Airports

Our services to Airports include:
  • Retail/concession planning;
  • Quantity of space determination;
  • Space optimisation;
  • Retail layout and program design;
  • Tenancy planning;
  • Tender process management and design;

 

  • Tender document preparation;
  • Tender evaluation and recommendation;
  • Performance improvement;
  • Concession contract structuring, design and negotiation;
  • Inter-airport retailer price comparisons;
  • Retail performance benchmarking;
Our experience in advising Airports include:
  • Working in multi-disciplinary teams with architects, engineers and designers. The Mercurius Group team members have worked closely in such teams with companies such as Cox Architects, Zaha Hadid, Woodhead, Woods Bagot, Group GSA, Urbis, Hassell Architects, Portland Design, Airbiz and Landrum & Brown;
  • Working with airport commercial teams in master planning, terminal and retail planning, terminal layout and design, tenancy planning and tender preparation.  The Mercurius Group team members have worked on such projects for a wide range of airports including Sydney, Brisbane, Perth, Adelaide, Cairns, Hobart, Canberra, Newcastle, Wellington, Queenstown, Dunedin, Singapore, Hong Kong, London Heathrow, Beijing, Guangzhou, Los Angeles and New Goa (India).

 

Airport Food and Beverage Study (AFABS) – Benchmarking and Analysis (2021)

The Mercurius Group, in partnership with The Moodie Davitt Report, has released the inaugural 2021 edition of the Airport Food & Beverage Study (AFABS). The AFABS 2021 focuses on the Australian and New Zealand airport F&B markets, covering all 27 airports in Australia and New Zealand with annual passenger volumes exceeding 0.5 million. The AFABS 2021 also features The Mercurius Group’s Top 12 F&B Operators League Table. The Top 12 F&B operators are responsible for 75% of the outlets within the region.

 

Key features of the AFABS AU+NZ include:

  • Estimates of the size of the F&B market;
  • Spend-per-pax estimates by airport;
  • Segmentation analysis by outlet type;
  • Segmentation analysis by operator;
  • Segmentation analysis by airport;
  • Ranking of the Top 12 operators;
  • Analysis of the F&B program of 26 airports with more than 0.5m pax;
  • An assessment of the key elements of an airport F&B program from the perspective of both operators and airports.

 

The AFABS also examines the potential for consolidation in the airport F&B industry, concluding that some merger and acquisition activity is likely.

 

To purchase a copy, please fill out the AFABS order form and contact;

Mr Ivo Favotto

Managing Director, The Mercurius Group

ifavotto@themercuriusgroup.com

Tel: +61 423 564 057

 

Comments on the report include;

“The Airport Food & Beverage Study AU+NZ by The Mercurius Group  is a ground breaking report.  It comprehensively profiles both the top F&B operators as well as the F&B programs of all the major airports in Australia and New Zealand.  It is an impressive reference work that will come in handy in assessing new opportunities and in keeping an eye on our competitors – it’s the only report of its kind in our industry and I thoroughly recommend it to all those involved in the airport F&B industry including operators, airports, brands and suppliers.” John Chapman, CEO, Airport Retail Enterprises 

“The team at SSP have found the Airport Food and Beverage Study as compiled by the Mercurius group to be a comprehensive, structured and insightful piece of work on our sector in the region. The report provides great assistance as a tool for benchmarking and the planning of business development opportunities. It would be fantastic to see this report updated on a regular basis. Equally it would provide huge benefit to see such a report prepared for other regions more broadly.”  Matthew Hill, Business Development Director APAC, SSP Group

 

Townsville Airport Terminal Expansion – Retail Planning (2019-2020)

TMG was engaged by Townsville Airport to assist with planning an expansion of retail space in its existing domestic terminal  through the realignment of the airside/landside boundary creating a larger airside retail precinct.

TMG advised on:

  • How to optimise retail space by changing security and amenities locations;
  • How much space could be sustained and retail mix;
  • The layout of the space; and
  • Impact of staging.

 

Western Sydney Airport Advertising Strategy – Strategy, benchmarking and planning (2020)

TMG was engaged by WSACo to prepare an in-terminal advertising strategy for its 10 million passenger capacity terminal to be opened in 2026. TMG’s engagement including developing on overarching strategy for in-terminal advertising, benchmarking revenues achieved from advertising, assessing go-to-market options (e.g. in-house versus concession etc) and identifying advertising opportunities with each precinct of the terminal. TMG strategy also needed to be cognizant of the overall terminal architecture as well as planned art and cultural installations.

 

Western Sydney Airport Hotel Planning – Benchmarking and space planning (2020)

TMG was engaged by WSACo to conduct a hotel space planning study in preparation for a 10 million passenger capacity airport being built to open in 2026. TMG’s engagement including benchmarking airport hotels from across Australia and New Zealand across key parameters including number of rooms per million passengers and typical floor plate. These insights were then applied to WSA’s pax forecast to determine overall potential demand for hotel space.

 

New GOA Airport (India) Retail Planning – Benchmarking of commercial performance (2020)

TMG was engaged by GMR GOA – one of India’s premier airport owners and operators – to benchmarking services to support retail planning for New Goa Airport in India. TMG’s role was to benchmark passenger spend rates, sales per square metre and rental yield for duty free, specialty retail, food & beverage and currency change. In addition, The Mercurius Group also provided inputs into the retail planning process for airports.

 

Newcastle Airport Car Rental Value Optimisation Strategy – Benchmarking, facilities planning & renewal strategy (2019)

TMG was engaged to advise Newcastle Airport on the optimum value enhancing strategy for its car rental concessions. With an upcoming expiry, TMG developed a strategy to optimise the commercial value of the car rental business. Starting with benchmarking returns to identify opportunities, TMG assessed facility demand (ready bays, front-of-house booths, back-of-house and storage) and developed options to provide additional facilities and maximise returns. TMG also worked with the NTL team to optimise the ground transport plan to enhance car rental value.

 

Sale of 50.1% of Hobart Airport – Non-aeronautical revenue due diligence (2019)

TMG was engaged by Unisuper, one of the bidders seeking to acquire 50.1% of Hobart Airport as non-aero revenue adviser, covering specialty retail, F&B, duty free, car parking, car rental, advertising and ground transport. TMG’s role was to identify both value enhancing opportunities and risks from documentation provided in both the Information Memorandum and Digital Data Room during both the non-binding bid and binding bid stages of the transaction. TMG’s advice was incorporated into the bid valuation model and consideration of risk/value.

 

Cairns Airport Price Comparisons – Pricing Analysis (2019)

TMG was engaged by a Cairns Airport to conduct a biannual comparison of prices across their major retail categories  against prices at competing and comparable locations including downtown retailers, other airports in Australia and other airports overseas. The price comparison covered over 100 products across Duty Free, Travel Essentials, and Food and Beverage product categories. Prices were normalised for variant sizes where such differences occurred.  Promotional activity was also taken into account.

 

Car Rental Value Optimisation Strategy – Benchmarking, facilities planning & renewal strategy (2019)

TMG was engaged to project manage Cairns Airport’s Car Rental Enhancement Development. The primary aim of the project was to develop a plan and business case to move car rental operations from T2 into a purpose built car rental centre outside the terminal, increase the amount of ready bays and provide value enhancing options such as premium/covered parking. TMG also worked with the CNS team to optimise the ground transport plan to protect and enhance car rental value.

 

Canberra Airport Food & Beverage + Travel Essentials Tenders – Tender Management (2019)

TMG was engaged by Canberra Airport to manage the tender process for the F&B and TE tenders at Canberra Airport.  Key tasks included:

  • Identifying potential tenders;
  • Overseeing tender document preparation;
  • Conducting roadshows to generate interest;
  • Managing the Q&A process;
  • Managing the tenderer presentation process;
  • Managing the final rental negotiations;
  • Identifying staging options to facilitate the changeover of tenants; and
  • Supporting leasing documentation.

 

Western Sydney Airport Terminal Design Competition – Retail Planning (Duty Free, Specialty and F&B) (2019)

TMG was invited to be part of a consortium led by London based Zaha Hadid and Australia’s Cox Architects to participate in an international competition to design the new terminal at the future Western Sydney Airport, scheduled to open in 2026. TMG’s role was to determine space planning parameters for all the commercial activities in the terminal and participate in the terminal design process. The theme of the bid was to reflect the local history and flora and fauna of the surrounding area will feature landscaped gardens framing a giant public plaza, timber ceiling and vertical gardens.

Key Outcomes:

  • The Zaha/Cox consortium won the design competition (announced October 2019) against a field of 5 short-listed international consortiums, selected from hundreds of bids;
  • The terminal was designed for 3 million passengers with an expansion for 10 million passengers within an overall master plan for an airport to process 80 millions passengers.
  • The Zaha/Cox consortium will now move to detail its initial design.

 

Brisbane Airport Duty Free Concession Planning – Benchmarking, Sales & Rent Estimation (2019)

TMG was engaged to advise Brisbane Airport on the optimum value enhancing strategy for its duty free concession. With a looming expiry, TMG assessed the duty free business at Brisbane Airport to determine potential areas of upside and to determine commercial sustainable levels of rent. TMG also assessed the current state of the duty free market in Australia, analysed potential interested parties and recommended a plan of action to determine the best long term outcome for Brisbane Airport.

 

Perth Airport Luxury/Affordable Luxury Precinct Planning – Benchmarking, Feasibility, Brand & Tenancy Planning (2019)

TMG was engaged to plan the luxury precinct being developed as part of the Perth Airport International Terminal expansion. TMG’s role included assessing the commercial viability of luxury retailing at Perth Airport, taking into consideration pax volumes and mix, luxury brand requirements, benchmarking of successful luxury precincts at other airports and lessons from the domestic market in Perth and across Australia. TMG was then required to input into the overall terminal layout and design to create a precinct that would enable luxury retailing to be commercial viable at Perth Airport.

 

The Mercurius Group Supports Cairns Airport on T2 Reconfiguration Project (2018)

The Mercurius Group was engaged by Cairns Airport to assist on the $55m Terminal 2 (domestic) Reconfiguration Project.  The project will expand the T2 Departures Hall by around 50%, and increase the retail footprint by 100% (a combination of new footprint and relocating non-essential functions such as offices from the Departures Hall) with construction kicking off in Q4 of 2018.  The services provided by TMG included:

 

  • Overall Project Director – TMG played the role of Project Director, working through project definition, business case development, concept design and all the way to 100% detailed design, coordinating CNS’ retail, operational and financial teams as well as external project managers, architects, airport planners, structural engineers, services engineers, quantity surveyors, fire engineers and building certifiers;

 

  • Retail Planning – TMG provided retail planning input into the project including determining how much retail (specialty, F&B and services) was sustainable, the optimal layout for retail within the terminal, taking into account construction constraints and operational requirements and on-going refinement of the retail offer through construction staging;

 

  • Retail Leasing – having recommended a 100% increase in the amount of retail floor space, TMG was engaged to engage with potential tenants.  TMG arranged and managed several leasing roadshows, developed tenancy plans to achieve desired tenant diversity and product category outcomes, constructed multiple options and proposals for prospective tenants and negotiated outcomes to meet and often exceed the business case expectations;

 

  • Tender Management – TMG worked with the CNS commercial team to manage a full F&B tender process for 12 spaces in T2 (up from 7 currently) which received proposals from local, national and international F&B players.  TMG also led the negotiation and closing of the F&B leasing deals; and

 

  • Local sourcing – TMG conducted a comprehensive audit of the local produce supply capability of the Far North Queensland (FNQ) region to develop a database of produce supplies – eggs, bacon, milk, cheese, vegies, bread, other bakery, chocolates, meat as well as beer, wine and spirits – to educate potential F&B tenderers on the produce supply capability of the FNQ region, thereby helping them produce more environmentally sustainable and financially viable tenders.

 

Commenting on the project, Norris Carter, CEO of Cairns Airport said:

“The Mercurius Group played a critical role in shaping the design of the terminal and the retail mix to suit the needs of our passengers and retail operators, so that Cairns Airport’s customers will arrive excited and depart delighted.”

Commenting on the project, Ivo Favotto, Managing Director of TMG said:

“The Cairns T2 Reconfiguration Project has been one of the best projects of this type that The Mercurius Group has worked on.  The team at Cairns Airport are fantastic. They have both a bold strategic and commercial vision as well as the willingness and talent to execute.  We set out to achieve a 50% uplift in the airport’s retail income from this terminal and are on track to achieve this challenging objective.”

 

London Heathrow Airport – Performance Benchmarking (2018)

The Mercurius Group teamed up with UK based retail and commercial strategy consultants, Pragma, to conduct performance benchmarking and develop retail strategy for London Heathrow Airport.  Mercurius’ role was to provide benchmarks, insights and trends from key airports in the Asia-Pacific region as input into the overall project.

 

Gold Coast Airport – Retail Benchmarking & Planning (2018)

The Mercurius Group was engaged by Gold Coast Airport to conduct retail benchmarking and planning for both its international terminal expansion and a proposed reconfiguration and expansion of the domestic terminal area.  Mercurius worked with the Gold Coast Airport team, architects Hassel, retail designers Geyer and cost planners to develop retail expansion teams that would generate a positive financial return to the Airport.

 

Canberra Airport – Retail Benchmarking & Planning (2018)

The Mercurius Group was engaged by Canberra Airport to review the performance of the existing commercial program (retail, F&B and duty free) and advise on options to expend the retail program and improve its performance.   Mercurius worked with the airport’s planning team and architects Guida Moseley Brown to develop terminal reconfiguration options and to conduct feasibility and cost-benefit analysis.

 

Canberra Airport – Retail Tender & Leasing Support (2018)

The Mercurius Group was engaged by Canberra Airport to prepare tender documents, conduct a potential tenant outreach program and negotiate leases for the reconfiguration and expansion of the commercial program at Canberra Airport.

 

Perth Airport – Retail Tender Support (2018)

TMG engaged to support Perth Airport in managing a $500m tender for duty free and retail concessions. Our role included pre-tender market assessments, assessments of contract value, assessments of proposed tenderers and financial evaluation of bids.

 

Sale of Sunshine Coast Airport – Non-aeronautical Revenue Due Diligence (2018)

TMG was engaged by Infrastructure Capital, one of the bidders seeking to Sunshine Coast Airport from the local Council, to prepare the overall business plan for the bid. Preparing the business plan required TMG to take input from various work streams (including aeronautical, non-aeronautical, operations and capital planning) to develop a consistent story-line in support of the ICG bid. The business plan covered a range of scenarios including airline traffic forecasts and associated terminal expansions and redevelopments.

 

Airport Commercial Masterclass (Morgan Stanley) – Advisory (2018)

TMG was engaged by Morgan Stanley to provide an airport commercial master class to Morgan Stanley’s investment clients. The master class covered all areas of airport commercial revenue including duty free, specialty retail, food & beverage, car parking, car rental, ground transport, hotels and advertising. TMG provided insights into key performance benchmarks, business trends, industry consolidation, disruption and opportunities for airports across Australia and New Zealand. The master class concluded with a Q&A session.

 

Airport Commercial Master Classes (Forsyth Barr) – Advisory (2017-present)

TMG has been engaged by Forsyth Barr over the past 4 years to provide an airport commercial master classes to their investment clients across Australia and New Zealand

The master classes covered all areas of airport commercial revenue including duty free, specialty retail, food & beverage, car parking, car rental, ground transport, hotels and advertising. TMG provides insights into key performance benchmarks, business trends, industry consolidation, disruption and opportunities for airports across Australia and New Zealand.

  • Educating current and potential investors on what to look for in assessing airport investments;
  • Helping investors to understand and assess both key risks and opportunities;
  • Identifying and assessing key industry trends (local and global)
  • Providing performance metrics and benchmarks.

 

Whitsunday Coast Airport -– Retail Benchmarking & Planning (2017)

TMG engaged to review PPP’s existing retail and F&B program, benchmark performance against similarly sized airports and devise a strategy to enable more retail space to be sustained and greater rentals to be achieved.

 

Ballina Byron Bay Airport Engages The Mercurius Group To Conduct Retail Observation Study (2017) 

January, 2017.  Ballina Byron Bay Airport has engaged The Mercurius Group to conduct an Observation Study in support of planning for a major terminal expansion.  The Observation Study documented the total number of people entering the terminal building, their flow and dwell patterns within the terminal and their retail spend.  The Observation Study recommended a material increase in the amount of retail floor space profitably sustainable at Ballina Byron and provided a vision for how retail returns could be materially increased.  The Observation Study provided input into the terminal expansion currently being designed by STEA architects who specialise in regional airport terminals.

 

The Mercurius Group Conducts Benchmarking Study & Review For Newcastle Airport (2016)

June, 2016.  Newcastle Airport (Australia) has engaged The Mercurius Group to conduct a benchmarking study and review of its retail program.  The project involved benchmarking the sales and rental performance of all retail and F&B outlets at Newcastle Airport as well as assessing passenger volume and mix trends to determine the optimal amount of sustainable retail floor space.  The review identified a number of operational and space improvements to the Newcastle Airport retail program.