www'rdgsolutions'com

1
Optimising Airport Income from Non-Aeronautical
Areas

• A Presentation by
• Ian Lowden
• Managing Director,
• RDG Solutions
• www.rdg-solutions.com
• 44 161 234 2711

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Non-aeronautical has the following key areas

• Specialist Retail
• Duty and Tax Free
• Food and Beverage
• Car Parking Car Rental
• Advertisng Sponsorship
• Property

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Retail

• Around 35 of floor area
• 40 of income
• 50 of outlets
• Average penetration rate 33 of intl
• 77 concession length 5-6 years
• Typical concession fee 25
• Business Drivers
• Passenger throughput
• Dwell time
• Mix of concessions
• Concession agreement
• Concession performance

4
Duty Free

• Around 15 of floor area
• 15 of income
• 10 of outlets
• Average penetration rate 28 of intl
• 41 concession length 5-6 years
• Typical concession fee 25
• Business Drivers
• Passenger throughput
• Dwell time
• Concession performance merchandising mix
• Security regime
• Tax regime

5
Food and beverages

• Around 15 of floor area
• 30 of income
• 50 of outlets
• Average penetration rate 43 of intl
• 41 concession length 5-6 years
• Typical concession fee 25
• Business Drivers
• Passenger throughput
• Dwell time
• Passenger mix low cost v full service
• Floor plan / Adequate space for back up
• Concession offering

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Car Parks

• Customer Requirements what do they want? What
  do they need? Opportunity for added value?
• Product choice and differentiation - short
  stay/meet/greet, long stay, business
  parking/chauffeur drive/ valet parking , leisure
  products. Whats your USP?
• Business Drivers
• Operator contract agreements type of agreement,
  length of agreement, capital investment
  requirements, maintenance.
• Competitive tariff management local market
  tested, competitive, flexible, seasonal
• Quality of facility design layout, environment,
  easy of use.
• Terminal Integration - controlled forecourt,
  pick up/set down strategy.

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Advertising and Sponsorship

• Often around 5-10 of airport revenue
• Increasing number of opportunities poster
  boards to airbridges
• Naming rights new and most contentious
• Business drivers
• Contracts
• Infrastructure
• Agency vs in-house

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Property

• Can add 10-20 of airport revenue
• Dependent upon
• Area
• Ownership
• Conditions
• Access
• Airport activity
• Local business and demographics
• Airport ambition

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Effective Non-Aeronautical Management

• Optimising revenue can be achieved through
• Organisation clear responsibilities, target
  driven
• Skills/knowledge management understands
  consumer behaviour and retail industry
• Information passenger flows, concession
  performance, competitor behaviour, use of IT
• Infrastructure floor plan, passenger flow,
  FIDS, car parks
• Commercial concession agreements, negotiation,
  partnership

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Non-aeronautical Health Checks

• A quick way to diagnose the gap between great
  and mediocre performance
• tour the terminal and car parks
• meet the key concessionaires and your team
• review the passenger traffic and non-aeronautical
  sales data
• quickly look a the key concession agreements
• bullet point summary of gap

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RDG Solutions, Moodie Report

• Through understanding passenger
• throughput and mix, we will
• Identify commercial needs
• and opportunities
• Optimise commercial space planning
• Evaluate existing concession offerings
• Maximise income return on investments
• Optimise commercial contracting
• arrangements

• Commercial income data
• for the airport industry
• Benchmark analysis for some 40 airports
• Historical trend analysis
• of airport commercial performance
• Compare your airports
• performance by key business area