KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) is upbeat on its prospect of increasing non-aeronautical revenue contribution to the group by five per cent within five years.
Managing director Datuk Badlisham Ghazali said currently the aeronautical and non-aeronautical segments contribute equally about 50:50 to the group’s revenue.
“We have stated our goal to increase non-aeronautical revenue to potentially 55 per cent of the group’s revenue.
“The target is a journey that goes hand in hand with airport expansion to make it more efficient and increase customer’s service,” he told NSTP Business recently.
MAHB’s non-aeronautical revenue throughout 2017 rose 10.5 per cent to RM531.1 million, driven by stronger sales registered by the concessionaires and retailers.
Its 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 others investment holding.
Badlisham said MAHB will also upgrade its retail commercial business at all airports networks, starting with Langkawi and moving towards at KLIA.
“This is important as the passengers’ preferences have changed – the concept of spending time at the airport retailers.
“Passengers want more experiential shopping and different environment with different brand categories. We want to redo it so that we can provide better customers’ service and beyond to our passengers,” he said.
Badlisham also said MAHB is keen to open up its available slots for better retail and commercial offerings.
“It will take about five years to hit double-digit growth per person spending from where we are today.
“We are going to redo commercial offerings over the next three years. We want to increase our sales per passenger. Currently, it is relatively low compared to our regional peers,” he said.
According to MAHB, passenger spending at all its MAHB airports averaged about RM24 per person for the whole Malaysia airport operations.
Spending per person at KLIA and KLIA 2 are about at RM46.40 and RM30, respectively.
“That is the function of having commercial offerings that have higher and bigger brands (high fashion) at our airports.
“The format (retail offering) needs to be changed so that people will not only feel it’s not about high-end products but also palatable for passengers. It doesn’t have to be low-end products.
“We have to cater for all discerning passengers. But there will be more high end brands and bigger format. For local products, it’s not about low-end but also mid-end local products,” he said.
Badlisham stressed the importance for MAHB to nurture Malaysian products as well to get higher per person spending and attract local players to the airports.
Badlisham said MAHB also intends to maximise existing asset (land) surrounding its airports network for future development such as the KLIA Aeropolis.
“By next year, we will be ready to announce Business Park at KLIA to attract similar investments like the airport in Subang,” he said.
For the Penang International Airport, Badlisham said MAHB plans to not only to add more carpark space, but also look at building a hotel and premium outlet outside the airport.