Raising The Bar
With the continuing development of Terminal 3 at Abu Dhabi International, and the appointment of DFS Group to run the dutyfree concession, it is all go for presiding airport authority and operator ADAC. David Davies hears the latest from Dan Cappell
BY any standards, it has been an eventful 12 months for Abu Dhabi Duty Free and the company that controls and oversees it, Abu Dhabi Airports Company (ADAC). Inevitably, much of this activity has centred around a well-publicised programme of expansion and redevelopment, concentrating initially on the construction of Terminal 3 – scheduled to reach completion this autumn – before moving on to Terminal 1 and the creation of a new Mid-Field Terminal.
There have, however, been quite a few other significant events along the way as this ambitious package has come closer to being realised. The departure of long-serving commercial director Niveen Ibrahim to join Pearl Azure Group last autumn was one such development. In replacing Ibrahim, ADAC sought one of the industry’s most respected executives, former ARI-ME general manager operations Dan Cappell, who came onboard in November and now occupies the role of vice-president non-aeronautical & business development.
There have also been several other major additions to the team at ADAC, which was created in March 2006 to spearhead the development of Abu Dhabi’s airport infrastructure, and has operated and managed both Abu Dhabi International and Al Ain airports since September of the same year. Most notably, Rudy Vercelli – an executive with considerable experience in aviation and airport management – became ADAC’s inaugural CEO in March this year, while the appointment of long-time Airport Authority Hong Kong commercial director Hans Bakker to a comparable role at ADAC was confirmed shortly thereafter.
But arguably the most significant – and surely the most surprising – development took place in February when ADAC revealed that it was to break with its long-term in-house operational model for duty-free retail at Abu Dhabi International Airport. A major agreement with the DFS Group cleared the way for the two parties to develop duty-free shops for the opening of the new Terminal 3 – to be served by national carrier Etihad Airways – and then Terminal 1 beyond that.
Speaking to Frontier on the first day of June – one month to the day before ADAC expects DFS to begin taking over duty-free operations at Abu Dhabi International – Cappell explains the momentous decision to adopt this new operational model. “I think it’s in line with ADAC’s vision of trying to establish Abu Dhabi International as ‘best in class’ in the Middle East and evolving that into best in class worldwide,” he says. “We asked ourselves three questions: Can someone else do it better? Can more money be made from someone else doing it? And can someone else make immediate step-changes in terms of the brands that they can bring to the table? The answer to all questions was ‘yes’.”
Following several months of discussions, it became clear that the ‘someone else’ bestplaced to achieve a superior retail offer at the airport was DFS. “It is one of the largest luxury goods retailers worldwide and, thanks to it being 68% owned by the LVMH Group, has a relationship with brands that we want to bring to Abu Dhabi. Having started discussion in November, we eventually reached an agreement [earlier this year] that met our needs and theirs, and decided to proceed.” Elaborating upon the reasons for ADAC’s decision to align itself with DFS, Cappell says that DFS is widely recognised “as one of the best in class, as having fantastic relationships with brands, and has thoughts, designs and layouts for the retail environment that are totally in line with ADAC’s vision.”
In addition to terminals 1, 2 and 3 at Abu Dhabi International, the agreement also encompasses Al Ain airport and Ghweifat Duty Free, the land border store situated close to Saudi Arabia. While unable to reveal specific details of new store developments, Cappell does reveal that the new deal with DFS covers all categories with the exception of gold, electronics (including mobiles), music/DVD, pharmacy and cigars, along with the airport’s newsagents.
“Terminal 3 is going to be very category-driven: perfumes & cosmetics will be one store, and so will liquor/tobacco, food and so on,” says Cappell. As to the actual brand selection… well, absolutely no one is letting on at the moment, such is the desire to preserve a sense of genuine excitement and mystery around the whole Terminal 3 endeavour. For now, Cappell is willing to admit only that there will be “a fantastic assortment of world class international brands which will be portrayed in a retail environment that obviously meets their criteria”.
While T3 – set to be completed and fully operational at the end of October – will be the initial priority for the new partnership, ADAC is already looking forward to the redevelopment of T1 and the new Mid-Field Terminal complex. “That is a completely different ball-game,” observes Cappell of the latter project. “It will be a building that has a capacity of 20m, rising in increments to 40m as demand grows, and it will have a huge commercial space available to us. More details will start to come out about this once we have opened T3, but our intention is to open the
complex in 2011.”
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