Auckland Airport has selected global duty free operator Lagardère AWPL as its duty free partner as it transitions to a single duty free operator next year.
From September 2023 onwards, Aelia Duty Free (owned by Lagardère Travel Retail SAS) will be the main duty free retailer operating at Auckland Airport, after successfully winning an extension of its contract until mid-2025.
It’s expected that both Aelia Duty Free and The Loop Duty Free (operated by Aer Rianta International) will continue trading at Auckland Airport until their licences expire and the transition to a single operator takes place.
Aelia Duty Free has said it will continue to deliver a ‘world-class experience’ across Arrivals and Departures throughout the transition, with additional investments in brands, experiences and sustainability to be major features of the expanded, single-operator platform.
“Aelia Duty Free is known for delivering world-class experiences across the globe, and Lagardère Travel Retail is proud to continue to do so in Auckland with this contract extension through Lagardère AWPL in the Pacific,” said Dag Rasmussen, Lagardère Travel Retail Chairman & CEO.
Luc Mansion, Lagardère Travel Retail Group CFO and COO-Pacific added: “Auckland Airport have been an important partner for Lagardère Travel Retail and now Lagardère AWPL in the Pacific region.
“We are thankful for their belief in our vision and to now partner with them to deliver the first single-operator duty free experience through Aelia Duty Free.”
Duplicated duty free offerings ‘a rarity’
Auckland Airport’s Property and Commercial General Manager Mark Thomson highlighted that duplicated duty free offerings “are a rarity in international airports”, with only two of 112 other international airports similar in size to Auckland Airport operating dual models.
“The competitive retail landscape has shifted dramatically in recent years and the pandemic has only accelerated this,” he said.
“With the evolution of online shopping and smart phones, shoppers are far more savvy and sophisticated, and the scope of competition between retailers has fundamentally changed.
“In this ever-changing environment, we need to look for ways to make duty-free shopping even more relevant and exciting for travellers, providing them with a greater range of product choices and a retail experience they can’t easily find elsewhere on the high-street at competitive prices.”
Przemek Lesniak and Costa Kouros, Lagardère AWPL Co-CEOs, said: “The Lagardere AWPL family has worked hard to develop and present our vision for Aelia Duty Free at Auckland Airport, and we are now looking forward to delivering more magical moments and innovative experiences together with the airport through the single-operator model.”
The proposal period
The news comes after competitive proposals were submitted for extensions at the hub.
“Lagardère AWPL and Aer Rianta International each put forward fantastic proposals for short-term extensions, and it was a tough decision as both are world-class operators,” said Thomson.
“However, we are confident that transitioning to a single duty-free operator with Aelia Duty Free will invigorate the duty-free experience at Auckland Airport and enable further investment by top international brands, a world-class range of products on offer at competitive market prices, and increased innovative experiences for shoppers.”
Auckland Airport opted to extend only one duty-free licence until June 2025, when a full tender process will complete for a longer-term contract.
“We have enjoyed a successful seven-year partnership with Aer Rianta and would like to acknowledge the fantastic service the team at The Loop Duty Free continue to provide customers,” said Thomson.
“They are valued members of the wider Auckland Airport team, who stepped up to serve passengers during the Covid-19 pandemic and as the border gradually reopened earlier this year.
“Auckland Airport will work with the Aer Rianta International team to plan an orderly transition of operations to the successful operator later in 2023.”
Auckland Airport’s transition to a single duty free operator
Auckland Airport has communicated its intention and rationale for moving towards a single duty free operator to the Commerce Commission, and states that it made ‘no objections’ to the proposed change.
The hub originally sought to move to a single duty free operator 13 years ago, however it did not progress following Commerce Commission concerns about the nature of market competition at that time.
“Since this review took place, the competitive landscape for retail trading has shifted significantly,” said Thomson.
“We are confident a single operator model will deliver a greater customer experience that is no less competitive when compared against the current dual operator model.”
Lagardère has stores in both the departures and arrivals area of Auckland Airport’s international terminal.
More than 150 people currently work across duty free stores at Auckland Airport, and with the transition to a single operator expected to take place in nine months, the airport said that the overall number of employees in duty free is expected to grow as passenger volumes continue to recover.
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