As is the case in most regions, the impact of the coronavirus (Covid-19) on passenger numbers is unprecedented in the Middle East and Africa.
In Africa, for example, the slowdown in airport passenger traffic started in mid-March. Traffic was at a virtual standstill between May and June.
Following recent analysis undertaken by ACI Africa it was determined that the anticipated drop in African passenger traffic for 2020 (compared to the forecast without Covid-19) is expected to be -62%.
The Middle East and Africa has faced a similar situation to the rest of the world. Most airports were closed and traffic slumped more than -90%. All non-essential retail in airports which remained open was shut by governments.
In terms of the DF&TR re-start in the region, governments have failed to understand the difference between domestic and duty free retail. This has resulted in the implementation of domestic retail restrictions in re-opened duty free stores.
Over the past few months, the Middle East and Africa Duty Free Association (MEADFA) has left no stone unturned in trying to ensure the safe re-opening of airport retail outlets in accordance with domestic operating restrictions.
MEADFA has also engaged with political authorities and landlords to secure relief for industry stakeholders, as Andrew Pentol discovers in an exclusive interview with Haitham Al Majali, President, MEADFA.
How has MEADFA engaged with governments in the region during the pandemic and what are the results?
MEADFA has indirectly engaged governments via retailers and airports. The Advocacy Working Group has also managed to support members in terms of messaging and narrative.
In the UAE, for example, MEADFA helped Dubai Duty Free reopen its shops. Additionally, we coordinated with ACI Africa and assisted in updating its Covid best practices according to industry recommendations.
How important is it for the industry to maintain a deeper dialogue with governments in the Middle East and Africa and what is MEADA doing to try and improve things on this front?
I strongly believe we require the attention and full support of our governments, landlords, and stakeholders. Duty free sales in general are considered the number one source of non-aeronautical revenue earned by airports worldwide.
Industry sales exceed $60 billion annually and our industry supports more than 650,000 jobs worldwide and contributes with $35 billion dollars to Global GDP. Communication with governments is crucial to ensuring continuity and the prosperity of the industry.
At MEADFA, we sent letters to landlords and governments in the region and issued unified operational measures for reopening duty free outlets to effectively manage this outbreak.
Through the Advocacy Working Group and our consultant Hume Brophy, MEADFA has been extremely active and is ready to provide support when needed.
What steps are being taken towards recovery in the region from airline, airport and brand perspectives? — Where does MEADFA fit in on this front?
The International Civil Aviation Organisation’s (ICAO) Council Aviation Recovery Task Force (CART) and related ‘Take-off’ guidelines for pandemic response and recovery are being employed by many states globally.
In many cases, however, the persisting variation in local pandemic status is making more extensive harmonisation challenging. The ICAO CART Task Force, comprising representatives of the ICAO Council States, is reviewing a number of ‘Take-off’ guidelines, proposed amendments and priorities as part of its upcoming CART Phase Two deliverables.
MEADFA is following up with ICAO and the Duty Free World Council (DFWC) to ensure the industry is well represented.
To better support recovery efforts, ACI World has called for urgent government action to introduce widespread and coordinated testing of international passengers — based on internationally accepted protocols and a risk-based and resource-effective approach — to enable the removal of quarantine requirements.
MEADFA will engage with regional stakeholders to reach a unified testing system in the Middle East and Africa.
Looking ahead to the end of the calendar year, how much do you think the Middle East & African DF&TR business will have suffered compared to the industry in other regions and why?
Tourism is a more significant part of African and Middle Eastern economies compared to other economies worldwide. It is, therefore, reasonable to believe that DF&TR has suffered more in this region than others.
What will be the main focuses for the Association in the build-up to hopefully hosting the next MEADFA Conference in 2021?
Despite the key engagements already achieved, more must be done to protect and defend the duty-free industry in the region.
Besides Covid-19, the industry is facing various key restrictions which MEADFA must contest. Accordingly, we need to ensure governments understand that DF&TR is a key source of income in terms of rebuilding airports and tourism economies.
Governments must also understand that the duty free environment is a different and unique channel and cannot apply the same regulatory restrictions as in the domestic environment.
Moving forward, MEADFA will share the best practices from Europe on how to best face Covid-19 and recommend and support the recovery and sustainability of the industry.
Why do governments in the region not understand the unique nature of the duty free and travel retail industry?
Governments in the region have different political and economic situations, which require them to make certain decisions. This is understandable, especially during this difficult period caused by the pandemic.
I also believe governments in the region should consider the importance of DF&TR and how much it contributes to the travel industry.
I urge governments to coordinate with us at MEADFA to ensure a winning situation for all parties. Dialogue and mutual benefit are in our interest and we will continue working with governments to ensure restrictions are eased and to provide a better experience for our travellers.
How is the Middle East and Africa progressing in terms of trying to move away from quarantine travellers and trying to introduce coordinated testing procedures?
The majority of Middle East and African countries are following international and local protocol to contain the virus. Depending on their risk level, countries are moving forward to different measures. Some have replaced institutional quarantine with negative PCR tests before departure and additional negative PCR tests on arrival.
Others have replaced institutional quarantine with home quarantine. I cannot stress enough the need for coordination and a unified set of measures to ensure the health and safety of our travellers.
How is the Middle East and Africa progressing from a re-start standpoint?
Unless travel restrictions are coordinated and unified, confidence among travellers will not be restored. The route to recovery will be very slow, especially as a vaccine is yet to be found and distributed worldwide.
Even then, it will take time for travel to return to 2019 pre-pandemic levels. Collaboration, cooperation and consistency between governments across the industry is key to rebuilding global air services’ capacity and keeping passengers safe, healthy and secure.
We will continue engaging with global associations to guide the way forward and ensure the essential role of our industry in the wider ecosystem is restored.
What can be done to give people confidence to travel and crucially purchase in duty free and travel retail?
The travel retail industry has faced many challenges. This pandemic, however, is the toughest and sales figures have dropped drastically.
Despite everything, we need to move forward, adapt, work together and create new opportunities during this abnormal situation.
As mentioned previously, we are engaging extensively with governments and seeking different ways to tackle the impact of the pandemic. I would like to take this opportunity to call for forces to unite during these difficult times.
Global industry associations including MEADFA, ICAO, DFWC, ACI WORLD, the International Air Transport Association, European Travel Retail Confederation and Asia Pacific Travel Retail Association are working together to mitigate against the effect of Covid-19. They are striving to bring back the confidence travellers need to resume their travel plans and purchase from duty free shops around the globe.
What do you expect the post Covid-19 duty free and travel world to look like in the Middle East and Africa?
I personally believe that in every setback there is always a silver lining. The is despite the difficult repercussions of Covid-19 on humanity, economies and the wellbeing of citizens worldwide.
There will be more emphasis on technology and e-commerce. We have recently witnessed several digital expos, webinars and online meetings, which I believe have removed borders among industry players and brought us back together to discuss new business deals, product launches and so on.
Despite the cancellation of several face-to-face meetings and exhibitions, industry personnel have overcome this and moved forward with business.
See the upcoming November edition of TRBusiness for more from our exclusive interview with Haitham Al Majali, President, MEADFA