The Airport Authority of India (AAI) has delayed or cancelled several duty free tenders out of a total of 13 on offer at airports highlighted in its press notice back on 8 June 2015.

 

Sources in India tell TRBusiness that some of the traffic levels and operations at these airports are simply too small to interest big duty free operators and in some instances look potentially costly to operate.

 

Duty free tenders delayed to date include those at both Goa and Amritsar airports which were first ‘restarted’ from 24 March to 26th May and then again from 12 June to 2 July 2015 [no more news of this yet-Ed].

 

The duty free tender which closed on 23 June 2015 covering Lucknow and Coimbatore airports has been cancelled after no companies showed any interest in these ‘businesses’.

 

The remaining duty free tenders now scheduled to be opened before 22 July include Chennai, Kolkata and Calicut – in that order of importance – and are said to be comparatively attractive.

 

Sources in India tell TRBusiness that it is now much harder to make the small airport duty free model work profitably in India without being able to subsidise these facilities against the larger airports.

 

This was normal ‘in the old days’ under the India Tourism Development Corporation (ITDC) who once controlled all duty free airports business in the country.

 

 

‘NIGHTMARE LOGISTICS IN INDIA….’

But such a luxury is no longer possible now that the big airports like Delhi, Mumbai, Bangalore and Hyderabad are in private-partner ownership models.

 

An informed source in India added: “Another aspect of equal importance is the logistics. To supply from ports to the interior is a nightmare, especially when two small shops in different locations are a couple of thousand miles apart – just look at the costs involved.”

 

Some critics say that the Airport Authority of India missed its chance to invest in these airports, shops and the infrastructure to serve them when they were run by ITDC way back in the nineties. At that time, ITDC was operating at around 13 airport locations.

 

Some former ITDC employees claim today that the AAI now seems more preoccupied with the fine art of drafting these small tenders as bureaucratically fool proof and politically correct – rather than concentrating on presenting realistic and meaningful opportunities for bidding entities to run profitable and viable duty free operations.

 

TRBusiness reported back in May that AAI was looking for retailers to tender for duty free facilities at the following airport locations, which include: Coimbatore; Calicut; Mangalore; Trichy; Trivandrum; Kolkata; Ahmedabad; Goa; Pune; Jaipur; Lucknow; and Amritsar.

 

For full details of the terms of and conditions attached to all of these airport duty free tenders [at the time all were still valid-Ed], click here: http://www.trbusiness.com/regional-news/indian-sub-cont/aai-seeks-new-duty-free-retailers-at-many-airports/76646

 

[Top image: Pune Airport – photo credit: Randy Breese].