ATÜ Duty Free (the joint-venture between TAV Airports Holding and Unifree Duty Free/Gebr. Heinemann) has confirmed to TRBusiness it is ‘considering bidding’ in the upcoming duty tender at Kutaisi International Airport in Georgia.
The Turkish travel retailer has been the incumbent duty free operator at the airport since 2014, when it opened a 148sq m DF&TR store. It also runs duty free stores elsewhere in Georgia at Tbilisi and Batumi Airports. These locations are managed by TAV Airports.
Currently, Tbilisi Airport is handling a limiting number of international flights amid the Coronavirus (Covid-19) pandemic. Batumi and Kutaisi Airports remain closed.
As first reported by TRBusiness, United Airports of Georgia LLC is due to issue a duty free tender this month for two airside locations in the departures hall at Kutaisi International Airport.
Total available duty free space spans 568sq m, of which 420sq m (a walkthrough duty free zone) is located directly after passport control. A further 148sq m is situated close to the boarding gates.
Each space is expected to have a different name and offer diverse concepts. The smaller location should also be devoted to Georgian products.
Both spaces are located in the existing terminal which is currently being renovated. The renovation is part of a terminal extension project which is scheduled for completion in April 2021.
Tamara Archuadze, CEO, United Airport of Georgia LLC told this publication that all interested parties, including ATÜ, are welcome to take part in the tender. This will take the form of an online public auction. She also indicated they will have the opportunity to participate on equal terms and that the process will be fully transparent.
Ahmet Kötehne, Chief Strategy Officer, ATÜ Duty Free told TRBusiness: “We have had a successful business in Kutaisi with United Airports of Georgia for many years and would like to carry on this cooperation.
“As you know, we have been in Georgia since 2007 with our operations in Tbilisi and Batumi Airports.
Last year, Kutaisi airport served up to 900,000 passengers, with more than 70 direct weekly flights to and from Europe’s top destinations. Kutaisi Airport has the highest number (c. 30) of direct European routes in the region.
It also registered the second-highest increase in passenger flow of any European airport, which welcomes less than five million passengers annually. This is according to Airports Council International.
Assessing the evolution of the retailer’s Kutaisi Airport operations, Kötehne recalled how ATÜ Duty Free was fortunate to have its operations in Tbilisi and Batumi when Kutaisi Airport became operational in 2012.
A RISK WORTH TAKING
“We benefited from our existing infrastructure and logistics network and took advantage of economies of scale. We would not have been able to take the risk and invest if we did not have the learning experience in Tbilisi and Batumi.”
He added: “Kutaisi Airport has been mainly operating as a low-cost carrier airport and depends heavily on one or two airlines. Over the years, United Airports of Georgia has a done a great job increasing the passenger numbers, although the conflict between Russia and Georgia has been a significant blow for the market.”
The political outlook involving Georgia and Russia remains important, according to Kötehne. “There have been positive developments, especially in March 2017, when Georgian citizens’ were allowed to travel to EU countries without requiring a Schengen visa.
“The low-cost [Kutaisi] airport became a point of interest even for travellers in neighbouring countries.”
Reflecting on ATÜ Duty Free’s long-standing partnership with United Airports of Georgia, Kötehne said: “We have had the privilege of working in harmony with United Airports for many years.
“Despite Kutaisi Airport’s small scale, which is a handicap for many international companies, ATÜ had the opportunity to invest early and take the risk. Fortunately, the business grew gradually and our cooperation led to a transparent and well-founded professional relationship.
“This serves perfectly for improving the business, not only in financial terms, but also developing a know-how.”
Over the years, ATÜ has provided duty free services in Kutaisi at international standards. It has shared expertise from its various other operations — the retailer is present in nine countries and 21 airports — provided training for local staff in different countries and introduced an impressive product portfolio to create a better customer experience. The aim was to create value for Kutaisi Airport.
Kötehne said: “United Airports in return, appreciated those efforts and contributed by efficient feedback mechanisms.
“They improved the passenger flow and commercial layout of the airport with their good-management and tried to support the airport ecosystem for further growth.”
A TOURISM ATTRACTION POINT
The development of civil aviation related industries, including duty free operations, mainly rests on government policies. As the Republic of Georgia strives to become a member of the European Union, it is gradually becoming a tourism attraction point.
“This positively affects the developing economy,” emphasised Kötehne. “Kutaisi is still a relatively small airport, but Tbilisi and Batumi are now well-established with sizeable passenger numbers and a substantial variety of destinations.
“The professional and visionary approach of the Georgian government and United Airports of Georgia continues to positively impact the retailer’s operations in Tbilisi, Batumi and Kutaisi.”
He concluded: “The only major setback is the current Covid-19 Pandemic which the whole world is experiencing. Unfortunately, the main ambiguity relates to how long the recovery will take.
“When passenger numbers return to previous levels, this positive environment [in Georgia] accompanied by an experienced management team and efficient and successful performance will be no surprise.”
Interested parties in the duty free concession opportunity at Kutaisi International Airport are invited to email [email protected] for further information.
*Images courtesy of United Airports of Georgia LLC and ATÜ Duty Free.