KAC to launch first nationwide duty free review
State-run Korea Airports Corporation (KAC) is preparing to launch its first nationwide review of its airport duty free concession contracts and merchandise offer following two license awards last year.
This is part of its long-term efforts to boost revenue from travel retail concession fees and other commercial activities, including restaurants and airport car park services.
“This year we are looking at our new concession fee system,” reveals Kim Su Min, Korea Airports Corporation’s Commercial Facilities Team Assistant Manager, in an exclusive interview.
“Sales are important to us and to the airport concession operators. We are bringing in a South Korean consultancy, Samil PWC, to review all our commercial contracts.
IN-DEPTH PASSENGER SURVEY
“Another company, Urban Property, is reviewing duty free merchandise in every one of our airport terminals.
Duty free revenue at Gimhae Airport totalled about $140m last year.
“We have a fixed annual rental fee and calculate the payment depending on the operator’s total annual sales.
“The fixed rental is the MAG payment. If they exceed the agreed amount then they pay the higher concession fee rate.
“Last year DufryThomasJulie at Busan Gimhae Airport and Kookmin at Muan Airport paid extra as they had good sales.”
KAC’s review of airport commercial operations will include an in-depth survey of passenger attitudes as part of wider efforts to modernise and upgrade each airport’s public interface.
WEBSITE MAKEOVER
“Our strategy also includes the renovation of our websites – at the moment they only show the airport’s location information and contact telephone numbers,” Kim said.
“We are thinking about providing more duty free shopping information including details about different brands and sales promotions.
‘This year we are doing a focus group survey to better understand our duty free customers.
Jeju International is one of KAC’s best-performing airports for duty free sales.
“Usually we just have regular passenger questionnaires, so it is the first time for us to do focus groups on all our international airports.”