Revenue at ATÜ Duty Free leapt by 11% in the first three months of this year (YOY).

Leading Turkish travel retailer ATÜ Duty Free continues to monitor new business opportunities, as it seeks to grow its influence in a number of important markets.

Speaking to TRBusiness recently, the TAV Airports Holding and Unifree Duty Free/Gebr. Heinemann joint venture says it is committed to pursuing investment potential in several key regions.

“Eastern Europe, North Africa, Caucasus and North America is where our operations are strategically important,” commented a spokesperson.

“We follow all opportunities in our target markets and are continuing preparations for several projects we are pursuing beyond Europe, The Middle East and the Atlantic. We want to add to our portfolio.”

ATATÜRK AIRPORT CLOSURE

The expected closure of Istanbul Atatürk Airport to pave the way for the transfer of operations to the mammoth Istanbul New Airport (set to handle 90m passengers in its first phase when it opens on 29 October), remains an important focus for ATÜ Duty Free.

As a result, operator TAV Airports will cease business at Atatürk before the end of its concession agreement, which is officially set at January 3 2021 according to the operator’s annual report.

Turkey’s General Directorate of State Airports Authority (DHMI) is understood to be covering profit losses incurred by TAV Istanbul as the result of the concession termination.

IGA Havalimani İsletmesi (IGA), a joint venture consortium comprising Turkish companies, won a 25-year tender to construct and manage Istanbul New Airport in 2013.

Concessionaire Gebr. Heinemann/Unifree Duty Free is set to open a 15,000sq m duty free area as part of a cavernous 53,000sq m retail footprint, with the sales target in year one set at approximately €800m ($987m), it was revealed earlier this year.

According to TAV Airports’ full-year results statement, duty free spend per passenger at Atatürk dipped to €14.1/$16.5 in 2017, having posted a relatively flat performance at €15.4/$18 (+0.8%) in 2016.

At that time, a combination of factors including a weak Turkish lira, dampened arrivals sales and departure store renovations combined to stifle growth.

“The passenger mix had a significant impact on SPP performance,” added the ATÜ Duty Free spokesperson. “The share of Turkish passengers decreased at arrivals, which caused an adverse effect. Moreover, the Euro-Turkish lira exchange rate deepened the decrease.”

Notwithstanding this, ATÜ Duty Free moved to increase its full-year revenue by 1.7% to €342.1m/$401.5m [based on the 50% stake held by TAV Airports alone].

In the most recent results for the first three months of this year, the fall in spend per head at Atatürk deepened, slipping by 13% to €13.6/$15.9 due to the continued weakness of the Turkish lira and European pax.

However, ATÜ Duty Free’s revenue for the period in question lifted by 11% year-on-year to €76m/$82m, propelled by a +27% rise in international pax.

Istanbul Atatürk Airport is set to close, with  flights directed to Istanbul New Airport ready for its  first phase opening in October this year. 

At the same time, TAV Airports increased its overall passengers numbers by 23% in Q1 this year to 28 million, as Group revenue jumped by 10% to €248.4m ($288m). The operator is set to disclose its half-year results on 26 July.

As the leading travel retailer in Turkey, ATÜ Duty Free runs more than 120 shops at 21 airports in eight countries, including in Tunisia, Latvia, Oman, Georgia, Saudi Arabia and the US.

For a full report on Istanbul Ataturk’s 2017 results, watch out for the Top 10 Airports report in the August edition of TRBusiness, available soon.