After yesterday?s sporting activities the Trinity Forum 2007 conference began this morning with a welcome by Robert J. Aaronson, Director General Airports Council International and Martin Moodie, Publisher of the Moodie Report.

Moodie thanked the 300 delegates for their attendance and explained the concept of the trinity for those that may not be familiar. He also thanked Dubai Civil Aviation for their support, without which he added that the conference would not have been possible.

Aaronson said that due to everyone?s support, this would now be an annual event and also thanked all of the sponsors. He said many partners in the trinity are not well known to each other, whilst being business partners.

He described ACI?s vision as advancing the interests of airports and to promote excellence in airport management and operations in the interest of a safe, secure, environmentally responsible, efficient air transport system that serves customers well.

He said the meeting in Dubai was timely and despite problems in the business, the future was bright and passenger numbers were increasing along with cargo tonnage. Airports and their business partners have a massive challenge in keeping up with this, he said, and the concern is that they may not succeed, leading to unacceptable congestion and delays which is ?not the kind of quality service our passengers should expect?.

Aaronson then handed over to His Excellency Sultan Al Mansoori, Minister of Development for Government Sector who also welcomed every one to Dubai. He said he was delighted and honoured to have been selected to host this first time event.
His Excellency added that Dubai?s vision for the future and its utilisation of non-aeronautical revenues such as duty free and food and beverage was well understood in the financing of airport development and pointed to Dubai Duty Free and Dubai International Airport as success stories in the region.

He said that the latest project, Dubai World Central will be a 140sq km airport city with six runways that will ?surpass your imagination?. The total passenger capacity of both airports will be in the region of 180m and he was confident that duty free sales will experience a six-fold increase.

He said he thought such success requires close relations between airport operators, suppliers and the brands and all were dependent on mutual support between them.

Moodie then returned to the podium to introduce Colm McLoughlin, Managing Director, Dubai Duty Free for the first of the dual keynote speeches, entitled Dubai Duty Free – the next revolution.

DUBAI DUTY FREE – the next revolution

But before he began his presentation, McLoughlin broke off to explain that there had been an incident at Dubai Airport this morning where a Biman Bangladesh aircraft had experienced technical difficulties, but there had been no fatalities and only fourteen injured. He said Dubai Duty Free staff were busy handing out food and drink to delayed passengers and the airport would be closed for a few hours.

[MORE DETAILS: It now transpires that Dubai International Airport is expected to be closed for at least eight hours after a Biman Bangladesh Airlines aircraft was involved in an accident while trying to take off. Fortunately, all 236 passengers, including crew, are safe, although 14 passengers are said to have minor injuries.
?Biman Bangladesh Airlines flight BG006 flying from Dubai to Dhaka had a minor accident during take-off,? the Dubai Civil Aviation Authority said in a statement. ?Now the airport will be closed for 8 hours minimum, starting 0630 hrs, March 12, 2007, to ensure the runway is safe to use.?
Hundreds of passengers are currently stranded at Dubai airport, as many outbound flights are cancelled or suspended and all incoming flights are being diverted to airports at Abu Dhabi and Sharjah,-Ed].

Moving on to his presentation McLoughlin outlined the successes of Dubai Duty Free, including increases in spend per head and the expansion of the arrivals area.

He said that with the current problems, airports should look at how much business could be transferred to the arrivals model and Dubai Duty Free was looking to increase the current $6 per head spend by arriving passengers to $10.

McLoughlin then went through the developments in Dubai itself, highlighting developments such as Palm Jumerah and Burj Dubai, which will be the tallest building in the world when finished.

Dubai International Airport itself will receive investment of $4.5bn with the development of the current airport and the new airport, while Dubai World Central International is a $32bn investment with six ?cities? – the first phase scheduled to open in mid-2008.

The developments of Concourse 2, T3 and Concourse 3 as well as Dubai World Central will give Dubai Duty Free 25,000sq m of retailing space. He said that they will spend $50m on world-class fit outs and will continue their vendor support programme.

He also pointed to the need to use all the new available technology to help in promotion and advertising to sell to passengers. Automation is key in logistics, he said, and they have been looking at other operations such as that of Gebr Heinemann in Hamburg.

McLoughlin said DDF will be a $1bn sales turnover company by 2009 and possibly by 2008, but it also needs to be aware of competition and the need to study High Street retailers a lot more than it currently does. He said the duty free industry should spend a lot more promoting itself to encourage passengers to spend at the airport.

We need to provide better value, he stated. He said value works – offering a 23% discount on their 23rd anniversary had led to sales of $8m because of the discount – a four-fold increase.

Realistic bidding is something mentioned at every trinity forum, he said, but he would not tell anyone how to suck eggs. The aviation security issue must be tackled he said and pointed to an article headline ?It takes 27 EU ministers to change a light bulb? intimating that the industry was in danger of the same treatment.

He said the industry has not got very far with the formation of a Duty Free World Council and called on TFWA to open its membership to all, not just suppliers.

He said that as an industry, we are the most self-awarding industry in the world and there are too many awards and conferences (which received a round of applause from the audience) – however he added quickly that this conference and the MEDFA conference were obviously fantastic.

As regards ETRC, he asked where the contribution from the big brands was, whilst acknowledging the support of those who had already dug into their pockets. He also made the point that it is important to improve the industry?s reputation and concluded by calling on it to look at its social responsibility and not just by giving money, but by expanding this ethos to the whole environment.

MARK RICHES ? A New Vision

The second keynote speech of the morning was called a New Vision and was delivered by Mark Riches, Managing Director World Duty Free. He said his presentation was a tale of two halves and the industry is certainly not in the comfort zone at the moment.

Riches said the conference brief was to look at a new vision for travel retail and he said that really meant a new reality for the business. Firstly he suggested that the membership of the trinity is too narrow. He said it has rightly been pointed out that the fourth partner is the customer, but he called for airlines to be a part as well, but noted that the airlines were simply not there.

Interestingly, Riches said he thinks the airlines are the link between all the elements, although he made a few observations first. To start with, he said, airlines were happy to have customers when things go right, but when they go wrong these passengers suddenly become airport passengers and they are nothing to do with the airline.

Riches said airports are not immune either. Queues, broken travellators and a lack of signage are all things that create a bad customer experience, he said. There are many honourable exceptions to the criticisms he said, but they are exceptions nonetheless.

The opportunity for the industry is that 90% of passengers are ABC1 passengers and he challenged the audience to imagine what a WalMart or a Tesco would do with these people if they had them for three hours.

Moving on to security, Riches said that the liquids restriction is arguably the biggest single threat to the industry and it will not be possible to switch business to arrivals everywhere.

He too pointed to the work done by ETRC and asked how many companies had contributed to the campaign. He also pointed to Doug Newhouse?s comments that more governments had to be persuaded to talk with the EU on this issue, otherwise the transit business [for liquids] will be dead and buried.

He said suppliers that said their sales had not been impacted at the Monaco ACI conference last month had not been particularly helpful and this certainly did not did not impress Robert Missen, the European Commission?s Deputy Head of Unit, Aviation Security who was obviously present at that event.

Riches said this just gave the impression that the industry was in disarray and everything was actually okay. He said there was no doubt that they had been affected and this will all come out later.

The only way is up then, he said? Consistency remains important, said Riches, and he asked whether it would not be a good thing for the industry to adopt a quality mark or at least guarantee that it is always 10% below High Street prices for example.

Globally, Riches said that retailers are sustaining year-on-year increases domestically and airports should not rely on increasing passenger numbers, but aim to increase spend per passenger.

The new vision should be united customer service, he said, and in order to protect ourselves as an industry, perhaps we need a small team of people that are funded to always be on hand to respond to commercial threats, such as we are seeing at the moment.

The passenger needs to become our biggest ambassador, not our biggest critic, he concluded.Both McLoughlin and Riches then joined Moodie on stage for a questions and answers session which focused on the security problems and the need for a global body to protect the trade.

A comment from the audience also pointed to the need for there to be airlines present at the next Trinity conference as they have the power to provide the information that passengers need, particularly in relation to the liquids issue.

After the coffee break, the morning continued with a short film by Marshall Arts, covering airports such as Singapore Changi, Cyprus (Paphos and Larnaca), and Oslo.

SEIZING MARKETING OPPORTUNITIES

Session 2 was entitled Seizing Marketing Opportunities and began with a live interview with Dufry Ceo, Julian Diaz.

Diaz ran through the current state of the business for Dufry at all its locations and said the overall strategy was focusing on creating value for the shareholders, customers, airport authorities and suppliers.

He said it was his opinion that this business has a lot of potential growth. The increase in international passengers meant that growth was phenomenal, however the industry was still very fragmented, so growth through acquisition was also a focus, he said.

It is important to note that the international business has been growing at around 6%, as opposed to GDP growth of around 3%, he said, so despite the terrorist threats, etc, optimism is important as the business is growing despite the problems.

He discussed subjects such as overbidding, the IPO?s the company has undertaken and his thoughts on what airports can do to help create value – a strategic alliance – as he described it.

He said Dufry will not participate in tenders that are too short, or which do not have enough profitability. On the security issue, he thought the lack of communication with customers could have been even more damaging than the regulations themselves and the industry needs to be able to approach things before they arise, rather than just responding to problems as they happen. Diaz concluded in an upbeat fashion, saying he was very optimistic about the future of the industry.

SUNG-JOO KIM: entitled ?Why women are the key airport consumers of the future.?

Sung-Joo Kim, Chairperson and Ceo of MCM followed with a presentation entitled ?Why women are the key airport consumers of the future.?She briefly outlined her personal history and explained the growth of the Sung-Joo Group that she built from scratch.

Kim said the Asian financial crisis conversely assisted in helping women to emerge as entrepreneurs and they are now becoming increasingly important in the Asian financial market. She outlined the development of MCM, and explained that modern, working women want practical products; service; value for money, comfortable ambience and a holistic, spiritual approach.

Luxury has a new meaning she said – simple, functional, elegant and high quality products. Products must be multi-functional and women are now combining expensive and inexpensive clothes – Gucci and Top Shop for example. Women want niche items, lightweight luggage and smaller sizes, she said and she asked why these things are not catered for in airports?

Why should travel retail not be a trend-setter, she asked? She mentioned a few up and coming designers and outlined consumer trends. These are limited edition, customised, personalised and unisex and the things that would appeal to working, travelling women.

Airport environments themselves need to educate and inspire. How about exhibition spaces, museum and cultural shops and information points, she said? She pointed to a few examples, such as the Beauty Lounge at Frankfurt Airport and ME shop at Bangkok Airport.

Concepts such as the Be Relax NapSpace are also good for appealing to working women, she said. In relation to corporate sustainability Kim said that 10% of her profits go to helping women in Korea. To be environmentally and socially conscious and communicating your values will be more beneficial when communicating to women travellers.

She voiced her pleasure at the development of WIT (Women in Travel) and urged all those in the audience to listen to women in the industry and promote women in the industry as they will know what women want to buy.

KJELD BINGER – Investing in a Vision
Kjeld Binger, Ceo of Dubai Aerospace Entreprise Airports Division then outlined his company?s vision for the future in his presentation entitled Investing in a Vision. He explained the composition of the company and said that their vision is creating and delivering innovative and aerospace solutions for tomorrow and their mission is to transform the aviation experience.

He explained that the company is expected to cover around 7% of the GDP of Dubai by 2020. He called for the industry to think out of the box when looking at airport development and said that airport operations should be analyzed in a new perspective.

He also importantly noted the need to clear the traditional conflict of interest between airlines and airports and remove the traditional passenger perception of airports being a bad place to be.
(ENDS)