With annual revenues from airport retailing in India which includes duty free sales, set to cross US$ 1 billion this year, two Miami-based firms – Duty Free Air and Ship Supply (DFASS) and In-flight Services Worldwide – have queued up before the government agencies seeking permission to operate the country. These firms have joined a long list of overseas operators who have come to India to offer duty free services, including Switzerland-based Dufry, Dubai-based Flemingo, Turkish firm Setur Sevis Turistik, Dublin-based Aer Rianta International and Spanish firm Aldeasa, among others.
According to a report by the Financial Express, experts say there are three reasons for overseas airport retailers flocking to India – the healthy 20%-plus growth rate, increase in retail space on some existing international airports and increasing footfall and per passenger spend on airports.
“We expect 18-25% growth in the airport retail sector on an average air traffic growth of 14-15% y-o-y,” Amber Dubey, Director of Aviation for KPMG India was reported saying.
Industry sources said that Delhi International Airport (DIAL), the country’s largest airport operator by aircraft handled, is expected to clock US$100 million revenue from airport retail in the current financial year, while other airports, like Mumbai and Bengaluru, will do a business of US$60-80 million each. More duty-free shops are expected to come up at Delhi, Mumbai, Bengaluru, Kochi and Hyderabad international airports.
DFASS, one of the largest duty-free operators in the US with a turnover of $150 million, wants permission to set up shop in India, while its rival In Flight Services Worldwide, wants permission to supply duty-free products on board Indian carriers operating in the international circuit.