Lagardère Travel Retail and Lima Airport Partners (LAP), a Fraport company, say they are pioneering a new era for travel retail business models after signing a long-term concession contract based on profit-sharing for the exclusive operation of duty-free stores at Jorge Chávez International Airport in Peru.
The two companies say this is the first large-scale implementation of a business model that has been widely discussed in the industry to better balance risks and benefits between the airport and retail operator. Their goal is to unleash growth potential, even more relevant in the context of the Covid-19 pandemic and the resulting drop in global air traffic.
Effective January 2022, the 13-year concession will include the introduction of the duty-free brand Aelia at the airport´s duty free stores, which comprise a total of 3,000m2 of commercial space. The innovative profit-sharing agreement sets new standards that both partners hope to capitalize on during an environment of uncertainty in the post-Covid consolidation period. This retail model, which has come into sharp focus during the crisis, has been discussed for several years as a necessary evolution to maximize sales potential and to introduce greater balance and new opportunities in the way risks and benefits are shared between parties.
Commenting on this announcement, Dag Rasmussen, chairman and CEO, Lagardère Travel Retail, said, “We are thrilled to have found in LAP a like-minded partner who has demonstrated the most innovative and pioneering way of thinking, from selecting an operator via an innovative partnership selection process up to the contract terms. As we continue to face a great deal of uncertainty and are relatively new to the South American region, this profit-sharing agreement is a great vote of confidence from LAP.
“I am personally grateful for their trust and support in turning theory into action and opening up new perspectives for business models in our industry. We are also confident this is a stepping stone for our partnership with Lima Airport and its majority shareholder Fraport, so that we can all maximize our global expertise and reach to replicate this success elsewhere.”
Along with the duty-free shops at Lima Airport’s existing passenger terminal, Lagardère Travel Retail will work with LAP to define a new retail experience for LAP’s future terminal, due to open in 2025. The launch of operations in Peru marks a significant milestone for the company’s plans to expand the group’s footprint in South America, just a few months after being awarded a concession to build and operate food service outlets at Arturo-Merino-Benítez Airport in Santiago de Chile.