way through and we understand the reasons and the drivers of this,” adds Casey.

 

Aelia’s arrivals store at London Luton Airport.

 

A DECADE OF EXPERIENCE

It was in 2005 when the current passenger terminal was opened at LTN, but Aelia has actually been trading there since 2004. It opened its first arrivals store at the airport in 2012 (pictured left).

 

When asked if a decade’s worth of Luton Airport-specific experience puts them in a strong position, Casey said: “I think any incumbent would automatically feel that they are in a strong position. We know the numbers, we know the demographic, the potential.”

 

Casey says he is not surprised that the LTN tender is a big talking point. “I’m not surprised the press has picked up on this tender. Duty Free tenders are few and far between in the UK market and have been, in my memory, since I entered travel retail, so it’s a significant event in that regard. Contracts of this value don’t get tendered in the UK very often any more. Back in the day I guess…

 

“Add that to the fact that we’re talking about a London Airport with big development plans and big changes afoot under the new shareholders…this is just the beginning.”

 

WDFG IN THE MIX?

As mentioned, LTN is now under the control of Spanish airports operator Aena, and the infrastructure fund of Ardian, a private investment company. At Aena’s gateways in Spain the DF&TR operator is World Duty Free Group.

 

When asked if he thought WDFG had an advantage, because of its major existing relationship with AENA – WDFG won a record tender at 26 Spanish airports in December 2013 – Casey was diplomatic. “Clearly WDFG have a very big trading relationship with AENA in Spain and that’s been well-documented over the years, especially through the recent tender process…It’s more a question for them to answer.”

 

LSTR UK is also wondering how its business at Glasgow Airport might be affected next year, after Heathrow Airport Holdings released a statement voicing its intentions to sell Glasgow, Aberdeen and Southampton Airports by the end of this year.

 

“The rumour, particularly surrounding Glasgow, has been circulating for a while now,” says Casey (pictured right).

 

CHANGE AT GLASGOW

“We have a business at Glasgow, it’s not a big business but it’s a very nice business and we’ve just recently extended it in terms of taking increased space. The management team at Glasgow are fantastic; we have a really great, open and positive partnership with the management team at Glasgow and I’d expect that to continue through any sale.”

 

Glasgow has enjoyed steady passenger growth over consecutive years, since LSTR began trading there in 2011 [it celebrated three years trading at the Scottish Airport just last week-Ed].

 

“Coming out of the 2008 difficulty and with Flyglobespan, an important airline there, falling by the wayside in 2008, they took a few knocks, but they’ve been building steadily domestically and internationally and it looks set to continue. It’s been a very good environment to trade in.”

 

Unsurprisingly Casey is expecting significant uplift in passenger traffic and sales as the Commonwealth Games in Glasgow comes to a close.

 

“LSTR’s UK business is very very important, clearly it’s a leading market, not just in terms of passenger movements, although that’s still significant globally especially for a relatively small land mass. It’s a market we want to continue to grow in and we’re busy working to do that.”

 

Coming back to Luton, Casey makes it clear that LSTR is not about to give up without a fight. “Luton is fifth busiest airport in a very important market, the UK, so we’ll be taking this very seriously as you’d expect… it’s equally important from a global LSTR perspective.”