Building for the long haul
The general upturn in the regional industry over the past year was reflected in the particular results that Aldeasa achieved in its businesses in Chile, Peru, Colombia and Mexico. Talking exclusively to Frontier, an Aldeasa spokesperson noted that the past year had been a very good one for the entire international business of the company – in the case of Latin America, realising an increase in sales of more than 28% with respect to the previous year: “Above all this was thanks to the recovery of business in Mexico after the passing of Hurricane Wilma, and the improvement in other parts of the operation.”
Results like that are fuelling optimism about Aldeasa’s place not only in these markets but worldwide. The company describes itself as “in the midst of a process of growth in the whole world” and includes in that process Latin America, “where we have always sought to expand and improve our business. It goes without saying that within that expansion process is our desire to win the competition for the duty free business in the new terminal at Mexico City International Airport, in which we are participating in response to an invitation received from the airport authority.”
Can Aldeasa succeed at Mexico City? It will be no easy task with competition from the likes of Dufry and Aéroboutiques de México, but neither would it pay to underestimate Aldeasa’s candidacy. Following its success in securing the duty free contract for the new Terminal 3 being built at Cancún International Airport, Aldeasa is gaining momentum and scope in Mexico.
To date, the story is all about southern Mexico and a strong working relationship with the authority governing airports in that region, Grupo Aeroportuario del Surese (ASUR). Last October ASUR extended to 2017 Aldeasa’s existing concessions at Cozumel and Mérida airports, as well as the Terminal 2 business at Cancún. For Cancún’s new terminal – built to replace the old Terminal 1 destroyed by Hurricane Wilma, and due to open mid-year – the contract will also run to 2017 and provides for an 1800sqm airside store. The new agreements permit Aldeasa to continue its committed development of the business, the company has stated.
ASUR forecasts a significant increase in passenger traffic with the opening of Terminal 3, considering that Terminal 2 is at capacity. Cancún’s traffic for the month of February was 970,000, up 34% on the same month in 2006, reflecting the ongoing recovery in numbers after Wilma.
“Aldeasa will have a good position in the new terminal, with a spacious walkthrough store in the departures area. This will permit all the categories that are to be sold in the store to have a good presence and, moreover, to have some significant areas for instore promotions,” the spokesperson said. Aldeasa will also have a store in the arrivals area with a range targeted to arriving passengers.
The themes of consolidation and exploration of new strategies are also in evidence across Aldeasa’s South American operations.
In Peru, the prospective expansion of airside retail space by Lima Airport Partners (LAP) offers fresh opportunity for Aldeasa, which has been the key duty free operator since the new airport opened in February 2005. Lima Airport handled approximately six million passengers in 2006, up almost 7% on the previous year.
The departures store at Lima Airport remains at the heart of Aldeasa’s Peruvian business, and the company is still seeking to increase the range and promotions within the store. In 2007 Aldeasa plans changes to the layout of its general store in the commercial zone of Perú Plaza, and a possible expansion of its arrivals store. “As regards the opening of the new stores and the expansion that LAP will undertake, Aldeasa is working constantly with LAP to continue promoting the commercial activity and possibilities for stores, and so we hope that also with this expansion a close collaboration will be possible.”
Meanwhile, Chile is coming off a boom year following completion of the walk-through departures and arrivals stores at Santiago International Airport. Aldeasa reports an increase in duty free sales of more than 30% in 2006 compared to the previous year, and the company spokesperson puts the largest part of this increase down to the new stores: “Due not only to the increase in penetration because the stores were converted into walkthrough, but also to the broader range of products that could be stocked thanks to the significant increase in commercial space.”
Completing the Latin American portfolio is Colombia, where Aldeasa is seeing the emergence of a new business era after the chronic instability that has plagued the nation: “It is clear that something is changing in Colombian tourism, and the improved security situation in the country is helping tourism to increase step by step.” This has helped fuel an increase in sales from the company’s duty free stores in the airports of Cartagena and Barranquilla, which in the past year saw increases of close to 20% and 15% respectively (on the back of 30% annual growth in 2005).
Currently, meeting the challenge of controls on liquids and gels is occupying Aldeasa’s attention in the region. Across its operations the security issues have impacted negatively on sales of liquor and fragrances, to a lesser or greater degree depending on the control measures implemented by different countries and their main destination countries.
Aldeasa, together with Asutil and other organisations connected with the duty free business, is committed to doing all that it can to ensure that Latin American countries are considered safe at the international level. “We don’t want Latin America to be excluded from any possible international agreement,” is Aldeasa’s viewpoint, and it is making its case to the European Union for proper regard to be given to the strict measures and procedures around the entry and handling of duty free merchandise.
This issue aside, recent results and the impressive extension of its contracts – at Santiago, too, there is a ten-year contract in place – make this a confident business with a long-term perspective.
Expect to see more of the Spanish operator’s colourful stores and more of its double-digit growth figures in Latin America.
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