The $14.5bn New Doha International Airport (NDIA) is expected to open in mid 2013 and epitomizes the original Trinity spirit, according to Keith Hunter, Senior Vice President, Qatar Duty Free, with the airport, airline and retailer all working closely together to ‘wow’ the customer. Doug Newhouse asked the questions.

Doha International Airport handled 18.1m passengers in calendar year 2011 (9.1m arrivals and departures the balance). How has traffic performed in 2012 and what are the current forecasts?

The traffic so far this year is obviously up on last year by approximately 20% and that has continued and that is a fairly stable year-on-year growth for Qatar Airways, which keeps coming up with those levels of increase. Obviously as we get to the higher millions, the percentage drops, but it is still going at quite a rate.

For this year we are expecting up to 21m passengers and that is roughly when we will open the doors for the New Doha International Airport, or NDIA.

There is a fairly aggressive expansion plan in place for the airline that’s been rigidly stuck to year after year and the aircraft continue to arrive on a monthly basis and this is going up to a peak arrival of one every 18 days. Some of those are being added to the existing fleet and some are replacing the older fleet.

[Above: Qatar Duty Entrance Doha: Doha International Airport is expecting 21m passengers this year]

I was fascinated to see Qatar Airways’ new membership of the oneworld alliance recently and was wondering how that might change the passenger profile at Doha Airport and/or what benefits you hope will gravitate down to the airport?

Well it is difficult to comment upon it because it has literally only just been announced last week. Obviously we think it is a good move for the airline and by default when the airline benefits so do we.

Our profile is fairly diverse anyway and is constantly evolving and we are just expecting that to evolve at a faster rate.

But we have been trying to forecast ahead at least five years in our business plan, looking where all the routes are planned and as I say, it is very attractive for us because it is covering a lot of the key profile locations, so we expect good things.

In general terms, would you expect it to deliver routes which in turn would maybe deliver more transfer and other traffic through Doha overall?

I would hope so, yes.

[Above: Qatar Duty Free shop floor Doha: Congestion should be a thing of the past when the NDIA opens in mid-2013]

You outlined a broad progress report on the $14.5bn New Doha International Airport at this year’s Trinity Forum. Is the airport still on target to open at the end of this year and how are your negotiations going for those 51 or so retail spaces or areas you talked about ranging between 20 and 1500sq m?

In terms of the airport opening, 12.12.12 is not now going to happen. There is a re-phasing of certain aspects of the project, so we are looking at this stage at a middle of next year opening.

A lot of that is to do with the publicized issues with the lounges for Qatar Airways and they have changed the contractor there, so it has resulted in to a different date.

We are still working on our original schedule for the shop build. From the negotiations point of view it is fantastic and we are pretty much complete and certainly for first phase we are full and every location is allocated.

How long did that take?

We started negotiations on it in the first quarter of 2011 and after that you’ve obviously got all the contracts to draft up and agree with lease agreements etc., and anything legal is always quite lengthy – but we are pretty much done now.

We are very excited. We have been struggling in this airport from a space perspective and the ability to display or offer the brands that we wanted to and certainly the brands befitting the profile of our airline and our strategy.

Now when the NDIA opens we will be able to offer a comprehensive world-class retail service. Everything is there and we have been able to tick pretty much every box we were aiming for from high end all the way down to low end – it covers the whole spectrum of our profile which is great.

We have also created a lot of exciting brands that we have developed and we are branding, as well as the famous brands you’d expect us to have.

Above: Qatar Duty Free fashion: Fashion is one of the product areas where QDF will be able to express its retail offer far more fully at the new airport than it can from the available space today]

[Above: Qatar Duty Free management has a number of fashion surprises up its sleeve for when the new airport opens next year]

Can you give one sneak preview of a brand you have created?

I can only tell you that they cover all categories, but I can’t give any names at this stage. We have got a toy concept and a connoisseur concept and fashion and a lot of multi-branded emporiums that we have developed and pulled together.

We have had to grow the team dramatically to facilitate this expected growth and our division is quite large now. There is a lot more certainly in the management levels and food and beverage, as well as the project team itself – and then the operations team.

We’ve also got some new brand managers and operations managers to facilitate that move. So it has been a big job and a lot of recruitment and there is a lot more still to happen.

Next year we will be bringing in hundreds more staff ready for the opening.

I know that the current consultancy contract with Aer Rianta International runs until the new airport opens – subject to what you may decide. Do you know how you are going to move forward after the airport opens?

This is not something I am able to comment upon now, apart from the fact that as you know we have had a long relationship with ARI and continue to value their consultancy services – but as an operator we stand-alone and that is our strategy.

How would you describe spending levels at Qatar Duty Free at Doha at present and to what degree have you benefited from high-spending passengers at the location?

The growth in premium spending has been exponential over the last couple years. Obviously, like everybody we had the tough recession where spending levels went down on premium products, but overall people were still shopping.

Now we have seen a huge shift towards the premium aspects of categories, whether it be liquor, or specifically perfume where we have seen a dramatic growth in premium fragrances.

It has been a bit frustrating, because in order to cater for that we need to bring in more of the premium elements of those brands but we didn’t have the space. That being said, we have been working with the airport to get in more of the premium elements and we’ve moved some of the aspects of the operation upstairs in the airport and recently we’ve created more space to display some of the premium products.

We’ve concentrated on the Chinese profile and we created the Chinese Village which ran for a couple of months at the beginning of the year. We then did a follow up Chinese Village that has been in place for the last three months trading upstairs, that focuses on all of the key products that the Chinese normally shop for.

From a transaction point of view our spend is very high and without naming names, we are double some of our colleagues in the region on transaction spend.

You talked at the Trinity about operations in the Middle East sometimes being penalised by some brands in terms of less than equitable margin rates. Is this situation getting better now or is there still an underlying inequality in the way some look at the Middle East?

That issue still exists, but I think that the wiser brands have opened up to the reality that the growth and the opportunity here warrants a fairer platform and that is what we have insisted on for NDIA – and that is what we are going to deliver in NDIA.

If this has fallen over with any brands then they are not included in NDIA and it is as simple as that. We have been very pointed about it and thank you for noticing it, because it is something I have banged on about for some time.

We have an opportunity here that the brands are attracted to and that is great and it is a win for all. I would also like to say that it is becoming fairer as we get to this point in our stratospheric growth and we are now able to command more realistic margins.

If you look at the state of the market right now and just how much investment has gone on across this region, the growth is staggering and we are not the only ones benefiting here.

I’d like to think that on a curve our growth is very sharp compared to others, but there’s a lot of growth in the region and it has woken up a lot of people. Whereas some brands previously wouldn’t be seen or even talk to duty free operations, now they are and it is part of their strategy.

[Above: QDF’s Keith Hunter says it makes sense to tie the airline duty free programme into preorder and the ground operaitons as one more customer touchpoint in the chain]

It is actually not that long ago that some brands would not even talk to European duty free retailers…

Well we can highlight that. When we are in a position to release the list you’ll see that there are a lot of exclusives or even ‘first in the worlds’ for duty free, which is fantastic news and very flattering for us and we are very pleased with it.

We didn’t enter into this thing thinking well that’s it; we’ve got it all sewn up. We had an airport to pitch and an opportunity to pitch and it was interesting and exciting enough that the brands took note and have really risen to our challenge and our invitation.

To have them here on the line up is phenomenal.

Considering where we are now and looking at the airport right now compared to what we are going to deliver next year – it is incredible with the changes and you will have never seen anything like it.

I can’t tell you how exciting this is or what an exciting project it is to be involved with and also for the people joining us.

Obviously when you are looking for specialised staff with significant skill sets that’s one thing, but looking for quality staff on the ground must be tough, because Qatar is not exactly a big place, so you must be competing with many other businesses?

Absolutely and it is difficult, but to be brutally honest it is difficult wherever you are and it doesn’t matter whether you are in Europe, the Far East or in the Middle East. It is always difficult to get good staff, regardless of where they are from.

[Above: Exterior of NDIA]

I’ve said this before, but we are not here to say we are going to be bigger and take more money than any other duty free.

This is who we are and this is what we are and our point of difference and I am sure a lot of people beat the same drum. It has to be our service and we’re focusing on that a lot.

I will be honest, we’ve had no training department before, but we now have a full training department which we have built up for NDIA to focus on the customer service aspect and the delivery of service.

That is not just in retail, but all the way through to mirror the airline, because in fairness the airline service is five star and phenomenal and we have to compliment that. So a lot of work has gone into that and again, our staff base is very diverse.

We have over 80 nationalities in our business and we go on drives all around the world, whether it be the Seychelles, Europe, the Philippines or China and we work our way around trying to pick the best and we are fussy.

So yes, it is expensive, it is difficult and you are competing against other businesses and we are all pulling from the same pot. But I’d like to think that the opportunity of what we are doing here is a little bit of a draw for some of those people as well – especially the high-end and senior management talent.

Your CEO made it pretty clear to me the last time I came to Qatar that you are not going to be dealing with local agents when the NDIA opens – is that still the case?

Well in fairness, we have been dealing with agents since we started and we have got some very long-standing relationships with some of the local partners. Our intention when we were evolving this business and building it was not to just forget everything that has happened, but certainly to grow it properly and compete to deliver what we needed to.

[Right: Artist’s impression of the Whisky area at NDIA]

We have specifically targeted brand principals and we have stuck to that. We are not taking out everybody who has worked with us before, although we have revisited all of our agreements of course – as we do annually.

But going forward, for new brands we are bringing in we are talking only to principals and that is our strategy. We still have some agent involvement in existing brands and partnerships, but predominantly our product offers come directly from the brand principals.

[Above: Artist’s impression of Perfume & Cosmetics area]

I guess it would have been easier to go to a specialist retailer, take a big minimum annual guarantee and let them get on with it but you haven’t. Is this part of a vertically descending management policy to control all quality aspects of the business throughout the entire process from top to bottom with the same culture?

Absolutely and I think that is the only way to do it. There has been a clear strategy and clear vision from the CEO all the way through that we are the masters of our own destiny.

We want control and it is not about power, but as you said, control of quality and content and not what somebody else is serving up to you where you have no choice – that doesn’t work.

We are creating our own destiny here with the airline itself. This is not all about organic growth.

This is what Qatar Airways is bringing to this airport and to this premise and we have to control it to meet the exact needs of it and this is imperative – absolutely imperative. We wouldn’t want it to work any other way.

This epitomizes the optimum airport retail model to me. As you probably know, we are the living embodiment of the Trinity.

[Above: Artist’s impression of the boutique are at NDIA]

Once the new operation is up and running as well as you could hope, do you see ways of incorporating the inflight offer in with the airport offer – I mean is it really credible to compete with yourself, or would it be better to work with yourself?

It’s better to work with ourselves and I think you’re right; it is easy to be distracted and just think on the airport. To be honest we’re trying to do it in tandem and we are looking a lot at existing preorder.

That’s the beauty of the whole operation and even having our own hotels as well, because it allows us all of these different touch points with the customer. So why fight amongst yourself when you can create that seamless journey offering all aspects of your service all the way throughout?

We need to make it easy for customers, no matter what. I don’t want people buying abroad; I want them here, or on our airlines, or at our hotels.

This is what we’ve been working on and Devesh [Devesh Kuwadekar, Senior Manager Business Development & Marketing-Ed] has been heavily involved with that along with our IT department and there is a whole division focused on it.

This is a whole smart airport approach and we are using a lot of technology and some of it will be ready initially and some is still in development. But it is all intended to make it easy access for our customers.

How surprised do you think passengers and customers are going to be when those NDIA doors finally open?

I think you will have to film it because nobody will have seen anything like this before – that is something you can almost guarantee. We are all lucky, as the brands have been when we’ve shown them around the airport, the various locations and what is available. To see the looks on their faces is amazing. That is why I go on as many tours as I can, because I love that look and the conversations afterwards.

I am an airline passenger myself who goes all around the world on all sorts of different airlines and I have experienced all of these different offers around the world.

But when I look at what we’ve creating here and compare it, the wow factor certainly kicks in.

Nobody will have seen a retail set up like this, or an airport facility set up with the lounges, the hotels and the swimming pool.

All aspects of it just scream that this is unique and if you are going to choose to fly through this region, our intention is that you choose Doha as your transit point of choice.

[Actual sales figures for Qatar Duty Free are confidential, but The Business estimates that the operation is already the second largest in the Middle East after Dubai, with an annual sales turnover in the region of $250m-Ed].