ARI To Operate 11 Outlets At Kunming Airport in South-West China
Dublin Airport Authority (DAA) subsidiary Aer Rianta International (ARI) has signed a retailing contract with Yunnan Airport Group in China.
The agreement will see ARI operate about 650 sq metres of retail at Yunnan Airport Group’s new Kunming Changshui International Airport, which is due to open next January to replace the city’s existing airport. ARI will run 11 separate duty paid stores selling branded skincare products, perfume and cosmetics, fashions items, accessories and other goods.
The outlets will be ARI’s first in China. The company, which is an expert in international duty free and duty paid airport retailing, currently operates businesses in North America, the Caribbean, Europe, the Middle East and India.
“This is a very significant strategic move for ARI, as it means we will be operating outlets in the fast-growing Chinese airport market for the first time,” said outgoing ARI Director General Eamon Foley. “The Chinese aviation market is experiencing phenomenal growth and we are very excited at the potential for further opportunities in China,” Mr Foley added.
Last summer, ARI’s parent company DAA signed a strategic collaboration agreement with the Yunnan Airport Group, which operates 11 airports in south-west China, and it is hoped that the deal to operate 11 outlets at Kunming Changshui Airport will be the first of many partnerships between the two airport authorities.
“ARI has a proven track record in international airport retailing and we look forward to bringing that expertise and retail flair to passengers at the new Kunming Airport when it opens for business next year,” said ARI’s incoming Chief Executive Jack MacGowan. “We have built an excellent working relationship with our colleagues in Yunnan Airport Group and we look forward to further strengthening that connection in the future,” Mr MacGowan added.
ARI’s move into China follows the company’s highly successful entry into the Indian duty free market. ARI’s Delhi duty free business opened in the new Terminal 3 at Indira Gandhi International Airport just over a year ago and has performed exceptionally well during the past 12 months.
The new Kunming Airport, which is currently under construction, is a world-class facility, capable of handling up to 70 million passengers per year.The airport has four runways and its new terminal will be the largest single terminal building in China. The new airport is expected to be China’s fourth largest after Beijing, Shanghai and Guangzhou. The ARI venture in China will initially employ about 100 staff.
The existing Kunming airport, which will close when the new airport opens, is currently the seventh largest airport in China by passenger numbers. The new Kunming airport will handle about 24 million passengers in its first year of operation and passenger numbers are expected to double within the next five years.
The aviation market in China is expected to expand rapidly during the current decade. Total passenger numbers are forecast to increase from 266 million last year to 700 million in 2020 while the number of Chinese airports is expected to grow from 176 to 250 during the same period.
ARI, which is a subsidiary of the Dublin Airport Authority, is one of the world’s largest airport retailing companies and operates in the Middle East, Cyprus, India, Canada, the Caribbean, Eastern Europe, Russia and the Ukraine. It also holds minority shareholdings in Dusseldorf Airport in Germany and in Pafos and Larnaca Airports in Cyprus. The company has a role in 24 airports in 14 countries, and also operates downtown stores and inflight retail.
ARI employs approximately 3,000 people worldwide and had a managed turnover – including management contracts and associate companies – of almost €1 billion last year. Profits increased by 40% last year to €18.8 million. ARI’s North American business was named Retailer of the Year at the prestigious Frontier Awards last year for its newly re-designed Montreal business while its Cyprus outlets won the Best Marketing Campaign of the Year by a Retailer at the same event.
Yunnan Airport Group
Yunnan Airport Group operates 11 airports in south-west China. It is currently building a new airport at Kunming, the capital of Yunnan province, which is designed to be China’s fourth largest airport. The new Kunming Changshui Airport will replace the existing Kunming Wujiaba Airport, which is one of the oldest in China.
Yunnan Province, which has a population of about 46 million, is currently undergoing rapid economic growth. It is located in south-west China and borders Vietnam, Laos, and Myanmar (Burma). During the first quarter of 2011, Yunnan’s economy grew by an estimated 12.5%, while retail spending increased by 17%. The local economy of Kunming, which has a population of more than 6 million, increased by more than 14% last year.