AENA Commercial Director, Jose Manuel Fernandez Bosch

AENA Commercial Director, Jose Manuel Fernandez Bosch talks to TRBusiness’ correspondent John Gallagher about ‘the biggest duty free tender in history’.


Spanish airport authority Aeropuertos Espanoles y Navegacion Aerea (AENA) has launched a major duty free tender, covering no less than 80 shops at 26 airports. AENA Commercial Director, Jose Manuel Fernandez Bosch tells TRBusiness’ correspondent John Gallagher that his priority now is to raise total travel retail revenues from the current annual level of €535m ($696m) to more than €700m ($914m) by 2014.


Those companies that have registered their interest in the forthcoming tenders for AENA’s 26 airports comprise World Duty Free Group; Areas-Nuance; Sigma (an alliance between Lagardere subsidiaries Aelia and SGEL); Dufry Ibersuiza; Dufry Islas Canarias; Gebr Heinemann; and Duty Free Americas.


All seven are currently studying the Lots of airports that AENA has packaged and AENA Commercial Director, Jose Manuel Fernandez Bosch says he couldn’t be happier at the response that the Spanish airports company has received to the tender request for proposals process.


Aldeasa MadridTHREE LOTS

Sensibly, AENA has packaged the airports into three different Lots, ensuring that the smaller airports will receive the attention of the retail operators. They are as follows:


Lot 1 – Madrid, Malaga, Almeria, Asturias, Bilbao, Granada – Jaen, Jerez, Santiago de Compostela, La Coruna and Sevilla.

Lot 2 – Barcelona, Palma de Mallorca, Alicante, Girona, Ibiza, Murcia-San Javier, Reus and Valencia.

Lot 3 – Fuerteventura, Las Palmas de Gran Canaria, La Palma, Lanzarote, Tenerife Norte and Tenerife Sur.


[Above left: Aldeasa store in Madrid airport]


Product categories included in the tenders will include wines and spirits, tobacco, perfumes and cosmetics, food and confectionery and accessories.


However, luxury goods and fashion are not included and will be tendered separately later this year says Bosch, who believes his aforementioned target to increase total travel retail revenues to AENA from the current level of €535m ($696m) to more than €700m ($914m) by 2014 is realistic, as he explained.


Aldeasa BarcelonaREACHABLE GOAL

“This may look a bit ambitious given the current economic climate in Europe, but we feel the goal is reachable – there will be substantially more retail space and the winner of the tender will take advantage of this with new renovated shops.


[Right: Aldeasa store at Barcelona airport]


“Several of the larger retail areas will be totally revamped and we feel that the airport shopper will leave more cash in the shops. The renovations to certain terminals will be important and we feel that revenues can rise by at least 20% in the short term; we would expect that offers will take this into account.”


AENA seems to be pleased with the response to the tender call to date, according to Bosch: “We are very happy to be honest – all the companies that we wanted to be present are competing in the tender. We have all the leading European companies, and one American company.


“Clearly, we would have liked one or two Asian operators, but it is normal that they haven’t wanted to come to the tender; Spain is far away and the European situation is quite difficult for them to understand.


Aldeasa MalagaTIMING

“I am sure they thought that they would be disadvantaged compared to European companies who have a greater knowledge of the market and there are quite a few tenders closer to their home base that will take their attention as well.”


[Left: Malaga airport]


So is this an ideal time for the tender we asked? “It’s neither a bad time nor a good one,” said Bosch. “It would be great if the economy was growing at 7%, but that is not the case. There are some arguments that say that when the High Street is not growing or growing at very low rates, travel retail may grow at a higher rate.


“I have spoken to some mainstream retailers recently and some companies may actually pick the airport as the retail venue compared to the High Street when times are tough. We feel that the opportunity is so big for travel retailers that they cannot afford not to compete in the tender.”


So what is the percentage of travel retail sales (duty paid) and the percentage of traditional duty free sales to non-EU Passengers, we asked?



“It really depends on the airport – Madrid and then Barcelona will have the highest percentages given the amount of flights leaving these two airports for non-EU countries,” said Bosch. “Looking at the whole network, it is probably around 50 – 50, but let me check the data and I will confirm it to you.”


[Right: Aldeasa store at Bilbao airport]


Spanish airports have been in the news this year as some airlines have tried to implement a one-piece of hand luggage carry-on policy, offering no space aboard for goods purchased in the airport.


Despite this, Bosch says that the law in Spain is very clear on this subject: “We will do everything we can to ensure that passengers’ rights are upheld.


We have sent instructions to all airlines and all handling agents to advise that the law must be adhered to.



“At this moment, there are also initiatives at the European Parliament on this issue, and it is likely that we will see European legislation aimed at protecting the right of passengers to travel with carry-on items that do not pose a risk to the safety or security of the flight. It is simply unacceptable that in today’s Europe, passengers are confronted with humiliating situations at the boarding gate, when they do not have any capacity to react if they want to board their flights.


In our case, the problem is limited in quantitative terms if we bear in mind the number of passengers we manage and the number of incidents reported, but it is more than numbers that matter. You can be sure that we will struggle to ensure that both passengers’ rights and airports’ rights to carry out a fair commercial activity prevail.”


In previous tenders, there was also some confusion about who had the right to sell tobacco in Spanish airports and there have been some changes in the law in Spain, but AENA remains convinced that there will be no problems, no matter who wins the tender.


Bosch said: “We have been talking to the Tobacco Commission that controls tobacco sales in Spain and we have been assured that any operators who win the tender will be able to sell tobacco duty free to travellers flying to non-EU destinations and duty paid to other travellers to EU destinations.



“There is a little doubt about the new airports which have never had any travel retail shops – whoever wins the tender for these airports will have to ask for permission to sell in these new stores.”


Meanwhile, some observers were surprised at the absence of fashion and luxury goods in the original mix for this mega tender, but according to AENA the dates for these tenders still have to be fixed, as Bosch explained: “The luxury goods tender will depend on the work we plan to do in several of the terminals.


“The luxury part of T1, T2 and T3 in Madrid could be called later this year, but the most important part, T4 and T4 Satellite, will be tendered in the early part of 2013.


“The actual luxury shopping area will not be ready until the end of the year or the beginning of 2014. It’s also possible that Barcelona and Malaga will be ready before the main stores in Madrid T4, at the same time as Madrid T1, T2 and T3.”



Several executives from European operators may actually miss their annual visit to Cannes for the TFWA exhibition this year, considering the dates coincide directly with the presentation of bids as Bosch explained: “We are expecting technical offers to be submitted by the 22nd October. We will look at them closely over the following four weeks and if we have any doubts we will meet with the candidates during the last week in November.


“During the last two weeks in December we will invite those candidates whose technical offers are acceptable to submit their economic offers. The financial part of the tender is slightly complex as the candidates have to submit a complete bid by airport and by category.


“We have the software to analyze the bids very quickly, so we would expect to announce the winners by the end of December. So we expect that the winners of each lot will take possession of the stores in May.”

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