LANGKAWI: Malaysia Airports Holdings Bhd (MAHB) is aiming over RM600 million in non-aeronautical revenue contribution by 2021 by leveraging on high yielding product category.
Senior general manager commercial services Mohammad Nazli Abdul Aziz said the airport operator’s non-aeronautical revenue contribution would be supported by the influx of growing middle-class passengers particularly in the Asia Pacific (APAC) region.
“We want to be competitive as our regional peers. We are committed in positioning Malaysia as the best retail destination in South East Asia (SEA) region.
“Our airports are now reaching capacity very fast with the combination of the right location, lower travelling cost and affordable currency, making Malaysia as the sought after holiday’s destination among tourists,” he said during a media group interview at the Airport Council International (ACI) APAC Small and Emerging Airports Seminar (SEAS) 2018, here, today.
Mohammad Nazli said MAHB expects the local aviation sector and its retail business would continue growing rapidly in the next five to seven years.
“With that opportunity, we can double up our retail business because we are in the region with growing middle class population like the Chinese, Indian and Indonesian,” he added.
These tourists would often travelling as their income have grown rapidly, which in turn trigger them to shop mainly in the e-commerce market place.
He also said MAHB’s group non-aeronautical revenue is expected to increase in the next five years, supported by the booming high-end fashion retailers located in two terminals at the Kuala Lumpur International Airport (KLIA).
Further, MAHB is also keen to develop its available land space within KLIA by adding more car park space and land-based retail to complement the airport’s existing facilities.
However, strategic alliance with the airlines is crucial to maximise the passenger traffic flow throughout MAHB’s network of airports by adopting e-commerce initiatives.
He said there would be more high-end brands retailers at KLIA as the airport operator is currently reviewing the tendering processes and studying passenger shopping patterns as well as reformatting retail offerings across its network of airports.
MAHB would continue providing premium retail offerings in its duty-free zone airports including fashion outlets, food and beverages, Mohammad Nazli said.
Previously, NST Business reported that MAHB aimed to increase its non-aeronautical revenue to the group by five per cent within five years.
Non-aeronautical revenue contribution rose 10.5 per cent to RM531.1 million in 2017 driven by stronger sales registered by the concessionaires and retailers.
Non-aeronautical segment includes duty free and non-duty free outlets, food and beverage outlets at designated airports in Malaysia, hotel operation, agriculture and horticulture as well as other investment holdings.
Mohammad Nazli said the combined retail sales of the two terminals at KLIA was recorded at RM2.2 billion last year.
MAHB's sales forecast for 2018 for both terminals is expected to reach RM2.4 billion sales with 66 per cent derived from the duty-free segment.
High-end retailers including Rolex, Michael Kors, Coach and Furla will set up their outlets at klia2 in the first quarter next year.