Airport Duty Free look for ways to adapt to a new normal

With airlines flying with very few passengers and to limited destinations, duty free and in particular liquor sales are feeling the brunt of it.

Airports Council International estimates a reduction of more than 4.6 billion passengers and a decline in total airport business revenues of more than $97 billion for 2020.

The slide towards service reductions varies by airport, with regional airports hit the hardest due to flight reductions and lower traffic. Major airports continue to offer basic service, such as takeaway food in each terminal, but businesses not deemed “essential” such as specialty retailers have remained dark.

In this scenario, Airports Council International (ACI) World forecasts that global airport revenues will be down at least US$4.2 billion in the first quarter of 2020 compared to pre-COVID-19 forecasts.

The loss is approximately equal to the total annual revenues of two major European or Asian hubs combined, the organisation said. ACI previously estimated that global revenues would reach close to US$39 billion, with the expected decline based on traffic trends under COVID-19 and constant unit revenues.

Non-aeronautical revenue hit

Most of the loss in revenues is expected to occur in the Asia Pacific region, with a difference of US$3 billion in projected revenue. An estimated loss of US$1 billion in Europe makes it the second most affected region. ACI noted that all regions will see a revenue impact from the loss of East Asia passengers.

Non-aeronautical revenue will be strongly impacted by the COVID-19 outbreak, ACI said. Chinese passengers in particular “tend to generate comparatively high revenue for retail concessions and other non-aeronautical services”. ACI noted that non-aeronautical revenues are usually seen as an “additional cushion” during economic downturns, but the heavy impact on them will “create a wider effect for airports worldwide”.