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TheMoodieReport.com: Alpha-Pantaloon partnership wins Delhi Airport duty free contract - 15/11//06
Source: The Moodie Report;The Moodie Report VIP News Alert
By Martin Moodie and Dermot Davitt
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INDIA. Alpha Future, a joint venture between Pantaloon Retail (India) and Alpha Airports Group of the UK, has been awarded the duty free retail contract at Delhi International Airport.

The contract, valued at around INR5 billion, is for a period of 3.25 years, Delhi International Airport Pvt Ltd (DIAL), said today.

Under the contract, the Alpha-Pantaloon venture will introduce a wide range of products from global brands such as Armani, Gucci, Christian Dior, Nike, Calvin Klein and Swatch at Delhi airport stores. Alpha runs more than 140 retail outlets across 40 locations in the UK, Europe and US. Pantaloon Retail*, which is part of India's Future Group, operates more than 140 retail stores across 33 cities in India.

"Their extensive experience across the globe and in the country matches DIAL's vision for providing a world class experience to travellers at Delhi Airport"
Srinivas Bommidala, Managing Director, Delhi International Airport Pvt Ltd
DIAL Managing Director Srinivas Bommidala said: “We are extremely pleased to appoint Alpha Future as the duty free operator for the Delhi Airport. Their extensive experience across the globe and in the country matches DIAL's vision for providing a world class experience to travellers at Delhi Airport.”

Alpha Group CEO Peter Williams added: “This exciting development continues to build on our Indian sub-continent experience and forms part of our strategy for the region.”

DIAL is a joint venture company comprising India's GMR Group, Germany's Fraport AG, Malaysia Airports Holdings BHD and India Development Fund. It has been given the contract by the federal government to revamp and operate Delhi airport for 30 years, with an option to extend it by another 30 years.

The tender closed on 18 October after the receipt of Expressions of Interest ended in September.


The sign of things to come: (Left to right) Alpha Asia Commercial Director Prasantha Fernando, Alpha Asia Managing Director Paul Topping, Future Group Director Rakesh Biyani and KK Rathi of Pantaloon Group sign the MOU for the joint venture. The alliance has already paid rich dividends
Located in the national capital, the airport’s international Terminal 2 handles 35 airlines flying overseas routes. It is estimated to account for over 25% of India's international passenger traffic. Duty free there is currently operated by India Tourism Development Corp.

Given its strategic and commercial importance in India, currently the subject of unprecedented attention from international travel retailers, interest in the tender was hot.

Other companies to have initially examined the opportunity included The Nuance Group in partnership with local partner Shoppers’ Stop; DFS Group which has high ambitions for India; King Power (HK), Dufry; Flemingo International and Aer Rianta International. Some of those did not pursue their interest.

GMR-Fraport is operating in a joint venture with Airports Authority of India in the US$1.2 billion project to build a new airport in Delhi. The first phase of the airport should be ready with the completion of a new integrated terminal building in 2010. This new terminal will cater to both domestic and international passengers and will be capable of handling 37 million passengers a year. Before that, a new domestic airline terminal and a third runway to complement existing two will be built by 2008.

COMMENT: What a mighty coup this is, both for Alpha and for an Anglo-Indian alliance that looked good on paper when it was announced and looks even better now. The news is also a personal triumph for Alpha Asia's much respected Managing Director Paul Topping who has channelled all his trademark energy into securing the partnership and the contract. His and Alpha's long-standing commitment to India has paid rich dividends here.

The company's existing Indian operation at Cochin Airport has always been a marker that Alpha can point to in terms of the qualitative results that can be achieved in India, given the right relationship between airport and concessionaire. For Cochin, now read Cochin and Delhi. Put that, in turn, with the company's thriving retail and wholesale operations in Sri Lanka and you have a real regional powerhouse emerging. One suspects the progress won't stop there.

A good day too for new Alpha Airports Group CEO Peter Williams. After all the company turmoil of the past year, today's news is the sort that any CEO loves delivering to the city.

*BACKGROUND TO THE ALLIANCE AND TO THE KEY PLAYERS




Delhi International Airport (pictured) is a hugely important airport within India, accounting for over 25% of international passenger traffic
Alpha Airports Group announced on 3 October that it had signed a Memorandum of Understanding to form a joint venture with powerful Indian domestic retailer Pantaloon Retail (India).

Future Group-owned Pantaloon Retail is the largest retailer in India, generating over US$440 million in turnover last year. Both Alpha and Pantaloon figured recently on a star-studded shortlist for the main duty free, travel retail and food & beverage concessions at Bangalore International Airport announced by The Moodie Report. The airport is due to be operational by April 2008. Alpha bid on the international Departures retail and food & beverage packages while Pantaloon made its pitch for retail in the domestic Departures area.

Alpha said the alliance with Pantaloon is part of its strategy in investing in India to develop travel retail and food & beverage catering businesses at leading airports. Alpha and Pantaloon Retail are in discussions about the travel retailing and food & beverage opportunities which exist at Bangalore, Hyderabad and Delhi airports (now secured) the company stated in October.

Alpha Airports Group Plc is one of the world’s leading aviation support services companies, providing retailing and catering services for airlines and airports. Alpha’s 6,900 staff service over 100 airlines worldwide and operate from over 200 outlets at 83 airports in 15 countries.

Alpha Retail offers retail and catering services for many airports including Heathrow, Belfast, Orlando and Manchester. Alpha Airport Shopping and Alpha Tax and Duty Free provide a range of consumer brands to 21 airports across the UK, Europe, US and Asia. World News (confectionery, tobacco and news), Glorious Britain (destination merchandise) and Zinq (accessories) are specialist stores operating at 25 airports in the UK, Europe and USA. Alpha Retail offers restaurant, café and bar services at 22 airports in the UK, Europe and Middle East.

Future Group operates through six verticals: Future Retail, Future Capital, Future Brands, Future Space, Future Logistics and Future Media. The group’s flagship enterprise, Pantaloon Retail, is India’s leading retail company with presence in food, fashion and footwear, home solutions & consumer electronics, books & music, health, wellness & beauty, general merchandise, communication products, E-tailing, and leisure and entertainment.

The company owns and manages multiple retail formats catering to a wide cross-section of the Indian society. Headquartered in Mumbai (Bombay), the company operates through 4 million sq ft of retail space, has over 140 stores across 33 cities in India and employs over 14,000 people. Pantaloon Retail posted revenues of over Rs 2000 crore in the financial year July 2005–June 2006.

Delhi International Airport Ltd is a joint venture company. It comprises the GMR Group, Airports Authority of India, Fraport, Malaysia Airports and India Development Fund. DIAL is working towards the modernisation and restructuring of Delhi Airport. The project being developed by DIAL under Public Private Partnership has been given the mandate to finance, design, build, operate and maintain the airport for 30 years with an option to extend it by another 30 years.