Jeddah Airports unleashes duty free tender at KAIA

By Luke Barras-hill |

Jeddah’s KAIA handled 31m pax in 2022 and is eyeing a surge in travellers to total around 50m this year.

Jeddah Airports Company (JEDCO KSA) is inviting bids from travel retail operators for a chance to capture more than 10,000sq m of coveted duty free concession space at Saudi Arabia’s King Abdulaziz International Airport (KAIA).

A request for proposals, launched today (18 April), spans core beauty, confectionery, food, tobacco, souvenirs, fashion, accessories and jewellery across Terminal 1 and the North Terminal, with operator JEDCO anticipating strong global and regional interest in the tender.

Up for grabs is nearly 6,000sq m of retail with an additional 4,000sq m walkway area that can be re-designed in part to leverage the total footprint at Terminal 1, which opened in 2019 and is the second largest single airport terminal in the world (see image gallery at footer).

Meanwhile, the North Terminal’s retail offer is approximately 1,500sq m and available in a walkthrough format.

The closing date for submissions is 17 August, with final discussions and a contract offer set for the end of September.

Paul Neeson, VP Commercial, KAIA.

Further RFP due…

KAIA confirms it will launch a further RFP in due course for added opportunities across speciality retail and F&B ‘as part of a long-term development plan’ for the airport.

Lagardère Travel Retail is the current incumbent, having won the duty free contract in 2016, and given the KSA’s exponential growth prospects for aviation (see below), the RFP is sure to tempt bids from a flurry of major operators.

Paul Neeson, Vice President of Commercial, KAIA said: “We are thrilled to bring the duty free RFP for KAIA to market. It has been eagerly awaited by the duty free industry for some time now.

“The new Terminal 1 is simply stunning and […] we now have the opportunity to match the splendour of the terminal building with a new vision for duty free and travel retail that places Jeddah amongst the best retail facilities in the region and globally.

“With total space for development exceeding 10,000sq m, it will allow retailers to truly express themselves. We call upon all participants to share their vision for how world-class retail should look when space constraints are removed.”

Neeson says such freedom will allow retailers to highlight product ranges and experiment with spacing to coax passengers into the spaces earlier – and stay longer.

The successful bidder will be tasked with delivering a ‘genuine sense of place’ within a landscape that offers the opportunity to break existing retail boundaries, he continues, while working closely with KAIA to forge a long-term partnership to seize future opportunities.

On the North Terminal opportunity, he added: “North Terminal is another proposition with a different passenger profile and journey to Terminal 1. The terminal is an older building but perfectly shaped for retail and F&B from a passenger journey perspective.

A deadline of 31 May has been set for bidder clarifications ahead of a submission deadline of 17 August, with negotiations and a contract offer expected towards the end of September. The tender covers core categories such as beauty, confectionery, tobacco, souvenirs, fashion, accessories & jewellery, and food.

“The terminal now requires a full refresh and a retailer who understands the benefit of creating a bespoke offer for the North Terminal passenger.”

Vision 2030 ‘a rallying call’

The airport handled a record 37 million passengers in 2019. After hitting 31m last year, volumes are expected to surge to circa 50 million in 2023.

Growth at KAIA and other airports in the country feeds into the Kingdom of Saudi Arabia’s (KSA) ambitious ‘Vision 2030’, which as reported concentrates on a rapid expansion of its air transport connectivity to position it as the region’s number one aviation sector by serving 330m passengers annually by that date.

Among Vision 2030’s other goals is to encourage 120m tourist visits in 2030; diversify the Kingdom’s economic activity by lifting the proportion of non-oil exports to 50% of GDP; and positioning it as a global commerce hub by aligning foreign direct investment to a global standard of 5.7% of GDP.

View of the North Terminal, which accommodates carriers such as Egyptair, Air India, Ethiopian, AirArabia, Turkmenistan Airlines, Tunisair, Al Masria and SpiceJet.

Neeson added: “Our vision is unbounded but grounded by Vision 2030, a rallying call for the entire Kingdom that seeks to move KSA away from a dependence upon oil revenues and invites the world to visit by a significant relaxation on previous requirements for entry. Aviation and tourism sit proudly at the centre of Vison 2030.”

Jeddah, the gateway to the two Holy Mosques of Mecca and Medina and a major trading port on the Red Sea with a population of around 4.7 million people, is planning to accommodate 114 million passengers by 2030 as part of the airport’s masterplan.

The airport boasts four terminals – the new Terminal 1, North Terminal, South Terminal and Hajj Terminal – and three runways over an area of 88 square kilometres.

According to JEDCO, the North Terminal and new T1 handled a combined 14.7m passengers last year and this is predicted to rise to 18.9m this year.

“Rarely a week goes by without a query from the major international players,” added Neeson. “We are delighted to present a proposition that truly encourages vendors to partner and to speculate with KAIA in an exciting period for KSA. We are delighted to now present exactly what the future holds for KAIA.”

JEDCO KSA was established in 2022 as part of a privatisation drive within Saudi Arabia’s aviation sector, with the company responsible for managing and operating KAIA.

Stay close to TRBusiness for more on this story as it develops…

All requests for the RFP should be directed to: [email protected]

Further information from KAIA/JEDCO should be made to the following: John Holland: GM Commercial Strategy and Planning, Jedco; [email protected]; tel: +966 503755638

Images courtesy of KAIA/JEDCO.

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