Airport forecasts €25.5m revenue from retail business in six years

The contract signed between Malta International Airport and Nuance Malta Ltd, leaders in the international airport retail business, will guarantee revenue of €25.5 million for six years, airport CEO Julian Jaeger said yesterday.

The project involves 670 square metres of walk-through duty-free shopping in the airport's new area. It should open in December, though there was the possibility that the date could be advanced to August, Mr Jaeger said.

In 2007, the commercial concessions around the entire airport generated €4.6 million (Lm2 million), he said by way of comparison. MIA would also be focusing on its cargo business, which was on the way to recovery with an 8.8 per cent improvement after a difficult period in 2007.

Of the 20,000 square metres allocated to cargo business, 3,000 were being used by three companies, following the signing of an agreement with DHL Express, Mr Jaeger said, expressing confidence in further growth and customers in the area.

He was addressing the 16th annual general meeting of shareholders for the first time as the CEO, telling them about the company's positive financial results in 2007 as well as the capital projects that are under way.

Last year, MIA experienced the highest turnover the company has had so far at over €44.3 million (Lm19 million), registering a record net profit of €8.8 million (Lm3.8 million).

The AGM approved a resolution to distribute a total net dividend of almost five Maltese cents, marking an increase compared to 4.7 Maltese cents last year.

Speaking about 2008, Mr Jaeger said it was so far showing an extraordinary passenger growth of 21.3 per cent, meaning an increase of some 95,000 passenger movements, partly due to a 16 per cent increase in seat capacity. Nevertheless, such an escalation should not be expected to persist throughout the year, he said. MIA is expecting a growth of 6.8 per cent at the end of 2008, although it plans to review the situation towards mid-year.

To ensure positive results into 2008, MIA's own strategy is to ensure a steady growth in the aviation sector and consolidate its non-aviation activity. In terms of the latter, it would be effecting structural modifications to the retail area and increasing floor space to generate more revenue.

The new VIP lounge in the central area of the airport, which is under construction, should be ready by June, after which works would start on the fashion, jewellery and sunglasses outlets in that part. MIA is in talks with a food and beverage operator, he said, adding that the plan is to have a casino next to the VIP lounge.

A further restructuring project is planned for the second quarter of 2008 to enhance the arrivals area, including a convenience store, instead of the current cafeteria, which is moving to the area of the car hire counters.

The store, selling anything from newspapers to toiletries and food, is spread over 280 square metres and should serve to attract more local business over the weekends, Mr Jaeger said.

A third phase should see the renovation of the departure lounge and the entire project, costing some €4.5 million (Lm1.93 million), is scheduled to be completed by mid-2009.

Given all the works that would still be in progress until 2009, it would not be realistic to foresee an impeccable operation at MIA this summer, Mr Jaeger said.

MIA directors remained unchanged, except for Winston J. Zahra, whose term of office expired yesterday and was replaced as a government appointee by Jenny Camilleri.