Lagardère Travel Retail has declared the re-opening of Wuhan Tianhe International Airport for domestic flights today (8 April) as a significant milestone and ‘big sign of hope and optimism’ for the company, which has multiple airport operations across China.

The reopening of the airport, where Lagardère runs the Terminal 3 master retail and foodservice concession covering around 90 outlets, coincides with the emergence of the city from a 76-day lockdown on Monday (6 April). The lockdown was imposed in January due to the spread of the coronavirus (Covid-19).

China itself published no deaths from the virus on Tuesday (7 April) for the first time since it started publishing daily figures in January.

Speaking exclusively to TRBusiness on the eve of the re-opening of Wuhan Airport, Eudes Fabre, CEO, North Asia, Lagardère Travel Retail said: “The symbol of Wuhan Airport reopening goes above and beyond any prediction or forecast of how revenues will be.

“The reopening is proof that everything which closed and disappeared will reopen and come back. You hear people saying they will not travel anymore and airlines suggesting they do not require any more planes. People are also saying they will no longer eat out as they have learnt to cook in quarantine, but the point to remember is that life will return to normal.”

DAY-BY-DAY APPROACH

On the revenue front, Fabre, who oversees the retailer’s Chinese airport and railway commercial operations, admits he has no idea how things will transpire at Wuhan Airport. “We will take it day by day and see how things go,” he remarked.

He added: “It will probably take time for business to ramp back up, but I am personally confident and optimistic. Wuhan had been living under lockdown for a long time and I think people are really anxious to start living their lives again.”

Wuhan, where the virus originates went into lockdown on 23 January 2020 under order from the Central Government of China. This followed the first death from the virus on 10 January 2020 and spread of  the novel coronavirus to major Chinese cities and provinces by 22 January.

The first person who died was a regular customer at the Huanan Seafood Wholesale market, where many people were infected with pneumonia with no clear causes. This was later linked to a new strain of coronavirus.

According to the China News Service and multiple local and international reports, officials completely disinfected the airport prior to the reopening. Located 26km north of Wuhan City, the airport also operates direct international flights to New York, London, San Francisco, Paris, Rome and Moscow. It is unclear when flights to these destinations will re-start.

On entering the terminal, passengers must scan a ‘Wuhan Fighting Epidemic’ QR code and show their ‘green code’. The latter is a QR card issued in Hubei Province, of which Wuhan is the capital, indicating the traveller is healthy. Elderly people and minors who did not apply for the health code must carry health certificates issued by their communities or villages.

Passengers must also have their temperatures taken and those which exceed 37.3 degrees centigrade will most likely be treated according to the relevant pandemic prevention rules. Self-service and on-line check-in remain closed.

Currently living in Shanghai, Fabre is well placed to provide his own thoughts on the situation in China on a human and business level. “We definitely see a big improvement in the overall situation. Traffic, to be clear, is not close to where it was pre-crisis, but the trend is positive.

“There is definitely a big effort on behalf of the central and local government to get the economy back in gear and return to normal life. Precautions remain in place to avoid a resurgence of the pandemic and of course consumer confidence is not back to how it was. The return to normality is a gradual process.”

Asked by TRBusiness for a more concrete prediction as to when consumer confidence will return in China, Fabre remarked: “It is difficult to make accurate projections, specifically on China. Obviously, the economy is going to be challenged during the rest of the year on business and consumer confidence, but economic stimulus measures will be implemented to help the economy get back on its feet. These things, however, do take time.”

He added: “China is a trade-dependent economy and with the rest of the global economy being so badly affected, this will have a knock-on effect on a lot of industries, jobs and ultimately consumers’ ability to spend in China. Despite everything though I remain optimistic.”

DOMESTIC DUTY PAID FOCUS

For Lagardère Travel retail, which entered the Chinese market as a distributor more than 16 years ago and claims to be the largest international travel retailer in China, the focus is ‘completely’ on the domestic duty paid business.

The rediscovery of domestic travel in China has already started. According to recent data from the Air4casts marketing consultancy, airports such as Haikou Meilan and Phoenix Sanya are taking advantage of China’s grip on containing the spread of the coronavirus (Covid-19).

In the week ended 11 March 2020, for example, Haikou Meilan Airport handled 138,000 arriving and departing Chinese passengers. The number rose to 151,000 for the following week ended 18 March and to 166,000 at the end of the week after that.

“Customers who do not want to travel overseas due to the perception other countries have not handled the crisis as effectively as China, for example, will probably turn their attention back to domestic travel. This will definitely be a positive trend for our business in China,” emphasised Fabre.

Fabre, like many others has definitely noticed ‘a pick-up’ in Chinese domestic traffic. “Flights which were cancelled have been re-instated and the load factor is slowly increasing. Business travel, however, remains quite subdued.

“I think we will have to wait another one or two months before business travel reaches the level it was previously.”

Looking at the bigger the picture, the speed of recovery in general varies from airport to airport. “Some airports are accelerating faster than others. It is a mixed picture. The overall trend is that of recovery and there is some confidence that the worst [of the crisis] is behind us and that things are looking up.”

Speaking of airports, Fabre says they have been extremely supportive and have acted decisively during this turbulent period. “In China specifically, our airports have been very supportive and quick to act. For that, I am extremely grateful. They really did the right thing and quickly.

“Now, things will become more difficult as traffic has not fully recovered. Many airports are experiencing difficult financial situations of their own. There will definitely be further discussions in the months ahead on issues such as concession fees.”

While Chinese airports have implemented strict measures to ensure the good health of all travellers, Lagardère has introduced its own initiatives at its Chinese airport to protect team members and customers.

Fabre, who reveals all staff working at Wuhan Airport today wore KN95 face-masks commented: “We are providing personal protective equipment, checking temperatures and have a very strict disinfection regime for all our stores and restaurants.

“We are really being super stringent and providing all sorts of cleaning supplies, including hand sanitisers.”

From a global standpoint, the company is supporting employees and partners with the creation of a ‘Covid solidarity fund’. As reported, shareholders will not receive a dividend and the Group will contribute €5 million/$5.4 million to the fund. Deductions will be made from amounts initially allocated to the dividend payments.

The efforts of staff and senior management have also been acknowledged in an open letter penned by Arnaud Lagardère, General and Managing Partner, Lagardère SCA.

LETTER OF APPRECIATION

An extract from the letter, shared on social media platform LinkedIn by Dag Inge Rasmussen, Chairman and CEO, Lagardère Travel Retail read: “To each and every one of you, across the organisation. I would like to say thank you and express my appreciation for your efforts.

“Comprehensive safety measures have been put in place for those among you who are not working from home.

“Our worldwide HR teams are rallying in support of all our employees, whatever their current situation. We are working on measures that will allow the Group to absorb an economic shock that we do not expect to be short-lived.”

Offering a personal perspective on the past couple of months, Fabre says this has been turbulent period for himself and his team. “The priority has really been to take care of everyone as much possible.

“The first thing we did was ensure everyone’s health, safety and job security. I am happy to report that nobody is leaving and that we have no illnesses across our big team in China.

“Despite the exposure, scale and number of airports we are present, we have managed to keep everybody safe and healthy. For this, I have a huge amount of gratitude and pride, as health and safety comes before anything.”

Another positive has been the company’s ability to continue serving customers when Chinese stores have been closed through its Boulevard du Luxe customer loyalty programme.

“We are lucky to have our established customer loyalty programme with over 1.5 million members in China. This has enabled us to serve members throughout the crisis, make home deliveries and interact with our loyal customers.

“This is one of the reasons our business has come out in pretty good shape. This platform is a key strength and big differentiator. Even when our customers couldn’t physically make it to the airport, they were able to appreciate our personal service.”