Big duty free changes at Auckland Airport

Auckland Airport put its duty-free retail business out to tender. Two new operators - LS Travel Retail Pacific and Aer Rianta will take over from July 1 this year. Photo / Brett Phibbs

Auckland Airport has selected two new duty free providers it says will offer "innovative" service to passengers passing through its international terminal.

Paris-based LS Travel Retail Pacific and Ireland's Aer Rianta International will replace JRDuty Free and DFS from July 1.

Airport general manager of retail and commercial Richard Barker said from an initial field of 10 applicants, the company had a shortlist of five.

"The selection of these two operators helps ensure that our passengers will be able to choose from a wide range of products and services that represent the best of New Zealand and the world. There will be many new duty free brands and retail concepts, including a number of world firsts," he said.

Existing duty free retailers came in for flak at the airport company's annual meeting last year for hard sell tactics and Barker said the new companies promised more relaxed and personal service.

The new companies would have the licence for at least seven years.

The changes were announced as Auckland Airport released its interim results which saw total profit after tax up 8.1 per cent to $92.8 million for the six month to December 31 and the company lift guidance for the full year.

LS Travel Retail Pacific, a division of Lagardère Services, operates in more than 30 countries throughout Europe, North America, Asia and the Pacific, with more than 4100 stores across the world.

It has a presence at over 150 airports.

Throughout Asia Pacific LS travel retail operates more than 250 stores, and is in about 16 airports in Australia, New Zealand (Queenstown), New Caledonia, Singapore, Malaysia, China, Hong Kong and India.

The airport said Aer Rianta International invented duty free shopping through the world's first duty free liquor shop in Ireland's Shannon Airport in 1947.

"This pioneering spirit coupled with strength in building strong partnerships saw the company rapidly expand and be amongst the first to bring duty free retailing to the Middle East, Eastern Europe and Russia."

With a managed turnover in excess of US$1 billion ARI employs 3500 people worldwide but had about 18 months ago withdrawn from Russia.

Barker said the appointment of LS Travel and Aer Rianta would result in a significant expansion of the airport's online shopping, including 'click and collect' which provides passengers with the option of buying online and collecting their tax-free and duty free purchases.

"Importantly, we expect the appointment of LS Travel and Aer Rianta will eventually result in even more employment opportunities at the airport."

As a result of the duty free tender, and other changes in specialty stores, earnings before interest, tax and depreciation in the 2016 financial year for the airport were expected to increase by an extra $5 million a year.

Matthieu Mercier, LS Travel Retail Pacific's chief executive office said his company would "leverage our extensive vendor relationships and global experience by offering a wide range of big name brands in perfume and cosmetics, local wine and liquor."

Air Rianta International's chief executive Jack MacGowan said his company would bring to Auckland its global experience of successful airport retail operations and airport partnerships.

JRDuty Free started at Auckland Airport in 2009 and has outlets in Wellington and Christchurch. Founded in Australia it has a big presence there and in Israel and Tahiti. DFS has branches around the world.