[UPDATE] Travel retailers take stock of HKIA chaos after flights resume

By Luke Barras-hill |

Terminal1-HKIA-overviewTravel retail is digesting the situation at Hong Kong International Airport (HKIA) after flights re-started yesterday after two days of disruption.

Volatile scenes of riot police clashing with pro-democracy demonstrators last night were broadcast globally, as anti-government protests against the government’s (suspended) extradition bill entered their tenth week.

The Airport Authority of Hong Kong (AAHK) cancelled flights for a second day in a row on Tuesday, affecting hundreds of passengers, with peaceful protests later descending into skirmishes with police.

Bubbling tensions between both sides combined with flight terminations from the likes of Cathay Pacific and Hong Kong Airlines, among others, had raised concerns of a hit on retail operations – CDF-Lagardère, The Shilla Duty Free and Gebr. Heinemann all run concessions at HKIA.

RETAIL ‘IMPACT’

Sources close to the matter have told TRBusiness that the commercial situation with regards to duty free and travel retail shops is stable, but unsurprisingly there is expected to be some knock-on impact while full operations are resumed.

“It will take a while for the flights to be back on 100%,” commented Scott Hamilton, Business Director (Spirits, Wines & Beer) – Asia, Lagardère Travel Retail.

Chaos-Terminal-HKIA

Anti-government protests have paralysed operations at HKIA in recent days. Source: AAHK.

“Airside (after customs) it is business as usual; from a commercial perspective due to traffic flow, delays and uncertainty of schedules business is down from our expectations which is only natural.”

A source at The Shilla Duty Free, which runs the Beauty&You concept stores, said: “Since yesterday we are slowly gliding into normality. At Shilla, throughout this period, we all joined forces to do what was needed in respect of Airport Authority guidance.

“Indeed our stores in some instances had to phase out operation as many flights were cancelled and as tension rose. Yet our staff showed exemplary resilience to follow instructions  either reporting duty or vacating stores. This was a great support.

“As a principal, Shilla put the safety of the team at the top of its agenda. We did all it took to ensure our people would be unharmed and remain positive to serve our customers in spite of circumstances. On the operational side, the Airport Authority team guided us all along, which was most comforting.”

“Rescheduling flights and reprogramming passengers travel is hard work, so we are hopeful that the situation continues to normalise for both HKIA and Hong Kong at large. We trust that Hong Kong will be able to rise above the challenge and regain its dynamism to benefit all parties.”

TRBusiness also reached out to Gebr. Heinemann, which runs its Sweet Dreams by Heinemann confectionery stores.

Johannes Sammann, Chief Operating Officer Heinemann Asia Pacific, told TRBusiness: “Naturally, anything that influences passenger movements has a commercial impact. However our current focus lies on assuring all of our employees are able to follow our daily routines and provide a consistent level of service towards all passengers and Hong Kong International Airport.”

Airports Council International Asia-Pacific (ACI Asia-Pacific) has condemned the disruption on HKIA’s operations, which has affected travel movements.

The voice of Asia Pacific’s airports says the protests have resulted in a sizeable impact to the airport’s business and security risks, over consecutive days.

In a statement, it said: “We stand in solidarity with our colleagues at Hong Kong International Airport and Airport Authority Hong Kong.

“The aviation industry is a close-knit community and together, we stand firm and united in bringing people together, ensuring the safety and security of the travelling public by offering a network of safe and secure airports.”

INTERIM INJUNCTION

At the time of writing, flights on Wednesday were running, but some delays and cancellations are expected following the public gatherings, which have blocked key through-routes to immigration and the airport restricted area.

“Hong Kong International Airport will implement flight rescheduling today (14 August) with flight movement expected to be affected,” read a notice on the airport’s website.

Duty-Zero

CDF-Lagardère Company Limited (CDFL) has run its Duty Zero by cdf-branded stores since November 2017.

“Passengers are reminded to pay attention to the latest flight information through the airport’s website and ‘HKG My Flight’ mobile app. Please confirm flights before heading to the airport. Passengers can also check with their airlines for the latest flight information.”

AAHK is implementing access control at terminal buildings to control terminal and flight operations and to ensure the safety of its employees and passengers.

Only passengers due to board flights in the next 24 hours or airport staff with relevant identification will be able to enter the terminal buildings until further notice.

Non-travellers have been advised not to travel to the airport unless absolutely necessary.

Moreover, the airport is executing additional access control measures. AAHK says it has obtained an interim injunction to restrain persons from ‘unlawfully and willfully obstructing or interfering with the proper use of HKIA’.

Interim-Injunction-HKIA

Hong Kong Airport has implemented access control arrangements at its terminals and has issued an interim injunction to prevent further disruption. Source: AAHK.

In issuing the injunction, AAHK hopes to prohibit protests and demonstrations in any areas aside those that are designated. However, it will be well aware of the chaos in recent days and should those warnings be ignored it may well spell further misery for the airport and its business partners in the days to come.

“Any person who neglects to abide by or neglects to follow the interim injunction order, or any person assists another in disobeying the interim injunction order may be held in contempt of court, and is liable to imprisonment or a fine,” stated AAHK. “Enforcement proceedings may be taken to compel person to comply with the interim injunction order.”

VISITORS NUMBERS SET TO TUMBLE

Separately, research from ForwardKeys suggests travellers’ confidence has been shaken due to the ongoing turbulence in the special administrative territory, a trend that looks set to continue.

Between 16 June – 09 August, a period characterised by a two million strong-demonstration, general strikes and riots, flight bookings to Hong Kong from *Asian markets declined by 20.2% compared to the same period year-on-year.

In the first 14 days, bookings dropped by 9% and by 2.2% in the following fortnight (30 June – 13 July).

The situation deteriorated from the 14 July to 09 August, with a 33.4% decline in bookings. ForwardKeys says this reverses the positive travel trend in the first six-and-a-half months of the year, when bookings where up by 6.6%.

David Tarsh, Spokesman for ForwardKeys, said: “The situation in Hong Kong has deteriorated substantially in the past eight weeks and particularly so in the past four. During June and early July, ForwardKeys saw no decline in long-haul bookings to Hong Kong; however, that is no longer the case.

“From 16th June to 9th August, long-haul bookings to Hong Kong are now 4.7% down on the equivalent period last year. Furthermore, ForwardKeys’ latest numbers do not yet include the events of Monday, when all flights were cancelled and video of police clearing protestors from the airport were beamed around the world; so ForwardKeys is not optimistic about reporting a recovery in the immediate future.”

ForwardKeys analyses more than 17 million flight bookings per day.

*Excluding China and Taiwan as a drop in bookings from those destinations in the latter stage of June may also be explained by the earlier timing of this year’s Dragon Boat Festival.

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