Malaysia Airports has introduced a new rental model as part of its efforts to retain and attract business partners and revitalise airport offerings under its commercial reset strategy. The new airport retail rental model and relief package will help revitalise airport commercial offerings after the coronavirus (Covid-19) has passed.

Under this new rental model, existing tenants which had signed or are going to sign up under the ongoing commercial rental programme, will benefit from a rental reduction of up to 30% from the current rate. This is equivalent to a total annual saving of RM45 million/10.8 million for participating tenants.

Malaysia Airports has been in the midst of a commercial reset at its international airports since 2018. The aim of the reset is to revitalise the retail experience.

According to the company, the new rental model will ensure the right brands are present at the airport regardless of the impact of Covid-19.

‘MORE ATTRACTIVE PACKAGE’

Dato’ Mohd Shukrie Mohd Salleh, CEO Malaysia Airports says the airport operator is fully cognisant of the difficulties facing its partners, due to a decline in passenger traffic movements. He commented: “We hope that with this new and more attractive package offered to our existing and potential partners, we can together realise the full potential of our commercial reset initiative.

“We are not going to allow the pandemic to disrupt our plans in elevating airport experience and service level and must be ready for the time when airports return to their normal pace.

“This new rental model will also help facilitate business recovery for our existing tenants and provide them with some breathing space while we undergo a gradual recovery in terms of traffic numbers.”

Meanwhile, Malaysia Airports has devised a more immediate relief package to help airport retailers mitigate against the impact of Covid-19 this year. The RM22 million/$5.3 million relief package was announced by Malaysia Airports Chairman Dato’ Seri Diraja Dr Zambry Abd Kadir.

He said: “Although Malaysia Airports itself is undergoing aggressive cost containment measures to mitigate against the impact on our own business, we feel that it is important to stretch the Ringgit further in order to extend a helping hand to our partners so that we can all recover together and take advantage of any potential for future growth.

“With this relief package, about 650 retail tenants will enjoy a 50% rental reduction for six months in 2020. These 650 tenants represent 80% of our retailers and are mainly made up of either SMEs or small to mid-scale operators, who will be able to gain some respite in terms of cash flow so that they can continue operating.”

Malaysia Airports remains committed to implementing various initiatives such as the KLIA Crazy Sale to help revive the industry. The purpose of these initiatives are to help retailers clear excess inventory due to decreased footfall at the airport.

The KLIA Crazy Sale, which was initially held during the long Merdeka weekend, has been extended until 5 September 2020 due to an overwhelming response from the public.

KLIA CRAZY SALE

Open from 11am to 6pm on Wednesday 2 September to Friday 4 September, it will also be open tomorrow (5 September) between 11am and 8pm. The sale is located on the Level 5 Departure Area in the main KLIA terminal. Those unable to attend the earlier event, can obtain discounts on travel exclusive, duty-free products.

Dato’ Mohd Shukrie Mohd Salleh said: “Last week, we had close to 10,000 guests and we expect more guests this time around. Apart from helping our retailers, we hope to turn KLIA into a destination of its own through such an event.

“In fact, we have lined up various other activities to support local tourism. An example is the recent Airport Staycation Programme that we hosted over the Merdeka weekend which was also an instant sell-out.”

Guests at the KLIA Crazy Sale can purchase heavily discounted products from operators such as Eraman, Valiram, Gebr. Heinemann and Lagardère Travel Retail. Discounts of up to 70% are available on items ranging from perfumes and cosmetics, chocolate and confectionary to fashion and lifestyle. Visitors are  entitled to free parking, gifts and shopping vouchers with a minimum spend.

Safety measures have been implemented at the event to provide peace of mind for shoppers. Public areas are sanitised once every three hours and guests must go through thermal scanning and adhere to physical distancing measures. Face-masks are mandatory.