Melbourne International Airport has revealed to TRBusiness that it has revised its projected commercial income for the 2019/2020 financial year (ending 30 June 2020), as a result of the Covid-19 crisis.

TRBusiness has learned that financial performance at Melbourne Airport, which has a long-term sustainability plan with its partners, was ahead of projections until February 2020, when international passengers dropped 17%. This equated to 150,000 fewer travellers flying internationally in February than during the same month of 2019.

Domestic traffic slumped 5.2% in February, a loss of more than 100,000 passengers compared to February 2019. At this point, the airport, where Dufry Group is the incumbent duty free operator, was forced to reassess things due to a lack of customers and assistance packages being offered to retail/commercial partners.

Andrew Gardiner, Chief of Retail, Melbourne Airport and Chief Executive Launceston Airport said: “We have supported all retail partners with assistance packages. Our board unanimously supported the relief programme, which is based on an agreed percentage of sales only.

“Our strong relationships with retailers before the crisis will stand us in good stead when we emerge.”

LIMITED INTERNATIONAL FLIGHTS

Offering a snapshot of the current situation at Melbourne Airport amid the Covid-19 pandemic, Gardiner said: “The Australian Government issued a directive last week indicating all non-essential retail had to close due to social distancing requirements. This included duty free, luxury and all fashion stores.

“We are allowed to trade food and beverage and pharmaceutical products, but only on a ‘take away’ basis.”

[Click the below video featuring Melbourne Airport CEO, Lyell Strambi, who assesses the impact of the Covid-19 crisis]

Currently, the airport is operating a number of daily domestic flights with cafés and pharmacies serving domestic travellers. “We have a limited number of international flights, with a reduced number of cafés operating for fewer hours. All business class lounges are closed.”

At present, most passengers are unable to transit or enter Australia, while most Australian nationals cannot leave the country.

Regarding the possibility of Chinese passengers, a key international visitor market, being permitted to travel to Australia again, Gardiner commented: “It is too early to say when travel to Australia will be allowed. It will depend on government being comfortable with the risks.”

He added: “This whole situation is a great opportunity for biometrics to be implemented at departing [Chinese] airports to gauge the health of each traveller before boarding. Perhaps this will restore confidence.”

LAPTOP DONATIONS

Once travel restrictions are lifted, Gardiner will be hoping Chinese travellers return in their droves. This is because they have traditionally been high spenders at the airport, particularly when it comes to luxury and watches.

Due to the relatively close proximity of Melbourne and China, the Chinese comprise a large proportion of sales at Melbourne Airport. It is hardly surprising, therefore, that the airport continues to have a team dedicated to the Chinese market like it has done for a number of years.

In the meantime, Melbourne Airport is continuing to follow government guidelines in regard to social distancing and closures of stores and food courts where required. It has also donated hundreds of laptops to local schools to assist underprivileged kids with online learning.

Looking ahead, all commercial projects will be driven by forecasted passenger increases as planned. Capital spend on all terminals will be  commensurate with projected returns.

Offering some final insights into how the airport is coping with the crisis and the way is positioning itself for the recovery, Gardiner concluded: “The right leadership is in place. Our CEO Lyell Strambi is a highly proficient leader who has experience in dealing with crisis leadership. He has reshaped our teams to address safety, sustainability and recovery.

“It’s definitely not ‘business as usual’, but with the right vision, opportunity will emerge out of the current adversity.”