Avinor issues €3.6bn DF and travel value tender at Norwegian airports

By Andrew Pentol |

Norwegian airport operator Avinor believes passenger traffic will recover across its airports in 2024. Source: Avinor

Norwegian airport operator Avinor has today (11 January) launched a tender for the duty free and travel value shops in Oslo, Bergen, Stavanger, Trondheim, Kristiansand, Ålesund, Tromsø, Bodø, Harstad/Narvik, Molde and Kristiansund Airports.

Running from 2023 to 2027, the estimated value of the contract is €3.6 billion The duty free element covers all 11 airports listed above and 17 duty free shops spread over 16,000sq m.

Total duty free turnover (liquor, tobacco, confectionery and perfumes and cosmetics) amounted to €530m in 2019.

In addition, seven Travel Value shops at seven airports are up for grabs, spread over 1,500sq m. Categories include perfume and cosmetics, accessories and confectionery/fine food. Total Travel Value turnover in 2019 was €30m.

Travel Retail Norway (the joint-venture between Gebr. Heinemann and local partner Norse Trade) operates duty free and travel value stores at the five largest Norwegian airports. Avinor runs the stores at the six smaller airports. Travel Retail Norway’s current contracts expire in 2022.

SUBMISSION DEADLINE IN APRIL

Following today’s announcement, an information meeting and inspections will take place next month. The deadline for submissions is 23 April 2021.

Travel Retail Norway (the joint-venture between Gebr. Heinemann and local partner Norse Trade) operates duty free and travel value stores at the five largest Norwegian airports. Source: Avinor

Presentation meetings and negotiations are planned for May/June 2021 with the best candidate(s) to be determined in June/July 2021. The winner(s) will be announced after the contracts are signed in late August.

Joachim Lupnaav Johnsen, Executive Vice President Commercial, Avinor told TRBusiness: “The structure of the contract for the tender competition is set up in three packages. Each package comprises one or more airports.

“Avinor has changed the structure of the traditional concession contract model. The new model is more balanced and takes into account specific regulatory changes and unforeseen drops in passenger numbers. It also has flexibility for adjusting the footprint of the premises and exit clauses.”

Avinor believes international traffic will strongly increase in 2022.

In terms of criteria, Avinor is seeking ‘solid operators’ and well-developed concepts for the premises included in the tender. Lupnaav Johnsen said: “Avinor seeks well-functioning international and national concepts/brands to develop a commercial profile that supports Avinor’s passenger strategy of creating good travel experiences and other ambitions developed for its airports.”

Tenderers must satisfy the qualification criteria set for the tender and requirements relating to financial capacity and experience from running similar commercial operations.

Lupnaav Johnsen explained: “Quality will be evaluated based on certain criteria outlined in the company description.

FINANCIAL ELEMENT

“The financial part will be evaluated based on a pre-determined turnover level determined by Avinor, the offered concession fee in percent per category and the minimum rent per relevant passengers. Further details are outlined in the tender documents.”

In a statement released on the Avinor website last month, Lupnaav Johnsen outlined the main reasons for the tender. He said: “We have been very pleased with our existing operator, Travel Retail Norway. We now want to explore the international market to secure the best terms and the best shops going forward. ”

Income from duty free shops provides a significant part of Avinor’s financial performance and has traditionally represented 28% of the company’s annual revenue, according to Lupnaav Johnsen.

“By partnering with the world’s best and most effective operators, we can ensure a financial foundation that will enable us to deliver on our social mandate and continue operating our airport network in years to come.”

Avinor opened a 4,000sq m arrivals store at Oslo Gardermoen International Airport back in 2016.

Duty free shopping holds a unique position in Norway, due to high purchasing power and an affluent population. Sales from international arrivals are particularly strong and represent more than 50% of duty free sales at Oslo Airport Gardermoen International Airport.

The airport operator said the coronavirus pandemic had obviously had a negative impact on duty free revenue due to the marked decrease in passenger numbers. Avinor acknowledged that future traffic will depend on travel restrictions, infection rates and progress in vaccination.

“Avinor has been hit hard by Covid-19 with traffic expected to recover in 2024. The economic impact is quite like the drop in passenger numbers,” Lupnaav Johnsen told TRBusiness.

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